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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-K**

 

**(Mark One)**

 

**x****      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For the fiscal year ended December 31, 2010**

 

**o****  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For the transition period from                        to                       **

 

**Commission file number**

 

**KABE EXPLORATION INC.**

(Name registrant as specified in its charter)

 

| **NEVADA**                                                     | ** ** | **39-2052145**                       |
|----------------------------------------------------------------|------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) |       | (I.R.S. Employer Identification No.) |

 

| **5050 Avenida Encinas, Suite 270, Carlsbad, CA** | ** ** | **92008**  |
|--------------------------------------------------------|------------|------------|
| (Address of principal executive offices)               |       | (Zip Code) |

 

Registrant’s telephone number, including area code: **(760) 931-1048**

 

Securities registered under Section 12(b) of the Exchange Act:

 

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

 

Securities registered under Section 12(g) of the Exchange Act:

 

**Common Stock, par value $.001**

(Title of class)

 

Indicate by check mark is the issuer is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act Yes o No x

 

Indicate by check if the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes o No x

 

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

 

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

 

Indicate by check mark if no disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

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

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No o

 

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant, computed by reference to price at which the common equity was sold, or the average bid and asked price of such common stock as of June 30, 2010, was $11,594,175.

 

State issuer’s revenues for its most recent fiscal year: $0

 

As of March 29, 2011, the issuer had 38,647,250 outstanding shares of Common Stock.

 

**DOCUMENTS INCORPORATED BY REFERENCE: NONE**

 

 

 

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**TABLE OF CONTENTS**

 
| **Part I**   |                                                                                                |   |
|-------------------|-----------------------------------------------------------------------------------------------------|--------|
| ** **        |                                                                                                |   |
| Item 1.           | Description of Business.                                                                            | 4      |
|              |                                                                                                |   |
| Item 2.           | Description of Property.                                                                            | 5      |
|              |                                                                                                |   |
| Item 3.           | Legal Proceedings.                                                                                  | 5      |
|              |                                                                                                |   |
| Item 4.           | Reserved.                                                                                           | 5      |
|              |                                                                                                |   |
| **Part II**  |                                                                                                | 5      |
| ** **        |                                                                                                |   |
| Item 5.           | Market for Common Equity,   Related Stockholder Matters and Issuer Purchases of Equity Securities.  | 5      |
|              |                                                                                                |   |
| Item 7.           | Management’s Discussion and   Analysis of Financial Condition and Results of Operations.       | 6      |
|              |                                                                                                |   |
| Item 8.           | Financial Statements.                                                                               | 9      |
|              |                                                                                                |   |
| Item 9.           | Changes in and   Disagreements With Accountants on Accounting and Financial Disclosure.             | 20     |
|              |                                                                                                |   |
| Item 9A.          | Controls and   Procedures.                                                                          | 20     |
|              |                                                                                                |   |
| Item   9B.        | Other   Information.                                                                                |   |
|              |                                                                                                |   |
| **Part III** |                                                                                                |   |
| ** **        |                                                                                                |   |
| Item 10.          | Directors,   Executive Officers and Corporate Governance.                                           | 21     |
|              |                                                                                                |   |
| Item 11.          | Executive   Compensation.                                                                           | 22     |
|              |                                                                                                |   |
| Item 12.          | Security   Ownership of Certain Beneficial Owners and Management and Related Stockholder   Matters. | 23     |
|              |                                                                                                |   |
| Item 13.          | Certain   Relationships and Related Transactions, and Director Independence                         | 23     |
|              |                                                                                                |   |
| Item 14.          | Principal   Accountant Fees and Services.                                                           | 24     |
|              |                                                                                                |   |
| Item 15.          | Exhibits and Financial Statement   Schedules.                                                       | 24     |
|              |                                                                                                |   |
|              | Signatures                                                                                          | 26     |

 

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*Except as otherwise required by the context, all references in this prospectus to “we”, “us”, “our”, or “Company” refer to the operations of Kabe Exploration Inc., a Nevada corporation.*

 

**Forward-Looking Statements**

 

*The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements. Some of the statements contained in this annual report of the Company discuss future expectations, contain projections of our operations or financial condition or state other forward-looking information. Some statements contained in this annual report on Form 10-K that are not historical facts (including without limitation statements to the effect that we “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” or other similar expressions) and are forward-looking statements. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those anticipated by us. All comments concerning our expectations for future revenue and operating results are based on our forecasts of our plan of operation and do not include the potential impact of any future acquisitions or operations. These forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements. All share amounts in this Form 10-K have been adjusted to account for a 10:1 forward split of the authorized and issued common stock effected on December 12, 2008.*

 

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**PART I**

 

**Item 1.    Description of Business.**

 

**General**

 

We are a “shell company” defined in Rule 405 under the Securities Act of 1933 and Rule 12b-2 under the Securities Exchange Act of 1934, since we have only conducted nominal operations and have only nominal assets.

 

During 2007, we were an exploration stage company engaged in the acquisition and exploration of mineral properties. We entered into a lease agreement with George J. Eliopulos effective March 31, 2006, granting us the exclusive right to explore, develop, and mine the property for gold, silver, copper and other valuable minerals. The property consisted of one unpatented mining claim located in section 12, Township 16 North, Range 20 East, Mt. Diablo Baseline & Meridian, Storey County, Nevada, USA, owned by Mr. Eliopulos.

 

On December 18, 2007, Erik Ulsteen entered into an agreement with Antony Claydon, our former President and a director and Rory Moss, a director, to purchase 1,500,000 and 250,000 shares of common stock, respectively, for an aggregate purchase price of $50,000. The transaction closed on February 14, 2008 at which time, Mr. Claydon resigned as President, Chief Financial Officer and Secretary and Mr. Ulsteen was appointed President, Chief Financial Officer, Secretary and director. On January 28, 2008, we terminated our lease agreement with Mr. Eliopulos.

 

We have redirected our focus towards identifying and pursuing options regarding the development of a new business plan and direction. We are exploring various business opportunities that have the potential to generate positive revenue, profits and cash flow in order to financially accommodate the costs of being a publicly held company. We will not restrict our search to any specific business, industry, or geographical location and it may participate in a business venture of virtually any kind or nature. Management anticipates that it will be able to participate in only one potential business venture because we have nominal assets and limited financial resources.

 

We were incorporated as a Nevada corporation on December 15, 2005. Our principal executive office is located at 5050 Avenida Encinas, Suite 270, Carlsbad, California 92008.

 

The following factors raise substantial doubt regarding the ability of our business to continue as a going concern: (i) the losses we have incurred since our inception; (ii) our failure to generate revenues since our inception; and (iii) our dependence on the sale of our equity securities and on the receipt of capital from outside sources to continue our operations. Our auditors have issued a going concern opinion regarding our business. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue in business. As such we may have to cease operations and you could lose your investment.

 

**Patent and Trademarks**

 

We currently do not own any patents, trademarks or licenses of any kind.

 

**Government Regulations**

 

There are no government approvals necessary to conduct our current business.

 

**Employees**

 

As of March 29, 2011 we have no employees other than Mr. Ulsteen.

 

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**Item 2.    Description of Property.**

 

We entered into a lease agreement with George J. Eliopulos effective March 31, 2006, granting us the exclusive right to explore, develop, and mine the property for gold, silver, copper and other valuable minerals. The property consisted of one unpatented mining claim located in section 12, Township 16 North, Range 20 East, Mt. Diablo Baseline & Meridian, Storey County, Nevada, USA, owned by Mr. Eliopulos. In September 2006 Mr. Eliopulos added five additional claims to our property and mineral lease. On January 28, 2008, we terminated our lease agreement with Mr. Eliopulos.

 

**Item 3.    Legal Proceedings.**

 

There are no significant legal proceedings against us with respect to matters arising in the ordinary course of business.

 

**Item 4.    Reserved.**

 

**PART II**

 

**Item 5.    Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.**

 

**Market Information**

 

Since June 4, 2007, our common stock has been quoted on the Over-the-Counter Bulletin Board under the symbol “KABX,” however it has only been traded since February 13, 2009. The following table shows the reported high and low closing prices per share for our common stock as reported on the Over-the-Counter Bulletin Board since February 13, 2009.

 
| ** **                                  | ** ** | **High** | ** ** | **Low** | ** ** |
|---------------------------------------------|------------|----------|------------|---------|------------|
| Year ended December 31, 2009           |       |     |       |    |       |
| First quarter                               |       | $        | 0.51       |    | $          | 0.275 |   |
| Second quarter                              |       | $        | 0.51       |    | $          | 0.055 |   |
| Third quarter                               |       | $        | 0.40       |    | $          | 0.07 |   |
| Fourth quarter                              |       | $        | 0.13       |    | $          | 0.07 |   |
|                                        |       |     |       |    |       |
| Year ending December 31, 2010          |       |     |       |    |       |
| First quarter                               |       | $        | 0.25       |    | $          | 0.07 |   |
| Second quarter                              |       | $        | 0.35       |    | $          | 0.125 |   |
| Third quarter                               |       | $        | 0.44       |    | $          | 0.08 |   |
| Fourth quarter                              |       | $        | 0.08       |    | $          | 0.03 |   |
|                                        |       |     |       |    |       |   |   |
| Year ending December 31, 2011          |       |     |       |    |       |
| First quarter (through March 29, 2011) |       | $        | 0.04       |    | $          | 0.04 |   |

 

**Holders**

 

As of March 29, 2011 in accordance with our transfer agent records, we had 29 stockholders of record.

 

**Dividends**

 

There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. We have not declared any dividends and we do not plan to declare any dividends in the foreseeable future..

 

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**Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations.**

 

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.

 

**Overview**

 

We are a “shell company” defined in Rule 405 under the Securities Act of 1933 and Rule 12b-2 under the Securities Exchange Act of 1934, since we have only conducted nominal operations and have only nominal assets.

 

During 2007, we were an exploration stage company engaged in the acquisition and exploration of mineral properties. We entered into a lease agreement with George J. Eliopulos effective March 31, 2006, granting us the exclusive right to explore, develop, and mine the property for gold, silver, copper and other valuable minerals. The property consisted of one unpatented mining claim located in section 12, Township 16 North, Range 20 East, Mt. Diablo Baseline & Meridian, Storey County, Nevada, USA, owned by Mr. Eliopulos.

 

On December 18, 2007, Erik Ulsteen entered into an agreement with Antony Claydon, our former President and a director and Rory Moss, a director, to purchase 1,500,000 and 250,000 shares of common stock, respectively, for an aggregate purchase price of $50,000. The transaction closed on February 14, 2008 at which time, Mr. Claydon resigned as President, Chief Financial Officer and Secretary and Mr. Ulsteen was appointed President, Chief Financial Officer, Secretary and director. On January 28, 2008, we terminated our lease agreement with Mr. Eliopulos.

 

The following factors raise substantial doubt regarding the ability of our business to continue as a going concern: (i) the losses we have incurred since our inception; (ii) our failure to generate revenues since our inception; and (iii) our dependence on the sale of our equity securities and on the receipt of capital from outside sources to continue our operations. Our auditors have issued a going concern opinion regarding our business. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue in business. As such we may have to cease operations and you could lose your investment.

 

**Plan of Operation**

 

We have redirected our focus towards identifying and pursuing options regarding the development of a new business plan and direction. We are exploring various business opportunities that have the potential to generate positive revenue, profits and cash flow in order to financially accommodate the costs of being a publicly held company.

 

We will not restrict our search for any specific kind of businesses, and we may acquire a business which is in its preliminary or development stage, which is already in operation, or in essentially any stage of its business life. It is impossible to predict the status of any business in which we may become engaged, in that such business may need to seek additional capital, may desire to have its shares publicly traded, or may seek other perceived advantages which we may offer.

 

In implementing a structure for a particular business acquisition, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity.

 

It is anticipated that any securities issued in any such business combination would be issued in reliance upon exemption from registration under applicable federal and state securities laws. In some circumstances, however, as a negotiated element of its transaction, we may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter. If such registration occurs, it will be undertaken by the surviving entity after we have entered into an agreement for a business combination or has consummated a business

 

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combination. The issuance of additional securities and their potential sale into any trading market which may develop in our securities may depress the market value of our securities in the future if such a market develops, of which there is no assurance.

 

We will participate in a business combination only after the negotiation and execution of appropriate agreements. Negotiations with a target company will likely focus on the percentage of our company which the target company shareholders would acquire in exchange for their shareholdings. Although the terms of such agreements cannot be predicted, generally such agreements will require certain representations and warranties of the parties thereto, will specify certain events of default, will detail the terms of closing and the conditions which must be satisfied by the parties prior to and after such closing and will include miscellaneous other terms. Any merger or acquisition effected by us can be expected to have a significant dilutive effect on the percentage of shares held by our shareholders at such time.

 

We expect that we will require additional funding in connection with our efforts towards identifying and pursuing options regarding the development of a new business plan and direction. We anticipate that such funding will be in the form of equity financing from the sale of our common stock or loans from our principal stockholder. However we cannot provide investors with any assurance that we will be able to obtain sufficient funding to fund our operations or any work related to the development of a new business plan. We do not have any arrangements in place for any future financing.

 

On November 21, 2008, our board approved a forward split of our authorized common stock on a 10:1 basis whereby our authorized common stock increased to 750,000,000 shares from 75,000,000 shares. The board also approved a forward split of our issued and outstanding common stock on a 10:1 basis in the form of a stock dividend which was payable on December 12, 2008.

 

**Summary of Significant Accounting Policies**

 

Basis of Presentation

 

Our financial statements have been prepared using the accrual basis of accounting in accordance with generally accepted accounting principles in the United States. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. Significant estimates made by management are, among others, realizability of long-lived assets, deferred taxes and stock option valuation.

 

The financial statements have, in management’s opinion, been properly prepared within the reasonable limits of materiality and within the framework of the significant accounting.

 

Income Taxes

 

We utilize SFAS No. 109, “Accounting for Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. We

 

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generated a deferred tax credit through net operating loss carryforward. However, a valuation allowance of 100% has been established, as the realization of the deferred tax credits is not reasonably certain, based on going concern considerations outlined as follows.

 

Going Concern

 

Our financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. We have not yet established an ongoing source of revenues sufficient to cover our operating costs and to allow us to continue as a going concern. Our ability to continue as a going concern is dependent on us obtaining adequate capital to fund operating losses until we become profitable. If we are unable to obtain adequate capital, we could be forced to cease operations.

 

Our ability to continue as a going concern is dependent upon our ability to successfully accomplish our plan to develop a new business plan, or merger candidate in order to eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classifications or liabilities or other adjustments that might be necessary should we be unable to continue as a going concern.

 

Development-Stage Company

 

We are considered a development-stage company, with limited operating revenues during the periods presented, as defined by Statement of Financial Accounting Standards (“SFAS”) No. 7. SFAS. No. 7 requires companies to report their operations, shareholders deficit and cash flows since inception through the date that revenues are generated from management’s intended operations, among other things. Management has defined inception as January 1, 2006. Since inception, we have incurred an operating loss of $281,707. Our working capital has been generated through sales of common stock. Management has provided financial data since January 1, 2006, “Inception” in the financial statements, as a means to provide readers of our financial information to make informed investment decisions.

 

Basic and Diluted Net Loss Per Share

 

Net loss per share is calculated in accordance with SFAS 128, Earnings Per Share for the period presented. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilative convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby we used to purchase common stock at the average market price during the period.

 

We had no potentially dilutive securities outstanding as of December 31, 2010.

 

**Off-Balance Sheet Arrangements**

 

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our stockholders.

 

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**Item 8.    Financial Statements.**

 

**KABE EXPLORATION INC.**

**(A DEVELOPMENT STAGE COMPANY)**

 

**TABEL OF CONTENTS**

 
| PAGE   | 10     | REPORT   OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                                                                                            |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                 |
| PAGE   | 11     | BALANCE   SHEET AS OF DECEMBER 31, 2010 AND 2009                                                                                                     |
|   |   |                                                                                                                                                 |
| PAGE   | 12     | STATEMENT   OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 AND FOR THE   PERIOD FROM JANUARY 1, 2006 (INCEPTION) TO DECEMBER 31, 2010. |
|   |   |                                                                                                                                                 |
| PAGE   | 13     | STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY (DEFICIT)   FOR THE PERIOD FROM JANUARY 1, 2006 (INCEPTION) TO DECEMBER 31, 2010.                  |
|   |   |                                                                                                                                                 |
| PAGE   | 14     | STATEMENT   OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009 AND FOR THE   PERIOD JANUARY 1, 2006 (INCEPTION) TO DECEMBER 31, 2010.      |
|   |   |                                                                                                                                                 |
| PAGES  | 15-20  | NOTES TO FINANCIAL STATEMENTS.                                                                                                                       |

 

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

 

To: The Board of Directors and Shareholders 

Kabe Exploration, Inc.

Carlsbad, California

 

I have audited the accompanying balance sheet of Kabe Exploration, Inc. as of December 31, 2010 and 2009 and the related statements of operations and cash flows for the year then ended, and for the period from inception, (January 1, 2006), to December 31, 2010. These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on these financial statements based on my audit.

 

I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.

 

In my opinion the financial statements referred to above present fairly, in all material respects, the financial position of Kabe Exploration, Inc. as of December 31, 2010 and 2009 and the results of its operations and its cash flows for the year then ended, and for the period from inception, (January 1, 2006) to December 31, 2010 in conformity with United States generally accepted accounting principles.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has not yet commenced operations and has no revenue. This raises substantive doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

The Company has determined that it is not required to have, nor was I engaged to perform, an audit of the effectiveness of its documented internal controls over financial reporting.

 
| /s/                           |   |
|-------------------------------|--------|
|                          |   |
| John   Kinross-Kennedy        |   |
| Certified   Public Accountant |   |
| Irvine,   California          |   |
|                          |   |
| March 7,   2011          |   |

 

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** **

**KABE EXPLORATION, INC.**

(A Development Stage Company)

**Balance Sheet**

as at December 31,

 
| ** **                                                                                      | ** ** | **2010** | ** ** | **2009** | ** ** |
|-------------------------------------------------------------------------------------------------|------------|----------|------------|----------|------------|
|                                                                                            |       |     |       |     |       |
| ASSETS                                                                                          |       |     |       |     |       |
| Current Assets                                                                                  |       |     |       |     |       |
| Cash                                                                                            |       | $        | 126        |     | $          | 28 |   |
|                                                                                            |       |     |       |     |       |
| Total Assets                                                                                    |       | $        | 126        |     | $          | 28 |   |
|                                                                                            |       |     |       |     |       |
| LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                      |       |     |       |     |       |
| Current Liabilities                                                                             |       |     |       |     |       |
| Accounts Payable                                                                                |       | $        | 16,509     |     | $          | 16,509 |   |
| Chapman Industries Loan                                                                         |       | 6,776    |       | 6,066    |       |
| Loan Payable - EPS                                                                              |       | 17,323   |       | 8,487    |       |
|                                                                                            |       |     |       |     |       |
| Total Liabilities                                                                               |       | 40,608   |       | 31,062   |       |
|                                                                                            |       |     |       |     |       |
| Stockholders’ Equity (Deficit)                                                             |       |     |       |     |       |
| Common Stock, $0.001 par value; authorized   75,000,000 shares;  issued and   outstanding: |       |     |       |     |       |
| 38,647,250 as at December 31, 2010                                                         |       |     |       |     |       |
| 38,647,250 shares as at December 31, 2009                                                  |       | 38,647   |       | 38,647   |       |
| Additional Paid-In Capital                                                                      |       | 202,578  |       | 202,578  |       |
| Deficit accumulated during the development stage                                                |       | (281,707 | )          | (272,259 | )          |
|                                                                                            |       |     |       |     |       |
| Total Shareholders’ Equity (Deficit)                                                       |       | (40,482  | )          | (31,034  | )          |
|                                                                                            |       |     |       |     |       |
| Total Liabilities and Shareholders’ Equity   (Deficit)                                     |       | $        | 126        |     | $          | 28 |   |

 

The accompanying notes are an integral part of these financial statements

 

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**KABE EXPLORATION, INC.**

(A Development Stage Company)

**Statement of Operations**

For the year ended and three months ended December 31, 2010 and 2009

 
| ** **                                                | ** ** | ** **                       | ** ** | ** **            | ** ** | ** **                           | ** ** | ** ** | ** ** | **For the Period** | ** ** |
|-----------------------------------------------------------|------------|----------------------------------|------------|-----------------------|------------|--------------------------------------|------------|------------|------------|------------------------------|------------|
| ** **                                                | ** ** | **For the**                 | ** ** | **For the**      | ** ** | **of Inception**                | ** ** |
| ** **                                                | ** ** | **Three Months Ended** | ** ** | **Year Ended**   | ** ** | **from Jan. 1, 2006** | ** ** |
| ** **                                                | ** ** | **December 31,**            | ** ** | **December 31,** | ** ** | **through Dec. 31,**       | ** ** |
| ** **                                                | ** ** | **2010**                         | ** ** | **2009**              | ** ** | **2010**                             | ** ** | **2009**   | ** ** | **2010**                     | ** ** |
|                                                      |       |                             |       |                  |       |                                 |       |       |       |                         |       |
| Revenue                                                   |       | $                                | —     |                  | $          | —                               |       | $          | —     |                         | $          | — |   | $ | — |   |
|                                                      |       |                             |       |                  |       |                                 |       |       |       |                         |       |
| Cost of Sales                                             |       | —                           |       | —                |       | —                               |       | —     |       | —                       |       |
|                                                      |       |                             |       |                  |       |                                 |       |       |       |                         |       |
| Operating Income                                          |       | —                           |       | —                |       | —                               |       | —     |       | —                       |       |
|                                                      |       |                             |       |                  |       |                                 |       |       |       |                         |       |
| General and Administrative Expenses:                      |       |                             |       |                  |       |                                 |       |       |       |                         |       |
| Mineral Lease Fees                                        |       | —                           |       | —                |       | —                               |       | —     |       | 6,713                        |       |
| Professional Fees                                         |       | 3,765                            |       | 102,150               |       | 7,811                                |       | 106,600    |       | 186,234                      |       |
| Consultant Fees                                           |       | —                           |       | 5,000                 |       | —                               |       | 50,000     |       | 50,000                       |       |
| Other Administrative Expenses                             |       | 1,511                            |       | 25,618                |       | 1,637                                |       | 26,742     |       | 33,769                       |       |
| Loss on abandonment of Mineral Leases                     |       | —                           |       | —                |       | —                               |       | —     |       | 5,000                        |       |
| Total General and Adminstrative Expenses                  |       | 5,276                            |       | 135,767               |       | 9,448                                |       | 183,342    |       | 281,716                      |       |
|                                                      |       |                             |       |                  |       |                                 |       |       |       |                         |       |
| Other Inocme                                              |       |                             |       |                  |       |                                 |       |       |       |                         |       |
| Interest Income                                           |       | —                           |       | —                |       | —                               |       | —     |       | 22                           |       |
| Interest Expense                                          |       | —                           |       | —                |       | —                               |       | —     |       | (13                          | )          |
|                                                      |       | —                           |       | —                |       | —                               |       | —     |       | 9                            |       |
|                                                      |       |                             |       |                  |       |                                 |       |       |       |                         |       |
| Net Income (Loss)                                         |       | $                                | (5,276     | )                     | $          | (135,767                             | )          | $          | (9,448     | )                            | $          | (183,342 | ) | $ | (281,707 | ) |
|                                                      |       |                             |       |                  |       |                                 |       |       |       |                         |       |
| Income/(Loss) Per Common Share:                           |       |                             |       |                  |       |                                 |       |       |       |                         |       |
| Basic and Diluted                                         |       | $                                | (0.00      | )                     | $          | (0.00                                | )          | $          | (0.00      | )                            | $          | (0.00 | ) |   |   |
|                                                      |       |                             |       |                  |       |                                 |       |       |       |                         |       |
| Weighted Average Shares Outstanding, Basic and   Diluted: |       | 38,647,250                       |       | 38,647,250            |       | 38,647,250                           |       | 38,147,136 |       |                         |       |

 

The accompanying notes are an integral part of these financial statements

 

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**KABE EXPLORATION, INC.**

(A Development Stage Company)

**Statement of Shareholders’ Equity**

For the period from inception, January 1, 2006, to December 31, 2010

 
| ** **                                                                | ** ** | ** **            | ** ** | ** **     | ** ** | ** **          | ** ** | **Deficit**      | ** ** | ** **    | ** ** |
|---------------------------------------------------------------------------|------------|-----------------------|------------|----------------|------------|---------------------|------------|------------------|------------|---------------|------------|
| ** **                                                                | ** ** | ** **            | ** ** | ** **     | ** ** | ** **          | ** ** | **Accumulated**  | ** ** | **Total**     | ** ** |
| ** **                                                                | ** ** | **Common Stock** | ** ** | **Additional** | ** ** | **during the** | ** ** | **Shareholders** | ** ** |
| ** **                                                                | ** ** | **Number of**    | ** ** | ** **     | ** ** | **Paid-In**         | ** ** | **Development**  | ** ** | **Equity**    | ** ** |
| ** **                                                                | ** ** | **Shares**            | ** ** | **Amount**     | ** ** | **Capital**         | ** ** | **Stage**        | ** ** | **(Deficit)** | ** ** |
|                                                                      |       |                  |       |           |       |                |       |             |       |          |       |
| Inception, January 1, 2006                                           |       | —                |       | $              | —     |                | $          | —           |       | $             | —     |   | $ | — |   |
| Common stock issued for cash, Jan.16, 2006                                |       | 1,500,000             |       | 1,500          |       | 13500               |       |             |       | 15,000        |       |
| Common stock issued for cash,Aug.23, 2006                                 |       | 250,000               |       | 250            |       | 2250                |       |             |       | 2,500         |       |
| Common stock issued for cash,Sep. 21, 2006                           |       | 575,000               |       | 575            |       | 10925               |       |             |       | 11,500        |       |
| Common stock issued for cash,Oct. 31, 2006                           |       | 800,000               |       | 800            |       | 15200               |       |             |       | 16,000        |       |
| Common stock issued for cash,Nov.30, 2006                                 |       | 262,500               |       | 263            |       | 4987                |       |             |       | 5,250         |       |
| Net loss for the year                                                     |       |                  |       |           |       |                |       | (226             | )          | (226          | )          |
| Balances, December 31, 2006                                          |       | 3,387,500             |       | $              | 3,388      |                | $          | 46,862           |       | $             | (226       | ) | $ | 50,024 |   |
| Net loss for the year                                                     |       |                  |       |           |       |                |       | (37,753          | )          | (37,753       | )          |
| Balances, December 31, 2007                                          |       | 3,387,500             |       | $              | 3,388      |                | $          | 46,862           |       | $             | (37,979    | ) | $ | 12,271 |   |
| Common stock issued for cash, Apr. 15, 2008 at   $0.04 per share     |       | 300,000               |       | 300            |       | 11,700              |       |             |       | 12,000        |       |
| Net loss for the year                                                     |       |                  |       |           |       |                |       | (50,938          | )          | (50,938       | )          |
| Balances, December 31, 2008                                          |       | 3,687,500             |       | $              | 3,688      |                | $          | 58,562           |       | $             | (88,917    | ) | $ | (26,667 | ) |
|                                                                      |       |                  |       |           |       |                |       |             |       |          |       |
| Balances restated for 10-for-1 forward stock split,   April 13, 2009 |       | 36,875,000            |       | $              | 36,875     |                | $          | 25,375           |       | $             | (88,917    | ) | $ | (26,667 | ) |
| Additional Paid-in Capital January 2009                              |       |                  |       |           |       | 1,750               |       |             |       | 1,750         |       |
| Common stock issued for services Apr. 13, 2009,   @ $0.10 per share  |       | 450,000               |       | 450            |       | 44,550              |       |             |       | 45,000        |       |
| Common stock issued for services Apr. 13, 2009,   @ $0.10 per share  |       | 256,000               |       | 256            |       | 25,344              |       |             |       | 25,600        |       |
| Common stock issued for services Apr. 13, 2009,   @ $0.10 per share  |       | 50,000                |       | 50             |       | 4,950               |       |             |       | 5,000         |       |
| Common stock issued for services Apr. 13, 2009,   @ $0.10 per share  |       | 1,016,250             |       | 1,016          |       | 100,609             |       |             |       | 101,625       |       |
| Net loss for the year                                                     |       |                  |       |           |       |                |       | (183,342         | )          | (183,342      | )          |
| Balances, December 31, 2009                                          |       | 38,647,250            |       | $              | 38,647     |                | $          | 202,578          |       | $             | (272,259   | ) | $ | (31,034 | ) |
|                                                                      |       |                  |       |           |       |                |       |             |       |          |       |
| Net loss for the year                                                     |       |                  |       |           |       |                |       | (9,448           | )          | (9,448        | )          |
| Balance, December 31. 2010                                           |       | 38,647,250            |       | $              | 38,647     |                | $          | 202,578          |       | $             | (281,707   | ) | $ | (40,482 | ) |

 

The accompanying notes are an integral part of these financial statements

 

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**KABE EXPLORATION, INC.**

(A Development Stage Company)

**Statement of Cash Flows**

For they year ended December 31, 

 
| ** **                                                                    | ** ** | ** ** | ** ** | ** ** | ** ** | **For the Period**         | ** ** |
|-------------------------------------------------------------------------------|------------|------------|------------|------------|------------|--------------------------------------|------------|
| ** **                                                                    | ** ** | ** ** | ** ** | ** ** | ** ** | **of Inception**                | ** ** |
| ** **                                                                    | ** ** | ** ** | ** ** | ** ** | ** ** | **from Jan. 1, 2006** | ** ** |
| ** **                                                                    | ** ** | ** ** | ** ** | ** ** | ** ** | **through Dec. 31,**       | ** ** |
| ** **                                                                    | ** ** | **2010**   | ** ** | **2009**   | ** ** | **2010**                             | ** ** |
|                                                                          |       |       |       |       |       |                                 |       |
| Cash flows from operating activities:                                         |       |       |       |       |       |                                 |       |
| Net loss                                                                      |       | $          | (9,448     | )          | $          | (183,342                             | )          | $ | (281,707 | ) |
| Adjustments to reconcile net loss to net cash used   by operating activities: |       | —     |       | —     |       | —                               |       |
| Stock issued for services                                                     |       |       |       | 177,225    |       | 177,225                              |       |
| Change in operating assets and liabilities:                                   |       |       |       |       |       |                                 |       |
| Accounts Payable                                                              |       | 9,546      |       | —     |       | 26,055                               |       |
| Net cash provided by (used by) operating   activities                         |       | 98         |       | (6,117     | )          | (78,427                              | )          |
|                                                                          |       |       |       |       |       |                                 |       |
| Cash flows from investing activities:                                         |       |       |       |       |       |                                 |       |
| Net cash (used by) investing activities                                       |       | —     |       | —     |       | —                               |       |
|                                                                          |       |       |       |       |       |                                 |       |
| Cash flows from financing activities:                                         |       |       |       |       |       |                                 |       |
| Common stock issued for cash                                                  |       | —     |       | —     |       | 62,250                               |       |
| Proceeds (repayment) of loans                                                 |       | —     |       | 4,395      |       | 14,553                               |       |
| Contibution of capital                                                        |       | —     |       | 1,750      |       | 1,750                                |       |
| Net cash provided by financing activities                                     |       | —     |       | 6,145      |       | 78,553                               |       |
|                                                                          |       |       |       |       |       |                                 |       |
| Net increase (decrease) in cash                                               |       | 98         |       | 28         |       | 126                                  |       |
|                                                                          |       |       |       |       |       |                                 |       |
| Cash, beginning of the period                                                 |       | 28         |       | —     |       | —                               |       |
|                                                                          |       |       |       |       |       |                                 |       |
| Cash, end of the period                                                       |       | $          | 126        |       | $          | 28                                   |       | $ | 126 |   |
|                                                                          |       |       |       |       |       |                                 |       |
| Supplemental cash flow disclosure:                                            |       |       |       |       |       |                                 |       |
| Interest paid                                                                 |       | $          | —     |       | $          | —                               |       | $ | 13 |   |
| Taxes paid                                                                    |       | $          | —     |       | $          | —                               |       | $ | — |   |

 

The accompanying notes are an integreal part of these financial statements

 

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**Kabe Exploration, Inc.**

**(A Development Stage Company)**

**Notes to Financial Statements**

** **

**December 31, 2010**

 

**1.**              **Organization, Nature of Business**

 

Kabe Exploration, Inc. (the “Company”) was incorporated under the laws of the State of Nevada December 16, 2005. The company was originally formed for mineral exploration in the United States. The Company abandoned its Mineral Leases in 2008.

 

Current Business of the Company

 

On May 5, 2010 the Company effected a Share Exchange Agreement with the shareholders of Centiuum Holdings, Inc., a Delaware public company, whereby the Company was to exchange ten Million (10,000,000) newly issued Company shares for all of the outstanding shares of Centiuum Holdings, Inc., 1,000 shares, dependent upon certain investments by Centiuum into the Company. On October 29, 2010, the Company, with Centiuum Holdings, Inc. and shareholders of Centiuum, entered into an Agreement of Termination and Release with respect to this agreement.

 

The Company is seeking new business opportunities.

 

**2.**              **Summary of Significant Accounting Policies**

 

Basis of Presentation

 

The financial statements of the Company have been prepared using the accrual basis of accounting in accordance with generally accepted accounting principles in the United States. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates. Significant estimates made by management are, among others, realizability of long-lived assets, deferred taxes and stock option valuation.

 

The financial statements have, in management’s opinion, been properly prepared within the reasonable limits of materiality and within the framework of the significant accounting.

 

Cash and equivalents

 

Cash and equivalents include investments with initial maturities of three months or less.

 

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Fair Value of Financial Instruments

 

The Financial Accounting Standards Board issued ASC (Accounting Standards Codification) 820-10 (SFAS No. 157), “Fair Value Measurements and Disclosures” for financial assets and liabilities. FASB ASC 820-10 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. FASB ASC 820-10 defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. FASB ASC 820-10 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The carrying amounts of the Company’s financial liabilities as at September 30, 2010 were measured against the three levels of inputs required by the standard to measure fair value:

 
| Chapman   Industries Loan |   | $ | 6,776  |   | Level   2 based on promissory notes |
|---------------------------|--------|---|--------|--------|-------------------------------------|
| Loan   Payable – EPS |   | $ | 17,323 |   | Level   2 based on promissory notes |

 

Income Taxes

 

The Company utilizes FASB ASC 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company generated a deferred tax credit through net operating loss carryforward. However, a valuation allowance of 100% has been established, as the realization of the deferred tax credits is not reasonably certain, based on going concern considerations outlined in the following.

 

Going Concern

 

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern. The Company incurred a net loss of $9,448 in the year ended December 31, 2010 and has a cumulative net loss of $281,707 since inception. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease development of operations.

 

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish its plans to exploit or lease mining claims, or engage a working interest partner, in order to eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classifications or liabilities or other adjustments that might be necessary should the Company be unable to continue as a going concern.

 

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Development-Stage Company

 

The Company is considered a development-stage company, with limited operating revenues during the periods presented, as defined by Financial Accounting Standards Board FASB Accounting Standards Codification ASC 915. ASC 915 requires companies to report their operations, shareholders deficit and cash flows since inception through the date that revenues are generated from management’s intended operations, among other things. Management has defined inception as January 1, 2006. Since inception, the Company has incurred an operating loss of $281,707. The Company’s working capital has been generated through the sales of common stock. Management has provided financial data since January 1, 2006, “Inception” in the financial statements, as a means to provide readers of the Company’s financial information to make informed investment decisions.

 

Basic and Diluted Net Loss Per Share

 

Net loss per share is calculated in accordance with FASB ASC 260, Earnings Per Share for the period presented. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilative convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby we used to purchase common stock at the average market price during the period.

 

The Company has no potentially dilutive securities outstanding as of December 31, 2010.

 

The following is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations for the years ended December 31, 2010 and 2009:

 
| ** **                                                        | ** ** | **2010**   | ** ** | **2009**   |   |
|-------------------------------------------------------------------|------------|------------|------------|------------|--------|
|                                                              |       |       |       |       |   |
| Numerator:                                                        |       |       |       |       |   |
|                                                              |       |       |       |       |   |
| Basic and diluted net loss per share:                             |       |       |       |       |   |
|                                                              |       |       |       |       |   |
| Net Loss                                                          |       | $          | (9,448     | )          | $      | (183,342 | ) |
|                                                              |       |       |       |       |   |
| Denominator                                                       |       |       |       |       |   |
|                                                              |       |       |       |       |   |
| Basic and diluted weighted average number of   shares outstanding |       | 38,647,250 |       | 37,194,437 |   |
|                                                              |       |       |       |       |   |
| Basic and Diluted Net Loss Per Share                              |       | $          | (0.00      | )          | $      | (0.05 | ) |

 

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Recent Accounting Pronouncements

 

On December 1, 2009 the Company adopted the guidance in Accounting Standards Codification (“ASC”) 805, “*Business Combinations”*. ASC 805 establishes principles and requirements for how the acquirer in a business combination (i) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquired business; (ii) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (iii) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. The adoption of this statement had no effect on the Company’s reported financial position or results of operations.

 

On December 1, 2009, the Company adopted the newly ratified guidance which is part of ASC 815-40, “*Contracts in Entity’s**Own Equity*”. ASC 815-40 provides guidance for determining whether an equity-linked financial instrument (or embedded feature) is indexed to an entity’s own stock. The adoption of this statement had no effect on the Company’s reported financial position or results of operations.

 

In April 2010, the FASB issued ASU No. 2010-17, “Revenue Recognition - Milestone Method (Topic 605): Milestone Method of Revenue Recognition” (codified within ASC 605 - Revenue Recognition). ASU 2010-17 provides guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for research or development transactions. ASU 2010-17 is effective for interim and annual periods beginning after June 15, 2010. The adoption of this statement had no effect on the Company’s reported financial position or results of operations.

 

In March 2010, the FASB issued ASU No. 2010-11, “Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives” (codified within ASC 815 - Derivatives and Hedging). ASU 2010-11 improves disclosures originally required under SFAS No. 161. ASU 2010-11 is effective for interim and annual periods beginning after June 15, 2010. The adoption of this statement had no effect on the Company’s reported financial position or results of operations.

 

In May 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-19 (ASU 2010-19), Foreign Currency (Topic 830): Foreign Currency Issues: Multiple Foreign Currency Exchange Rates. The amendments in this Update are effective as of the announcement date of March 18, 2010. The Company does not expect the provisions of ASU 2010-19 to have any effect on the Company’s reported financial position or results of operations.

 

**3.****           ****Capital Structure**

 

During the period from inception through December 31, 2010, the Company entered into the following equity transactions:

 
| January 16,   2006: |   | Sold   1,500,000 shares of common stock at $.01 per share for $15,000. |
|--------------------------|--------|------------------------------------------------------------------------|
|                     |   |                                                                   |
| August 23,   2006:  |   | Sold   250,000 shares of common stock at $.01 per share for $5,000.    |

 

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| September 1,   2006: |   | Sold   575,000 shares of common stock at $0.02 per share, realizing $11,500                                       |
|---------------------------|--------|-------------------------------------------------------------------------------------------------------------------|
|                      |   |                                                                                                              |
| October 31,   2006:  |   | Sold   800,000 shares of common stock at $0.02 per share, realizing 16,000                                        |
|                      |   |                                                                                                              |
| November 30,   2006: |   | Sold   262,500 shares of common stock at $0.02 per share, realizing $5,250                                        |
|                      |   |                                                                                                              |
| April 15,   2008     |   | Sold   300,000 shares of common stock at $0.04 per share, Realizing $12,000.                                      |
|                      |   |                                                                                                              |
| April 13,   2009     |   | The   Board approved a ten-for-one reverse stock split.                                                           |
|                      |   |                                                                                                              |
| April 13,   2009     |   | Issued   450,000 shares of common stock at $0.10 per share for services. An expense of   $45,000 was recorded.    |
|                      |   |                                                                                                              |
| April 13,   2009     |   | Issued   256,000 shares of common stock at $0.10 per share for services. An expense of   $26,500 was recorded.    |
|                      |   |                                                                                                              |
| April 13,   2009     |   | Issued   50,000 shares of common stock at $0.10 per share for services. An expense of   $5,000 was recorded.      |
|                      |   |                                                                                                              |
| April 13,   2009     |   | Issued   1,016,250 shares of common stock at $0.10 per share for services. An expense   of $101,625 was recorded. |

 

Prior year statements have been restated to reflect the ten-for-one reverse stock split of April 13, 2009.

 

As of December 31, 2010 the Company has authorized 75,000,000 of $0.001 par common stock, of which 38,647,250 shares were issued and outstanding.

 

**4.****               ****Contingencies, Litigation**

 

There were no loss contingencies or legal proceedings against the Company with respect to matters arising in the ordinary course of business. Neither the Company nor any of its officers or directors is involved in any other litigation either as plaintiffs or defendants, and have no knowledge of any threatened or pending litigation against them or any of the officers or directors.

 

**5.****               ****Subsequent Events**

 

Events subsequent to December 31, 2010 have been evaluated through March 7, 2010, the date these statements were available to be issued, to determine whether they should be disclosed. Management found no subsequent events to be disclosed.

 

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**Item 9.    Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.**

 

None.

 

**Item 9A.     Controls and Procedures.**

 

*Evaluation of Disclosure Controls and Procedures*. Under the supervision and with the participation of our management, including our President, Chief Financial Officer and Secretary, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report. Based upon that evaluation, our President, Chief Financial Officer and Secretary concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

 

*Management’s Annual Report on Internal Control over Financial Reporting*. Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

 

Our management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2010. In making this assessment, our management used the COSO framework, an integrated framework for the evaluation of internal controls issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that, as of December 31, 2010, our internal control over financial reporting was effective.

 

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit the company to provide only management’s report in this annual report.

 

*Changes in Internal Control Over Financial Reporting.*During the most recent quarter ended December 31, 2010, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act)) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

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**PART III**

 

**Item 10.****                           ****Directors, Executive Officers and Corporate Governance.**

 

The following table sets forth the name and age of our executive officers and directors as of March 29, 2011:

 
| **Name**                 | ** ** | **Age**    | ** ** | **Position**                                                 |
|--------------------------|------------|------------|------------|--------------------------------------------------------------|
| ** **               | ** ** | ** ** | ** ** | ** **                                                   |
| Erik   Ulsteen           |       | 43         |       | President,   Chief Financial Officer, Secretary and Director |
| Stale   Werner Nielsen   |       | 43         |       | Director                                                     |
| Bjorn   Rene Singdahlsen |       | 39         |       | Director                                                     |

 

*Erik Ulsteen.*Mr. Ulsteen was appointed our President, Chief Financial Officer, Secretary and Director on February 14, 2008. Since 2004, Mr. Ulsteen has been Chief Executive Officer and Chairman of Emission & Power Solutions, Inc. (formerly Fuel FX International, Inc.). From 2002 until 2004, Mr. Ulsteen was President of Fuel FX International, Inc. Mr. Ulsteen’s broad management experience qualifies him to serve on our board.

 

*Stale Werner Nielsen.*Mr. Nielsen was appointed a Director on March 20, 2008. Since 2003, Mr. Nielsen has been a Managing Director of Hoyer Industries AS which markets and distributes Evian water and Dannon yogurt products in Norway and Sweden. From 2000 to 2003, Mr. Nielsen was a Managing Director of Margarinfabrikken Norge AS. Mr. Nielsen’s background as a Managing Director and key member of management of large multinational companies qualifies him to serve on our board.

 

*Bjorn Rene Singdahlsen*. Mr. Singdahlsen was appointed a Director on March 20, 2008. Since 2002 Mr. Singdahlsen has been Regional District Manager at Valora Holding AG, a trading and services company headquartered in Switzerland. Mr. Singdahlsen’s expertise as a District Manager and experience qualifies him to serve on our board.

 

**Term of Office**

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.

 

**Committees of the Board of Directors**

We presently do not have an audit committee, compensation committee or nominating committee. Our board of directors does not believe that it is necessary to have such committees because it believes that the functions of such committees can be adequately performed by the board of directors.

 

Our company does not have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for directors. The board of directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our company does not currently have any specific or minimum criteria for the election of nominees to the board of directors and we do not have any specific process or procedure for evaluating such nominees. The board of directors will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.

 

A shareholder who wishes to communicate with our board of directors may do so by directing a written request addressed to our president, Erik Ulsteen, at the address appearing on the first page of this annual report.

 

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**Board Leadership Structure and Role in Risk Oversight.**

 

We currently do not have a Chairman of the Board. Our President, Erik Ulsteen, calls meetings of the board. Currently our operations are limited and we believe that our current leadership structure allows the board to have better control of the direction of management, while still retaining independent oversight.

 

The board’s role in our risk oversight process includes receiving regular reports from members of management on areas of material risk to us, including operational, financial, legal and regulatory, and strategic risks. The full board receives these reports from management to enable it to understand our risk identification, risk management and risk mitigation strategies.

 

**Family Relationships**

No family relationships exist among our directors or executive officers.

 

**Involvement in Certain Legal Proceedings**

To our knowledge, during the past five years, none of our directors, executive officers, promoters, control persons, or nominees has been:

 

·                  the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

 

·                  convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

·                  subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

 

·                  found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law.

 

**Code of Ethics**

 

We have adopted a formal Code of Business Conduct and Ethics applicable to all Board members, executive officers and employees. Our Code of Business Conduct and Ethics has been filed as Exhibit 14 to this Report and is also available upon request at no charge by contacting Erik Ulsteen, President at our offices located at 5050 Avenida Encinas, Suite 270, Carlsbad, CA 92008. Our telephone number is (760) 931-1048.

 

**Compliance with Section 16(a) of the Exchange Act**

 

Section 16(a) of the Securities Exchange Act of 1934 requires our officers and directors, and persons who own more than 10 percent of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC.

 

To our knowledge, based solely on a review of the copies of such reports furnished to us, all reports under Section 16(a) required to be filed by our officers and directors and greater than ten percent beneficial owners were timely filed as of the date of this filing.

 

**Item 11.         Executive Compensation.**

 

**Compensation of Executive Officers**

 

Since inception, we have never paid to our executive officers, any salary or consulting fees.

 

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**Outstanding Equity Awards at Fiscal Year-End**

 

None of our executive officers had any equity awards at December 31, 2010.

 

**Employment Agreements**

We have no written employment agreement with our executive officer at this time.

 

**Director Compensation**

 

We did not pay or issue any compensation to our directors during 2010.

 

**Change of Control**

 

There is no compensatory plan or arrangement with respect to any executive officer which results or will result from the resignation, retirement or any other termination of employment with us, or from a change in our control.

 

**Item 12.         Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.**

 

The following table sets forth certain information regarding the ownership of our capital stock, as of March 29, 2011, for: (i) each director; (ii) each person who is known to us to be the beneficial owner of more than 5% of our outstanding common stock; (iii) each of our named executive officers; and (iv) all of our current executive officers and directors of as a group. Except as otherwise indicated in the footnotes, all information with respect to share ownership and voting and investment power has been furnished to us by the persons listed. Except as otherwise indicated in the footnotes, each person listed has sole voting power with respect to the shares shown as beneficially owned.

 
| **Name and Address of Beneficial   Owner** | ** ** | **Amount and Nature of   Beneficial   Ownership** | ** ** | **Percent of Class   (2)** | ** ** |
|----------------------------------------------------------------|------------|------------------------------------------------------------------|------------|--------------------------------------|------------|
| ** **                                                     |       |                                                             |       |                                 |       |
| **Erik Ulsteen**                                               |       | 17,646,000                                                       |       | 45.7                                 | %          |
| **Stale Werner Nielsen**                                       |       | 130,000                                                          |       | *                                    |       |
| **Bjorn Rene Singdahlsen**                                     |       | 130,000                                                          |       | *                                    |       |
| **All officers and directors as a   group (3 persons)**        |       | 17,906,000                                                       |       | 46.4                                 | %          |

 

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(1)          Except as otherwise indicated, the address of each beneficial owner is c/o Kabe Exploration Inc., 5050 Avenidas Encinas, Suite 270, Carlsbad, CA 92008.

 

(2)          Applicable percentage ownership is based on 38,647,250 shares of common stock outstanding as of March 29, 2011, together with securities exercisable or convertible into shares of common stock within 60 days of March 29, 2011 for each stockholder. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock that are currently exercisable or exercisable within 60 days of March 29, 2011 are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

 

**Item 13.         Certain Relationships and Related Transactions, and Director Independence.**

 

We issued 15,000,000 total shares of common stock to Antony Claydon, our former President and former director for total consideration of $15,000 effective January 16, 2006. The shares were issued pursuant to Section 4(2) of the Securities Act of 1933 and are restricted shares as defined in the Securities Act.

 

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We issued 25,000,000 total shares of common stock to Rory Moss, our former director for total consideration of $2,500 effective August 23, 2006. The shares were issued pursuant to Section 4(2) of the Securities Act of 1933 and are restricted shares as defined in the Securities Act.

 

On December 18, 2007, Antony Claydon, our former President, Chief Financial Officer and Secretary and Rory Moss, our former director entered into an Agreement for the Purchase of Common Stock with Erik Ulsteen, pursuant to which Messrs. Claydon and Moss sold an aggregate of 17,500,000 shares of our common stock to Mr. Ulsteen. The purchase price for the sale was $50,000, which was paid in cash. Mr. Ulsteen acquired approximately 51.7% of our total outstanding number of shares of common stock and the 17,500,000 shares represent Mr. Ulsteen’s entire beneficial holdings in our company. On February 14, 2008, Mr. Claydon resigned as our President, Chief Financial Officer and Secretary and Mr. Ulsteen was appointed President, Chief Financial Officer and Secretary of our company as well as a director.

 

**Item 14.         Principal Accounting Fees and Services.**

 

**Audit Fees**

 

For our fiscal year ended December 31, 2010, we were billed approximately $1,700 for professional services rendered for the audit and reviews of our financial statements. For our fiscal year ended December 31, 2009, we were billed approximately $2,300 for professional services rendered for the audit and reviews of our financial statements.

 

**Other Audit Related Fees**

 

For our fiscal years ended December 31, 2010 and 2009, we were not billed for professional services rendered to other audit related fees.

 

**Tax Fees**

 

For our fiscal years ended December 31, 2010 and 2009, we were not billed for professional services rendered for tax compliance, tax advice, and tax planning.

 

**All Other Fees**

 

We did not incur any other fees related to services rendered by our principal accountant for the fiscal years ended December 31, 2010 and 2009.

 

Our Board of Directors has adopted a procedure for pre-approval of all fees charged by our independent auditors. Under the procedure, the Board approves the engagement letter with respect to audit, tax and review services. Other fees are subject to pre-approval by the Board, or, in the period between meetings, by a designated member of Board. Any such approval by the designated member is disclosed to the entire Board at the next meeting. The audit and tax fees paid to the auditors with respect to fiscal year 2010 were pre-approved by the entire Board of Directors.

 

**Item 15.**       **Exhibits.**

 
| **Exhibit No.** | ** ** | **Title of Document**                                                                                           |
|----------------------|------------|---------------------------------------------------------------------------------------------------------------------------|
| 3.1                  |       | Articles   of Incorporation (Incorporated by reference to exhibit 3.1 on Form 10-SB   filed on March 30, 2007). |
|                 |       |                                                                                                                      |
| 3.2                  |       | Bylaws   (Incorporated by reference to exhibit 3.2 on Form 10-SB filed   March 30, 2007).                       |

 

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| 14     |   | Code   of Ethics (Incorporated by reference to exhibit 14 on Form 10-KSB filed   March 28, 2008).                                                          |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                            |
| 31.1   |   | Certification   of Chief Executive Officer Pursuant to Rule 13a-14(a) of the   Securities Exchange Act of 1934                                        |
|   |   |                                                                                                                                                            |
| 32.1   |   | Certification   of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as   adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |

 

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**SIGNATURES**

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
|   | **KABE EXPLORATION, INC.** |
|--------|---------------------------------|
|   |                            |
|   | By:                             | /s/   Erik Ulsteen |   |
|   |                            | Erik   Ulsteen |   |
|   |                            | President,   Chief Financial Officer, |   |
|   |                            | Secretary |   |
|   |                            |   |   |
|   | Date:                           | March 29,   2011 |   |

 

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 
| **Name**                     | ** ** | **Title**                                                    | ** ** | **Date**              |
|------------------------------|------------|--------------------------------------------------------------|------------|-----------------------|
| ** **                   | ** ** | ** **                                                   | ** ** | ** **            |
| /s/   Erik Ulsteen           |       | President,   Chief Financial Officer, Secretary and Director |       | March 29,   2011 |
| Erik   Ulsteen               |       |                                                         |       |                  |
|                         |       |                                                         |       |                  |
| /s/   Stale Werner Nielsen   |       | Director                                                     |       | March 29,   2011 |
| Stale   Werner Nielsen       |       |                                                         |       |                  |
|                         |       |                                                         |       |                  |
| /s/   Bjorn Rene Singdahlsen |       | Director                                                     |       | March 29,   2011 |
| Bjorn   Rene Singdahlsen     |       |                                                         |       |                  |

 

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