HALL TEES, INC.

The Company’s management selects accounting principles generally accepted in the United States of America and adopts methods for their application. The application of accounting principles requires the estimating, matching and timing of revenue and expense. Below is a summary of certain significant accounting policies selected by management. The condensed consolidated financial statements and notes are representations of the Company’s management which is responsible for their integrity and objectivity. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company's system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

REVENUE. Revenue for the three months ended September 30, 2014 was $11,090 compared to $21,927 for the three month periods ended September 30, 2013. Revenue for the nine months ended September 30, 2014 was $39,297 compared to $50,353 for the nine month periods ended September 30, 2013. Revenue was lower in the periods in 2014 as more contract work was done compared to custom jobs. Contract work pays less than custom work.

COST OF SALES: Cost of sales was $0 for the three months ended September 30, 2014 compared to $4,417 (or 20% of revenue) for the same period in 2013. Cost of sales was $2,445 (or 6% of revenue) for the nine months ended September 30, 2014 compared to $12,176 (or 24% of revenue) for the same period in 2013. The large decrease in cost of sales as a percent of sales is due to product mix as sales were geared toward more contract versus custom work.

OPERATING EXPENSES. Operating expenses, exclusive of depreciation expense of $3,841 and $3,641, were $27,774 and $27,942 for the three month periods ended September 30, 2014 and 2013, respectively. The expenses remained relatively the same. Operating expenses, exclusive of depreciation expense of $11,524 and $12,131, were $74,186 and $90,153 for the nine month periods ended September 30, 2014 and 2013, respectively. The decrease in expenses was due to a reduction in professional fees of approximately $12,000 and other expenses of $4,000.

NET LOSS. Net Loss for the nine months ended September 30, 2014 and 2013 was $20,525 versus $14,060, respectively. The main driver behind the increase in the net loss was the performing of more contract work versus custom work as discussed above. Net Loss for the nine months ended September 30, 2014 and 2013 was $48,850 versus $64,052, respectively. The main driver behind the increase in the net loss was the performing of more contract work versus custom work as discussed above.