In August 2011, the Company purchased a water
truck for $35,759 cash. In October 2011, the Company's water truck was placed in service pursuant to a lease arrangement with
an unaffiliated third party. The lease requires the lessee to pay the Company $2,500 per month plus 10% of the revenue collected
by the lessee from its use or sublease of the truck. The lease is for a term of two years and the lessee has the option to
purchase the truck at the end of the lease term for 75% of the Company's purchase price.
The Company calculated the depreciation of the
truck using straight-line method with a useful life of three years. For the year ended September 30, 2012, the Company recorded
depreciation expense of $11,055 and lease income of $19,203. At June 30, 2012, the Company terminated the lease and wrote off the
lease income receivable of $5,616 as bad debt expense due to the lessees cash flow problems.