Business description of Loop-Industries-Inc

FIRST AMERICAN GROUP INC. (A Development Stage Company) STATEMENTS OF EXPENSES

The accompanying notes are an integral part of these audited financial statements 21 FIRST AMERICAN GROUP INC. (A Development Stage Company) STATEMENT OF STOCKHOLDERS' EQUITY FOR THE PERIOD FROM MARCH 11, 2010 (INCEPTION) TO SEPTEMBER 30, 2011

The accompanying notes are an integral part of these audited financial statements 22 FIRST AMERICAN GROUP INC. (A Development Stage Company) STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of these audited financial statements 23 FIRST AMERICAN GROUP INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS September 30, 2011 NOTE 1 - NATURE OF OPERATIONS First American Group Inc. ("the Company") was incorporated in Nevada on March 11, 2010 under the name Radikal Phones Inc. We changed our name to First American Group Inc. on October 7, 2010. The Company plans to engage in the development, sales and marketing of voice-over-Internet-protocol ("VOIP") telephone services to enable end-users to place free phones calls over the internet in return for viewing and listening to advertising. We also plan to license or sell our proprietary software to companies looking for similar business opportunities. The company has limited operations and is considered to be in the development stage. The company has limited operations and is considered to be in the development stage. NOTE 2 - GOING CONCERN As of September 30, 2011, the accompanying audited financial statements have been presented on the basis that it is a going concern in the development stage, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. For the period March 11, 2010 (date of inception) through September 30, 2011 the Company has had a net loss of $27,183 consisting of incorporation fees and professional fees for the Company to continue its SEC reporting requirements. As of September 30, 2011, the Company has not emerged from the development stage. In view of these matters, recoverability of any asset amounts shown in the accompanying audited financial statements is dependent upon the Company's ability to begin operations and to achieve a level of profitability. Since inception, the Company has financed its activities principally from the sale of equity securities. The Company intends on financing its future development activities and its working capital needs largely from loans and the sale of public equity securities with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements. NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accompanying financial statements have been prepared in accordance with United States generally accepted accounting principles (US GAAP) for financial information and in accordance with Securities and Exchange Commission's Regulation S-X. They reflect all adjustments which are, in the opinion of the Company's management, necessary for a fair presentation of the financial position and operating results as of and for the period March 11, 2010 (date of inception) to September 30, 2011. ACCOUNTING BASIS These financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America. CASH AND CASH EQUIVALENTS Cash and cash equivalents are reported in the balance sheet at cost, which approximates fair value. For the purpose of the financial statements, cash equivalents include all highly liquid investments with maturity of three months or less. 24 FIRST AMERICAN GROUP INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS September 30, 2011 NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles of the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. The more significant areas requiring the use of estimates include asset impairment, stock-based compensation, and future income tax amounts. Management bases its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actual results may differ from the estimates. LOSS PER SHARE The Company adopted ASC 260, Earnings per Share. Basic earnings (loss) per share are calculated by dividing the Company's net income available to common shareholders by the weighted average number of common shares outstanding during the year/period. The diluted earnings (loss) per share are calculated by dividing the Company's net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding for the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive debt or equity. There are no dilutive shares outstanding. The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during the period shown. INCOME TAXES The Company adopted ASC 740, Income Taxes, at its inception. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carryforwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. No deferred tax assets or liabilities were recognized as of September 30, 2011. RELATED PARTIES Related parties, which can be a corporation, individual, investor or another entity are considered to be related if the party has the ability, directly or indirectly, to control the other party or exercise significant influence over the Company in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence. The Company has these relationships. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS We do not expect the adoption of recently issued accounting pronouncements to have a significant impact on our results of operations, financials position, or cash flow. 25 FIRST AMERICAN GROUP INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS September 30, 2011 NOTE 4 - STOCKHOLDERS' EQUITY COMMON STOCK During the fiscal year ended September 30, 2011, the company raised $35,836 through the issuance of 361,450 common shares ded $0.10/share. On March 11, 2010, the Company issued 2,000,000 shares for $16,000 cash. NOTE 5 - RELATED PARTY As of September 30, 2011, the Director of the Company advanced $325 to pay expenses on behalf of Company. Advances bear no interest, are unsecured, and due on demand. NOTE 6 - INCOME TAXES Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has incurred a net operating loss of $27,183 from inception through September 30, 2011 which expires in 2031. The Company has adopted ASC 740, "Accounting for Income Taxes", as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for non-capital losses carried forward. The potential benefit of the net operating loss has not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the loss carried forward in future years. Significant components of Company's deferred tax assets liabilities after applying enac corporate income tax rates, are as follows as of: September 30, September 30, 2011 2010 $ $ ------ ------ Deferred income tax asset Net operating loss carry forward 9,242 1,564 Valuation allowance (9,242) (1,564) ------ ------ Net deferred income tax asset -- -- ====== ====== 26 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL DISCLOSURE None. ITEM 9A. CONTROLS AND PROCEDURES DISCLOSURE CONTROLS AND PROCEDURES As required by Rule 13a-15/15d-15 under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), as of September 30, 2011, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our management, our President and Treasurer (Principal Executive Officer and Principal Financial Officer). Based upon the results of that evaluation, our management has concluded that, as of September 30, 2011, our disclosure controls and procedures were ineffective due to lack of segregation of duties and provide reasonable assurance that material information related to our Company required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management to allow timely decisions on required disclosure. MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING This Annual Report does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of the Company's registered public accounting firm due to a transition period established by rules of the SEC for newly public companies. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING. There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting. ITEM 9B. OTHER INFORMATION None. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Our executive officer's and director's and their respective age's as of September 30, 2011 are as follows: Name Age Positions and Offices ---- --- --------------------- Mr. Mazen Kouta 29 President, Treasurer and Director Mr. Zeeshan Zajid 28 Secretary & Director The directors named above will serve until the next annual meeting of the stockholders or until their respective resignation or removal from office. Thereafter, directors are anticipated to be elected for one-year terms at the annual stockholders' meeting. Officers will hold their positions at the pleasure of the Board of Directors, absent any employment agreement, of which none currently exists or is contemplated. 27 Set forth below is a brief description of the background and business experience of our executive officers and directors for the past five years. MAZEN KOUTA Mazen Kouta has served as President, Treasurer and Director since April 27, 2010. Since November 2008, Mr. Kouta has been working as a business development consultant for Azzam Business Group where he was instrumental in the restructuring of the company's technology product group. At the same time, he has been operating a small chain of internet cafe in Lebanon. Between November 2005 and October 2009, he worked for Cyber Storm System Software (based in Sharjah, United Arab Emirates) where he managed the company's IT infrastructure. Between January 2003 and October 2005, Mr. Kouta worked for Azzam Business Group as a sales executive. Mr. Kouta graduated from the Industrial Technical Institute, Beirut, Lebanon, with a Diploma Superior in Airplane Maintenance in August 2004. These experiences, qualifications and attributes have led to our conclusion that Mr. Kouta should be serving as a member of our Board of Directors in light of our business and structure. ZEESHAN SAJID Zeeshan Sajid has served as our Secretary and Director since April 27, 2010. In July 2008, Mr. Sajid founded Xeeonix Technologies, a Pakistan-based software development company, specialized in providing custom web development and VoIP solutions. Between September 2006 and June 2008, Mr. Sajid was employed by Media Routes. He worked on the development of highly scalable, high performance, carrier grade software products for next generation IP networks. Between July 2005 and August 2006, he worked as a software developer for Altair Technologies in Islamabad, Pakistan. In his job, he worked on the development of a product to analyze Internet traffic. In 2006, he published a research paper in an International Conference on Graphics Multimedia and Imaging and won the all-Pakistan software development competition known as SIVCOM 2006. In June 2005, Mr. Sajid completed his Bachelor of Computer Science from the National University of Computer & Emerging Sciences, NUCES (formerly FAST) in Islamabad, Pakistan. These experiences, qualifications and attributes have led to our conclusion that Mr. Sajid should be serving as a member of our Board of Directors in light of our business and structure. TERM OF OFFICE All directors hold office until the next annual meeting of the stockholders of the Company and until their successors have been duly elected and qualified. The Company's Bylaws provide that the Board of Directors will consist of no less than three members. Officers are elected by and serve at the discretion of the Board of Directors. DIRECTOR INDEPENDENCE Our board of directors is currently composed of two members, neither of whom qualifies as an independent director in accordance with the published listing requirements of the NASDAQ Global Market. The NASDAQ independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director, nor any of his family members has engaged in various types of business dealings with us. In addition, our board of directors has not made a subjective determination as to each director that no relationships exist which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, though such subjective determination is required by the NASDAQ rules. Had our board of directors made these determinations, our board of directors would have reviewed and discussed information provided by the directors and us with regard to each director's business and personal activities and relationships as they may relate to us and our management. CERTAIN LEGAL PROCEEDINGS No director, nominee for director, or executive officer of the Company has appeared as a party in any legal proceeding material to an evaluation of his ability or integrity during the past five years. 28 SIGNIFICANT EMPLOYEES AND CONSULTANTS We have no employees. Other than our two officers and directors, we currently have no independent contractors or consultants. AUDIT COMMITTEE AND CONFLICTS OF INTEREST Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our directors. The Board of Directors has not established an audit committee and does not have an audit committee financial expert, nor has the Board of Directors established a nominating committee. The Board is of the opinion that such committees are not necessary since the Company is an early exploration stage company and has only two directors, and to date, such directors have been performing the functions of such committees. Thus, there is a potential conflict of interest in that our directors and officers have the authority to determine issues concerning management compensation, nominations, and audit issues that may affect management decisions. There are no family relationships among our directors or officers. Other than as described above, we are not aware of any other conflicts of interest with any of our executive officers or directors. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors, and persons who own more than ten percent of a registered class of our equity securities, file reports of ownership and changes in ownership with the SEC. Executive officers, directors and greater-than-ten percent stockholders are required by SEC regulations to furnish us with all Section 16(a) forms they file. Based on our review of filings made on the SEC website, and the fact of us not receiving certain forms or written representations from certain reporting persons that they have complied with the relevant filing requirements, we believe that, during the year ended September 30, 2011, all of our executive officers, directors and greater-than-ten percent stockholders complied with all Section 16(a) filing requirements. CODE OF ETHICS The Company has not adopted a code of ethics that applies to its principal executive officers, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Company has not adopted a code of ethics because it has only commenced operations. ITEM 11. EXECUTIVE COMPENSATION The following tables set forth certain information about compensation paid, earned or accrued for services by our President and all other executive officers (collectively, the "Named Executive Officers") in the fiscal years ended September 30, 2011 and 2010: SUMMARY COMPENSATION TABLE The table below summarizes all compensation awarded to, earned by, or paid to our Officers for all services rendered in all capacities to us for the fiscal periods indicated.

---------- (1) President, Treasurer and Director. (2) Secretary and Director. 29 We currently do not pay any compensation to our directors serving on our board of directors. STOCK OPTION GRANTS We have not granted any stock options to the executive officers since our inception. Upon the further development of our business, we will likely grant options to directors and officers consistent with industry standards for junior mineral exploration companies. EMPLOYMENT AGREEMENTS The Company did not have any employment agreements with any of its officers or directors during the year ended September 30, 2011. DIRECTOR COMPENSATION The following table sets forth director compensation or the fiscal year ended September 30, 2011:

We currently do not pay any compensation to our directors for serving on our board of directors. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table lists, as of September 30, 2011, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of our Company; and (iii) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal shareholders and management is based upon information furnished by each person using "beneficial ownership" concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power. The percentages below are calculated based on 2,361,450 shares of our common stock issued and outstanding as of September 30, 2011. We do not have any outstanding warrant, options or other securities exercisable for or convertible into shares of our common stock. 30 Number of Name and Address Shares Owned Percent of Title of Class of Beneficial Owner (1) Beneficially Class Owned -------------- ----------------------- ------------ ----------- Common Stock: Mazen Kouta, President, 1,125,000 47.6% President, Chief Executive Officer, Treasurer and Director Common Stock: Zeeshan Zajid, 875,000 37% Secretary and Director Common Stock: All executive officers and 2,000,000 84.6% directors as a group ---------- (1) Unless otherwise noted, the address of each person or entity listed is, c/o First American Group Inc., 11037 Warner Ave, Suite 132, Fountain Valley, California 92708. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS None. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES For the year ended September 30, 2011 and 2010, the total fees charged to the company for audit services, including quarterly reviews were $7,400 (including a payment of $4,000 after September 30, 2011 for the audit services included in this Annual report on Form 10-K) and $4,000, for audit-related services were $0 and $0 and for tax services and other services were $0 and $0, respectively. PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE (a) The following Exhibits, as required by Item 601 of Regulation SK, are attached or incorporated by reference, as stated below. Number Description ------ ----------- 3.1.1 Articles of Incorporation* 3.1.2 Certificate of Amendment* 3.2 Bylaws* 31.1 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of Principal Executive Officer and Principal Financial Officer and pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101 Interactive data files pursuant to Rule 405 of Regulation S-T. ---------- * Incorporated by reference to the Registrant's Form S-1 (File No. 333-171091), filed with the Commission on December 10, 2010. 31 SIGNATURES In accordance with Section 13 or 15(d) of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FIRST AMERICAN GROUP INC. (Name of Registrant) Date: January 11, 2012 By: /s/ Mazen Kouta ------------------------------------ Name: Mazen Kouta Title: President, Treasurer, Principal Executive Officer, Principal Accounting Officer, and Principal Financial Officer. 32 EXHIBIT INDEX Number Description ------ ----------- 3.1.1 Articles of Incorporation* 3.1.2 Certificate of Amendment* 3.2 Bylaws* 31.1 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of Principal Executive Officer and Principal Financial Officer and pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101 Interactive data files pursuant to Rule 405 of Regulation S-T. ---------- * Incorporated by reference to the Registrant's Form S-1 (File No. 333-171091), filed with the Commission on December 10, 2010.

Business description of Loop-Industries-Inc from last 10-k form