On April 12, 2010, the Company purchased
$82,500 of tooling for its proprietary bearings. The Company and the vendor agreed that 328,000 shares of common stock
would be issued as payment in full for the tooling assets. As the value of the common stock obligation totaled $104,960
at April 12, 2010 (the closing stock price was $0.32 per share on April 12, 2010), the Company recorded in equity $104,960 and
recorded a corresponding loss on settlement with stock for $22,460 for the difference between the value of the common stock to
be issued and the value of the tooling asset acquired. On June 9, 2010, the Company issued 328,000 shares of common
stock to pay the obligation in full. In May 2010 the Company sold the tooling to Godfrey for $132,880. The portion of
the sales price in excess of the toolings original cost was deemed to be contributed capital due to the related party nature
of the transaction.
As of October 31, 2012, the Company
had office equipment of $3,868, net of accumulated depreciation of $1,414. For the year ended October 31, 2012 and 2011, the Company
recorded depreciation expense of $821 and $593, respectively.