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<SEC-DOCUMENT>0001010549-08-000495.txt : 20080610
<SEC-HEADER>0001010549-08-000495.hdr.sgml : 20080610
<ACCEPTANCE-DATETIME>20080610165820
ACCESSION NUMBER:		0001010549-08-000495
CONFORMED SUBMISSION TYPE:	S-1/A
PUBLIC DOCUMENT COUNT:		6
FILED AS OF DATE:		20080610
DATE AS OF CHANGE:		20080610

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MB SOFTWARE CORP
		CENTRAL INDEX KEY:			0000714256
		STANDARD INDUSTRIAL CLASSIFICATION:	ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842]
		IRS NUMBER:				592219994
		STATE OF INCORPORATION:			CO
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-1/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-150189
		FILM NUMBER:		08891319

	BUSINESS ADDRESS:	
		STREET 1:		777 MAIN STREET
		STREET 2:		SUITE 3100
		CITY:			FORT WORTH
		STATE:			TX
		ZIP:			76102
		BUSINESS PHONE:		8173497020

	MAIL ADDRESS:	
		STREET 1:		777 MAIN STREET
		STREET 2:		SUITE 3100
		CITY:			FORT WORTH
		STATE:			TX
		ZIP:			76102

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	INAV TRAVEL CORPORATION
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	TWISTEE TREAT CORP
		DATE OF NAME CHANGE:	19910220

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	TWISTEE FREEZ CORP
		DATE OF NAME CHANGE:	19840917
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-1/A
<SEQUENCE>1
<FILENAME>mbsoftwares061008s1a.htm
<DESCRIPTION>S-1/A
<TEXT>
<html>

<head>
<title>Wound Management Technologies, Inc. - Form S-1/A</title>
</head>

<body>

<div style="border-top-style: solid; border-top-width: 1; padding-top: 1">
  <hr color="#000000" size="5">
</div>
<b>
<p align="center">UNITED STATES <br>
SECURITIES AND EXCHANGE COMMISSION <br>
<font size="2">Washington, D.C. 20549 </p>
</font>
<p ALIGN="CENTER">AMENDMENT NO. 1 <br>
TO <br>
FORM S-1 <br>
REGISTRATION STATEMENT <br>
<font size="2">Under <br>
THE SECURITIES ACT OF 1933 </p>
<p align="center">Registration No. 333-150189 </p>
</font>
<p align="center"><font size="4">WOUND MANAGEMENT TECHNOLOGIES, INC. <br>
</font><font size="2">(Exact name of registrant as specified in its charter) </p>
</font></b>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="33%" align="center"><font SIZE="2"><b>Texas</b></font></td>
    <td WIDTH="33%" align="center"><font SIZE="2"><b>3842</b></font></td>
    <td WIDTH="34%" align="center"><font SIZE="2"><b>59-2220004</b></font></td>
  </tr>
  <tr>
    <td WIDTH="33%" align="center"><font SIZE="2"><b>(State Or Other</b></font></td>
    <td WIDTH="33%" align="center"><font SIZE="2"><b>(Primary Standard
    Industrial</b></font></td>
    <td WIDTH="34%" align="center"><font SIZE="2"><b>(IRS Employer</b></font></td>
  </tr>
  <tr>
    <td WIDTH="33%" align="center"><font SIZE="2"><b>Jurisdiction Of
    Incorporation</b></font></td>
    <td WIDTH="33%" align="center"><font SIZE="2"><b>Classification Code Number)</b></font></td>
    <td WIDTH="34%" align="center"><font SIZE="2"><b>Identification No.)</b></font></td>
  </tr>
  <tr>
    <td WIDTH="33%" align="center"><font SIZE="2"><b>or Organization)</b></font></td>
    <td WIDTH="33%" align="center">&nbsp;</td>
    <td WIDTH="34%" align="center">&nbsp;</td>
  </tr>
</table>
<b><font size="2">
<p ALIGN="CENTER">777 Main Street <br>
Suite 3100 <br>
Fort Worth, Texas 76102 <br>
Ph: (817) 820-7080 <br>
(Address, including zip code, and telephone number, <br>
including area code, of registrant&#146;s principal executive offices) </p>
<p ALIGN="CENTER">Scott A. Haire <br>
777 Main Street <br>
Suite 3100 <br>
Fort Worth, Texas 76102 <br>
Ph: (817) 820-7080 <br>
(Name, address, including zip code, and telephone number, <br>
including area code, of agent for service) </p>
<p align="center">With Copies To: </p>
<p ALIGN="CENTER">Colbert Johnston LLP <br>
Attention: Robert J. Johnston, Esq. <br>
6021 Morriss Road, Suite 101 <br>
Flower Mound, Texas 75028 <br>
Ph: (972) 724-3338 <br>
Fax: (972) 724-1922 </p>
</font></b><font SIZE="2">
<p>Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this registration statement. </p>
<p>If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box: <font face="Times New Roman">&#9633;</font></p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p align="justify">If this Form is filed to register additional securities of an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
<font face="Times New Roman">&#9633;</font></p>
<p align="justify">If this form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
Registration Statement for the same offering. <font face="Times New Roman">&#9633;</font></p>
<p align="justify">If this form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
Registration Statement for the same offering. <font face="Times New Roman">&#9633;</font></p>
<p align="justify">Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company; </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111" height="49">
  <tr>
    <td WIDTH="50%" height="15"><font FACE="Times New Roman PSMT" SIZE="2">Large
    Accelerated filer <font face="Times New Roman" SIZE="2">&#9633;</font></font></td>
    <td WIDTH="50%" height="15"><font FACE="Times New Roman PSMT" SIZE="2">
    Accelerated filer <font face="Times New Roman" SIZE="2">&#9633;</font></font></td>
  </tr>
  <tr>
    <td WIDTH="50%" height="19">&nbsp;</td>
    <td WIDTH="50%" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="50%" height="15"><font FACE="Times New Roman PSMT" SIZE="2">
    Non-accelerated filer <font face="Times New Roman" SIZE="2">&#9633;</font></font></td>
    <td WIDTH="50%" height="15"><font FACE="Times New Roman PSMT" SIZE="2">
    Smaller reporting company </font><font SIZE="2" face="Wingdings">&#253;</font></td>
  </tr>
</table>
<font FACE="Times New Roman PS" SIZE="2"><b>
<p align="center">CALCULATION OF REGISTRATION FEE </p>
</b></font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000; border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000; border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000; border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Proposed</font></td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000; border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Proposed</font></td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000">
    <font SIZE="2">Title of each Class</font></td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000">&nbsp;</td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000">
    <font SIZE="2">Maximum</font></td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000">
    <font SIZE="2">Maximum</font></td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000; border-right-style: solid; border-right-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000">
    <font SIZE="2">of Securities</font></td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000">
    <font SIZE="2">Amount to be</font></td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000">
    <font SIZE="2">Offering Price</font></td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000">
    <font SIZE="2">Aggregate</font></td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000; border-right-style: solid; border-right-width: 1">
    <font SIZE="2">Amount of</font></td>
  </tr>
  <tr>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">to be registered</font></td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Registered</font></td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">per share (1)</font></td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Offering Price</font></td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Registration Fee</font></td>
  </tr>
  <tr>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Common Stock</font></td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">3,993,104</font></td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$1.50</font></td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$5,989,656</font></td>
    <td WIDTH="20%" align="center" style="border-left: 1px solid #000000; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$235.39</font></td>
  </tr>
</table>
<font SIZE="2">
<p>(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457. </p>
<p ALIGN="JUSTIFY">The Registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting pursuant to said
section 8(a), may determine. </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'><b>
<p align="center">PROSPECTUS </p>
<p align="center">3,993,104 </p>
</b>
<p align="justify" style="text-indent: 3%">Shares of common stock of Wound
Management Technologies, Inc. (par value $0.001 per share) </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">This prospectus relates to the resale
by certain selling shareholder identified in the section of this prospectus
entitled &quot;Selling Shareholder&quot; on page 32 and their permitted transferees, from
time to time of up to 3,993,104 shares of our common stock under this
prospectus, issued as: </p>
<p align="justify" style="text-indent: 3%">-&nbsp;&nbsp;&nbsp;&nbsp; 86,207
shares issued by the Company in a private placement; </p>
<p align="justify" style="text-indent: 3%">-&nbsp;&nbsp;&nbsp;&nbsp; up to
1,500,000 shares to be issued upon the exercise of warrants, which were granted
by the Company in a private placement; </p>
<p align="justify" style="text-indent: 3%">-&nbsp;&nbsp;&nbsp;&nbsp; up to
1,206,897 shares to be issued upon the conversion of notes issued by the Company
in a private placement; and </p>
<p align="justify" style="text-indent: 3%">-&nbsp;&nbsp;&nbsp;&nbsp; up to
1,200,000 shares to be transferred upon the exercise of warrants, which were
granted by H.E.B., LLC, a Nevada limited liability company and the Company&#146;s
majority shareholder </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">We are not offering or selling any of
our common stock pursuant to this prospectus. We will not receive any proceeds
from any sales made by the selling shareholder in this offering but we will pay
the expense of this offering. We will, however, receive the proceeds from the
exercise of the warrants and options issued to the selling shareholder if and
when they are exercised. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The selling shareholder may, but is
not obligated to, offer all or part of their shares for resale from time to time
through public or private transactions, at either prevailing market prices or at
privately negotiated prices. We do not know when or in what amount the selling
shareholder may offer shares for sale, including whether the selling shareholder
will sell any or all of the shares offered by this Prospectus. </p>
<p align="justify" style="text-indent: 3%">Investing in our common stock
involves risks. See &quot;Risk Factors&quot; beginning on page 5 to read about factors you
should consider before buying shares of our common stock. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of
these securities or passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense. </p>
<p align="justify" style="text-indent: 3%">Our shares of common stock are traded
on the NASD&#146;s Over-the-Counter Bulletin Board under the symbol &quot;MBSB.&quot;<b> </b>
</font></p>
<font size="2">
<p ALIGN="JUSTIFY">INFORMATION CONTAINED IN THIS PRELIMINARY PROSPECTUS IS NOT
COMPLETE AND MAY BE CHANGED. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED UNTIL THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PRELIMINARY PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES NOR DOES IT SEEK OFFERS TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. </p>
<p align="center">The date of this prospectus is June __, 2008. </p>
<p align="center">2 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font SIZE="2"><b>
<p align="center">ABOUT THIS PROSPECTUS </p>
</b>
<p ALIGN="JUSTIFY">You should rely only on the information contained in this
document or any other document to which we refer you. Neither we nor the selling
shareholder have authorized anyone to provide you with different information. If
anyone provides you with different or inconsistent information, you should not
rely on it. Neither we nor the selling shareholder are making an offer to sell
these securities in a jurisdiction where the offer or sale is not permitted. The
information contained in this document is current only as of its date,
regardless of the time of delivery of this prospectus or of any sales of shares
of common stock. Our business, financial condition, results of operations and
prospects may have changed since that date. </p>
</font><font SIZE="2"><b>
<p align="center">TABLE OF CONTENTS </p>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="80%" bgcolor="#E6E6E6"><font size="2">PROSPECTUS SUMMARY</font></td>
    <td WIDTH="20%" align="center" bgcolor="#E6E6E6"><font size="2">2</font></td>
  </tr>
  <tr>
    <td WIDTH="80%"><font size="2">RISK FACTORS</font></td>
    <td WIDTH="20%" align="center"><font size="2">4</font></td>
  </tr>
  <tr>
    <td WIDTH="80%" bgcolor="#E6E6E6"><font size="2">SPECIAL NOTE REGARDING FORWARD-LOOKING
    STATEMENTS</font></td>
    <td WIDTH="20%" align="center" bgcolor="#E6E6E6"><font size="2">12</font></td>
  </tr>
  <tr>
    <td WIDTH="80%"><font size="2">USE OF PROCEEDS</font></td>
    <td WIDTH="20%" align="center"><font size="2">13</font></td>
  </tr>
  <tr>
    <td WIDTH="80%" bgcolor="#E6E6E6"><font size="2">MARKET PRICE OF AND DIVIDENDS ON FOR COMMON
    EQUITY</font></td>
    <td WIDTH="20%" align="center" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="80%" bgcolor="#E6E6E6"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; AND RELATED
    STOCKHOLDER MATTERS</font></td>
    <td WIDTH="20%" align="center" bgcolor="#E6E6E6"><font size="2">13</font></td>
  </tr>
  <tr>
    <td WIDTH="80%"><font size="2">MANAGEMENT'S DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION</font></td>
    <td WIDTH="20%" align="center">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="80%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; AND RESULTS OF
    OPERATION</font></td>
    <td WIDTH="20%" align="center"><font size="2">14</font></td>
  </tr>
  <tr>
    <td WIDTH="80%" bgcolor="#E6E6E6"><font size="2">BUSINESS</font></td>
    <td WIDTH="20%" align="center" bgcolor="#E6E6E6"><font size="2">21</font></td>
  </tr>
  <tr>
    <td WIDTH="80%"><font size="2">DIRECTORS AND EXECUTIVE OFFICERS</font></td>
    <td WIDTH="20%" align="center"><font size="2">24</font></td>
  </tr>
  <tr>
    <td WIDTH="80%" bgcolor="#E6E6E6"><font size="2">EXECUTIVE COMPENSATION</font></td>
    <td WIDTH="20%" align="center" bgcolor="#E6E6E6"><font size="2">28</font></td>
  </tr>
  <tr>
    <td WIDTH="80%"><font size="2">CERTAIN RELATIONSHIPS AND RELATED
    TRANSACTIONS</font></td>
    <td WIDTH="20%" align="center"><font size="2">28</font></td>
  </tr>
  <tr>
    <td WIDTH="80%" bgcolor="#E6E6E6"><font size="2">SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND
    MANAGEMENT</font></td>
    <td WIDTH="20%" align="center" bgcolor="#E6E6E6"><font size="2">30</font></td>
  </tr>
  <tr>
    <td WIDTH="80%"><font size="2">DESCRIPTION OF SECURITIES</font></td>
    <td WIDTH="20%" align="center"><font size="2">31</font></td>
  </tr>
  <tr>
    <td WIDTH="80%" bgcolor="#E6E6E6"><font size="2">SELLING SHAREHOLDER</font></td>
    <td WIDTH="20%" align="center" bgcolor="#E6E6E6"><font size="2">32</font></td>
  </tr>
  <tr>
    <td WIDTH="80%"><font size="2">SHARES ELIGIBLE FOR FUTURE SALE</font></td>
    <td WIDTH="20%" align="center"><font size="2">34</font></td>
  </tr>
  <tr>
    <td WIDTH="80%" bgcolor="#E6E6E6"><font size="2">PLAN OF DISTRIBUTION</font></td>
    <td WIDTH="20%" align="center" bgcolor="#E6E6E6"><font size="2">34</font></td>
  </tr>
  <tr>
    <td WIDTH="80%"><font size="2">INDEPENDENT PUBLIC ACCOUNTANTS</font></td>
    <td WIDTH="20%" align="center"><font size="2">35</font></td>
  </tr>
  <tr>
    <td WIDTH="80%" bgcolor="#E6E6E6"><font size="2">LEGAL MATTERS</font></td>
    <td WIDTH="20%" align="center" bgcolor="#E6E6E6"><font size="2">35</font></td>
  </tr>
  <tr>
    <td WIDTH="80%"><font size="2">EXPERTS</font></td>
    <td WIDTH="20%" align="center"><font size="2">36</font></td>
  </tr>
  <tr>
    <td WIDTH="80%" bgcolor="#E6E6E6"><font size="2">CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS</font></td>
    <td WIDTH="20%" align="center" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="80%" bgcolor="#E6E6E6"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; ON ACCOUNTING AND
    FINANCIAL DISCLOSURE</font></td>
    <td WIDTH="20%" align="center" bgcolor="#E6E6E6"><font size="2">36</font></td>
  </tr>
  <tr>
    <td WIDTH="80%"><font size="2">DISCLOSURE OF COMMISSION POSITION ON</font></td>
    <td WIDTH="20%" align="center">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="80%"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp; INDEMNIFICATION FOR
    SECURITIES ACT LIABILITIES</font></td>
    <td WIDTH="20%" align="center"><font size="2">36</font></td>
  </tr>
  <tr>
    <td WIDTH="80%" bgcolor="#E6E6E6"><font size="2">INTERESTS OF NAMED EXPERTS AND COUNSEL</font></td>
    <td WIDTH="20%" align="center" bgcolor="#E6E6E6"><font size="2">36</font></td>
  </tr>
  <tr>
    <td WIDTH="80%"><font size="2">WHERE YOU CAN FIND MORE INFORMATION</font></td>
    <td WIDTH="20%" align="center"><font size="2">37</font></td>
  </tr>
  <tr>
    <td WIDTH="80%" bgcolor="#E6E6E6"><font size="2">INDEX TO FINANCIAL STATEMENTS</font></td>
    <td WIDTH="20%" align="center" bgcolor="#E6E6E6"><font size="2">38</font></td>
  </tr>
  <tr>
    <td WIDTH="80%"><font size="2">PART II - INFORMATION NOT REQUIRED IN
    PROSPECTUS</font></td>
    <td WIDTH="20%" align="center"><font size="2">40</font></td>
  </tr>
  <tr>
    <td WIDTH="80%" bgcolor="#E6E6E6"><font size="2">RECENT SALES OF UNREGISTERED SECURITIES</font></td>
    <td WIDTH="20%" align="center" bgcolor="#E6E6E6"><font size="2">41</font></td>
  </tr>
  <tr>
    <td WIDTH="80%"><font size="2">EXHIBITS</font></td>
    <td WIDTH="20%" align="center"><font size="2">41</font></td>
  </tr>
  <tr>
    <td WIDTH="80%" bgcolor="#E6E6E6"><font size="2">UNDERTAKINGS</font></td>
    <td WIDTH="20%" align="center" bgcolor="#E6E6E6"><font size="2">42</font></td>
  </tr>
  <tr>
    <td WIDTH="80%"><font size="2">SIGNATURES</font></td>
    <td WIDTH="20%" align="center"><font size="2">43</font></td>
  </tr>
</table>
</b></font><font FACE="Times New Roman PSMT" SIZE="2">
<p align="center">2 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font SIZE="2"><b>
<p align="center">PROSPECTUS SUMMARY </p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">This summary highlights selected
information about Wound Management Technologies, Inc. and the offering that is
contained in detail throughout this prospectus. You should read the entire
prospectus before making an investment decision, especially the information
presented under the heading &quot;Risk Factors&quot; and the financial statements and
related notes included elsewhere in this prospectus, as well as the other
documents to which we refer you. Except as otherwise indicated by the context,
references in this prospectus to &quot;we,&quot; &quot;us,&quot; &quot;our,&quot; or the &quot;company&quot; are to the
business of Wound Management Technologies, Inc. and its subsidiaries and do not
include the selling shareholder. </p>
</font><b><font SIZE="2">
<p>OUR BUSINESS </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Our current focus is developing and
marketing products for the advanced wound care market, as pursued through our
wholly-owned subsidiary, Wound Care Innovations, LLC, a Nevada limited liability
company. We hold the exclusive worldwide license to certain patented
technologies and processes related to an advanced collagen based wound care
product formulation, which we market under the brand name &quot;CellerateRx&#153;&quot;. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Our CellerateRx products are
currently marketed to and being used by wound care providers of all types. These
products are also approved for reimbursement under Medicare Part B and as a
consequence, the professional medical market is, and will remain the primary
focus of our marketing and sales efforts for the immediate future. </p>
</font><b><font SIZE="2">
<p>OUR CORPORATE INFORMATION </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">We were incorporated in 1982 as a
Colorado corporation under the name Twistee Freez Corporation. In 1996, we
changed our name to MB Software Corporation and in 2002, we were reincorporated
in the State of Texas. Effective May 27, 2008 we changed our name to Wound
Management Technologies, Inc. to better reflect our business operations.
References in this report to &quot;we&quot; or &quot;the Company&quot; refer to Wound Management
Technologies, Inc.. </p>
<p style="text-indent: 3%">Effective August 20, 2004, we acquired Wound Care
Innovations, LLC through a merger of Wound Care Innovations with a newly formed
Company subsidiary. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Prior to our acquisition of Wound
Care Innovations, Wound Care Innovations had obtained the distribution rights
for CellerateRx products for the domestic medical, retail, government and first
aid human use wound care markets, and certain non-exclusive rights for several
international markets. Effective November 2007, we obtained the exclusive
worldwide license to the patented technologies underlying our CellerateRx
products. CellerateRx&#153; is a trademark of Applied Nutritionals, Inc. </p>
</font><b><font SIZE="2">
<p>THE OFFERING </p>
</font></b>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="49%" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">Common stock
    offered by us</font></td>
    <td WIDTH="51%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">0
    shares</font></td>
  </tr>
  <tr>
    <td WIDTH="49%"><font FACE="Times New Roman PSMT" SIZE="2">Common stock
    offered by the selling shareholder</font></td>
    <td WIDTH="51%" align="right"><font FACE="Times New Roman PSMT" SIZE="2">
    3,993,104 shares</font></td>
  </tr>
  <tr>
    <td WIDTH="49%" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">Common stock to
    be outstanding after the offering</font></td>
    <td WIDTH="51%" align="right" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">
    27,034,447 shares</font></td>
  </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2">
<p align="center">2 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font SIZE="2">
<p>SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY">The following table provides our summary historical
consolidated financial data for the periods ended and as of the dates indicated.
The summary historical consolidated statement of operations data and summary
historical consolidated balance sheet data presented below for the years ended
December 31, 2006, and December 31, 2007, which have been derived from our
audited consolidated financial statements, and have been audited by Pritchett,
Siler &amp; Hardy, P.C., independent certified public accountants, and for the
quarters ended March 31, 2007, and March 31, 2008, which have been derived from
our unaudited consolidated financial statements. The historical results are not
necessarily indicative of the results to be expected in any future period. You
should read the summary consolidated historical financial data set forth below
in conjunction with &quot;Management&#146;s Discussion and Analysis of Financial Condition
and Plan or Operation&quot; and with our financial statements, including introductory
paragraphs, and the related notes appearing elsewhere in this prospectus. </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="32%">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="31%" COLSPAN="3" align="right"><font SIZE="2">As of and for the</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="32%">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="36%" COLSPAN="3" align="right"><font SIZE="2">
    <p align="center">(unaudited)</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="32%">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="40%" COLSPAN="3" align="center"><font SIZE="2">Quarter Ended
    March 31,</font></td>
    <td WIDTH="5%" align="center">&nbsp;</td>
    <td WIDTH="30%" align="center" colspan="3" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Year Ended December 30,</font></td>
  </tr>
  <tr>
    <td WIDTH="32%">&nbsp;</td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="5%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="13%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="32%">&nbsp;</td>
    <td WIDTH="4%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">2007</font></td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">2008</font></td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">2006</font></td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="13%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">2007</font></td>
  </tr>
  <tr>
    <td WIDTH="32%"><font SIZE="2">Summary of Operations Data:</font></td>
    <td WIDTH="4%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="5%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="5%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="5%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="13%" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="32%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 10">Total revenue</font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">83,941</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">63,270</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">189,755</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="13%" align="right" bgcolor="#E6E6E6"><font SIZE="2">630,505</font></td>
  </tr>
  <tr>
    <td WIDTH="32%"><font SIZE="2">
    <p style="margin-left: 10">(Loss) from operations</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">(145,160)</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">(356,568)</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">(487,885)</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right"><font SIZE="2">(405,737)</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 10">Net (loss)</font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(173,253)</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(353,233)</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(623,559)</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="13%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(542,756)</font></td>
  </tr>
  <tr>
    <td WIDTH="32%"><font SIZE="2">
    <p style="margin-left: 10">Net (loss) per common share:</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="32%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 10">Basic and Diluted</font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(0.01)</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(0.02)</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(0.04)</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="13%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(0.03)</font></td>
  </tr>
  <tr>
    <td WIDTH="32%"><font SIZE="2">
    <p style="margin-left: 10">Number of weighted-average</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="32%"><font SIZE="2">
    <p style="margin-left: 10">shares of common stock</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="32%"><font SIZE="2">
    <p style="margin-left: 10">outstanding:</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="32%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 20">Basic and Diluted</font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">16,141,343</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">16,844,585</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">16,141,343</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="13%" align="right" bgcolor="#E6E6E6"><font SIZE="2">16,141,343</font></td>
  </tr>
  <tr>
    <td WIDTH="32%"><font SIZE="2">Balance Sheet Data:</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right">&nbsp;</td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="32%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 10">Cash and cash equivalents</font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">781</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">406,327</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">236,301</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="13%" align="right" bgcolor="#E6E6E6"><font SIZE="2">781</font></td>
  </tr>
  <tr>
    <td WIDTH="32%"><font SIZE="2">
    <p style="margin-left: 10">Total assets</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">405,730</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">1,260,320</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">496,287</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right"><font SIZE="2">405,730</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 10">Long-term debt and capital leases</font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">-</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">-</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">-</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="13%" align="right" bgcolor="#E6E6E6"><font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="32%"><font SIZE="2">
    <p style="margin-left: 10">Total Liabilities</font></td>
    <td WIDTH="4%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">2,219,510</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">1,581,669</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">1,767,311</font></td>
    <td WIDTH="5%" align="right">&nbsp;</td>
    <td WIDTH="13%" align="right"><font SIZE="2">2,219,510</font></td>
  </tr>
  <tr>
    <td WIDTH="32%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 10">Stockholders&#146; (deficit) equity</font></td>
    <td WIDTH="4%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(1,813,780)</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(321,349)</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(1,271,024)</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="13%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(1,813,780)</font></td>
  </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2">
<p align="center">3</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font SIZE="2"><b>
<p align="center">RISK FACTORS </p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">An investment in our securities
involves a high degree of risk. You should carefully consider the following
risks and the other information set forth elsewhere in this Registration
Statement, including our financial statements and related notes, before you
decide to purchase shares of our common stock. If any of these risks occur, our
business, financial condition and results of operations could be adversely
affected. As a result, the trading price of our common stock could decline,
perhaps significantly, and you could lose part or all of your investment. </p>
</font><b><font SIZE="2">
<p>WE EXPECT TO INCUR LOSSES IN THE FUTURE AND MAY NOT ACHIEVE OR MAINTAIN
PROFITABILITY </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">We have incurred net losses since we
began our current operations in 2004. Our net loss was approximately $623,559
for our year ended December 31, 2006, approximately $542,756 for the year ended
December 31, 2007, and approximately $353,233 for our quarter ended March 31,
2008. We expect to make significant investments in our sales and marketing
programs and research and development, resulting in a substantial increase in
our operating expenses. Consequently, we will need to generate significant
additional revenue to achieve and maintain profitability in the future. We may
not be able to generate sufficient revenue from sales of our products and
related professional services to become profitable. Even if we do achieve
profitability, we may not sustain or increase profitability on a quarterly or
annual basis. In addition to funding operations through increased revenue, we
anticipate that we will need to raise additional capital before reaching
profitability. We cannot predict when we will operate profitably, if at all. If
we fail to achieve or maintain profitability, our stock price may decline. </p>
</font><b><font SIZE="2">
<p>WE HAVE A LIMITED OPERATING HISTORY WITH WHICH YOU CAN EVALUATE OUR CURRENT
BUSINESS MODEL AND PROSPECTS </p>
</font></b><font size="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">We acquired Wound Care Innovations in
August of 2004 and we have not been profitable to date. Although we have seen
our sales increase in the four and a half years since the acquisition, we cannot
predict if and when we may become profitable. Even if we become profitable in
the future, we cannot accurately predict the level of, or our ability to sustain
profitability. Because we have not yet been profitable and cannot predict any
level of future profitability, you bear the risk of a complete loss of your
investment in the event our business plan is unsuccessful. </p>
</font><font FACE="Wingdings" LANG="JA" SIZE="3">
<blockquote>
  <ul>
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">Because our
    products are still at a relatively early stage of commercialization, it is
    difficult for us to forecast the full level of market acceptance that our
    solution will attain; <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p ALIGN="JUSTIFY" style="margin-top: 0; margin-bottom: 0"></font>
    <font SIZE="2">competitors may develop products that render our products
    obsolete or noncompetitive or that shorten the life cycles of our products.
    Although we have had initial success, the market may not continue to accept
    our wound care products; <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">we may not
    be able to attract and retain a broad customer base; and <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font size="2">we may not
    be able to negotiate and maintain favorable strategic relationships. </li>
  </ul>
</blockquote>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Failure to successfully manage these
risks could harm our business and cause our stock price to fall. Furthermore, to
remain competitive, we will need to add to our current product line, and we may
not succeed in creating and marketing new products. A decline in demand for, or
in the average price of, our wound care products would have a direct negative
effect on our business and could cause our stock price to fall. </p>
<p align="center">4 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font SIZE="2">
<p>OUR PRODUCTS ARE MANUFACTURED ONLY BY APPLIED NUTRITIONALS </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Applied Nutritionals holds the patent
to, and is currently the sole source of the products we offer for sale. Our
growth and ability to meet customer demands depends in part on our ability to
obtain timely deliveries of product from our manufacturer. We may in the future
experience a shortage of product as a result of manufacturing process issues or
capacity problems at our supplier, or strong demand for the ingredients
constituting our products. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">If shortages or delays persist, the
cost to manufacture our products may increase, or may not be available at all,
and we may also encounter shortages if we do not accurately anticipate our
needs. We may not be able to secure enough product at reasonable prices or of
acceptable quality to meet our or our customer&#146;s needs. Accordingly, our
revenues could suffer and our costs could increase until other sources can be
developed. There can be no assurance that we will not encounter these problems
in the future. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The fact that we do not own our
manufacturing facilities could have an adverse impact on the supply of our
products and on operating results. While we will have the ability to manufacture
these products in the event that Applied Nutritionals is not able to fulfill our
product orders, in such event, we may temporarily be prevented from marketing
and selling our products until we were able to locate a substitute manufacturer.
</p>
</font><b><font SIZE="2">
<p>THE MARKETS IN WHICH WE COMPETE ARE INTENSELY COMPETITIVE, WHICH COULD
ADVERSELY AFFECT OUR REVENUE GROWTH </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">The market for wound care products is
intensely competitive. Competition in the wound care market is heavy among a
vast array of medical devices, drugs, and therapies. Many of our existing and
potential competitors have better brand recognition, longer operating histories,
larger customer bases and are very well capitalized and will continue to compete
aggressively. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Most companies providing wound care
products are able to offer customers multiple products. By doing so, they
effectively offset the cost of customer acquisition and support across several
revenue sources. With only one product line, our costs are relatively much
higher and may prevent us from achieving strong profitability. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Further, although our wound care
products have performed well in customer evaluations, we are a relatively
unknown entity with a relatively unknown brand in a market significantly
controlled by much larger products companies. We may not, even with strong
customer accounts, be able to establish the credibility necessary to secure
large national customers. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Our competitors may be able to keep
us out of some distribution channels, close us out from some larger accounts
with &quot;Master Contracts&quot; for full product lines, and create market awareness that
hinders our abilities to secure key accounts in a cost effective way. Increased
competition could significantly reduce our future revenue and increase our
operating losses due to price reductions, lower gross margins or lost market
share, which could harm our business and cause our stock price to decline. </p>
</font><b><font SIZE="2">
<p>PRODUCT LIABILITY EXPOSURE </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">We face an inherent risk of exposure
to product liability claims in the event that the use of any product we sell
results in injury. Such claims may include, among others, that these products
contain contaminants or include inadequate instructions as to use or inadequate
warnings concerning side effects and interactions with other substances. We do
not have, and do not anticipate obtaining, contractual indemnification from
parties supplying raw materials or marketing the products we sell. In any event,
any such indemnification if obtained would be limited by our terms and, as a
practical matter, to the creditworthiness of the indemnifying party. In the
event that we do not have adequate insurance or contractual indemnification,
product liabilities relating to defective products could have a material adverse
effect on our operations and financial condition. </p>
<p align="center">5 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font SIZE="2">
<p>FEDERAL REGULATIONS AND CHANGES IN REIMBURSEMENT POLICIES </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Our CellerateRx products are
currently classified by the FDA as Class I medical devices, and are further
classified as dressings and are cleared for marketing for the following
indications: pressure ulcers, diabetic ulcers, surgical wounds, ulcers due to
arterial insufficiency, traumatic wounds, 1<sup>st</sup> and 2<sup>nd</sup>
degree burns, and superficial wounds. Because our products are classified by the
FDA as medical devices and not drugs, we were not required to pursue stringent
clinical trials. Many physicians and larger, sophisticated healthcare provider
organizations, however, often require clinical studies demonstrating specific
performance capabilities of any new products. We do not have results from
controlled clinical studies and the lack of such studies could adversely affect
our ability to obtain large institutional customers. Further, if the FDA were to
change its policies regarding the classification or marketing of our products
for any reason, we would likely be required to conduct and submit data to
satisfy additional requirements. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Healthcare services are heavily
reliant upon health insurance reimbursement. Although many current insurance
plans place much of the financial risk on providers of care (allowing them to
choose whatever products/therapies are most cost effective) under capitated or
prospective payment structures, much of our business is related to
Medicare-eligible populations. Although our products are currently eligible for
reimbursement under Medicare Part B, adjustments to our reimbursement amounts or
a change in Medicare&#146;s reimbursement policies could have an adverse effect on
our ability to pursue market opportunities. </p>
</font><b><font SIZE="2">
<p>IF WE CANNOT MEET OUR FUTURE CAPITAL REQUIREMENTS, OUR BUSINESS WILL SUFFER
</p>
</font></b><font size="2">
<p style="text-indent: 3%">We will need additional financing to continue
operating our business. We need to raise additional funds in the future through
public or private debt or equity financings in order to: </p>
</font><font FACE="Wingdings" LANG="JA" SIZE="3">
<blockquote>
  <ul>
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">fund
    operating losses; <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">scale sales
    and marketing to address the market for wound care products; <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">take
    advantage of opportunities, including more rapid expansion or acquisitions
    of complementary products or businesses; <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font size="2">hire, train
    and retain employees; <br>
&nbsp;</font></li>
    <li>
    <p style="margin-top: 0; margin-bottom: 0"><font size="2">develop new
    products; or <br>
&nbsp;</font></li>
    <li>
    <p style="margin-top: 0; margin-bottom: 0"><font size="2">respond to
    economic and competitive pressures. </li>
  </ul>
</blockquote>
<p ALIGN="JUSTIFY" style="text-indent: 3%">If our capital needs are met through
the issuance of equity or convertible debt securities, the percentage ownership
of our stockholders will be reduced. Our future success may be determined in
large part by our ability to obtain additional financing, and we can give no
assurance that we will be successful in obtaining adequate financing on
favorable terms, if at all. If adequate funds are not available or are not
available on acceptable terms, our operating results and financial condition may
suffer, and our stock price may decline. </p>
<p align="center">6 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font SIZE="2">
<p>OUR OPERATING RESULTS MAY FLUCTUATE, WHICH MAY ADVERSELY AFFECT OUR STOCK
PRICE </p>
</font></b><font size="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">We are an emerging company. As such,
our quarterly revenue and results of operations are difficult to predict. We
have experienced fluctuations in revenue and operating results from
quarter-to-quarter and anticipate that these fluctuations will continue until
the company reaches critical mass and the market becomes more stable. These
fluctuations are due to a variety of factors, some of which are outside of our
control, including: </p>
</font><font FACE="Wingdings" LANG="JA" SIZE="3">
<blockquote>
  <ul>
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">the fact
    that we are a relatively young company with relatively young products; <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">our ability
    to attract new customers and retain existing customers; <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">the length
    and variability of our sales cycle, which makes it difficult to forecast the
    quarter in which our sales will occur; <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">the amount
    and timing of operating expense relating to the expansion of our business
    and operations; <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">the
    development of new wound care products or product enhancements by us or our
    competitors; <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p ALIGN="JUSTIFY" style="margin-top: 0; margin-bottom: 0"></font>
    <font SIZE="2">actual events, circumstances, outcomes, and amounts differing
    from judgments, assumptions, and estimates used in determining the values of
    certain assets (including the amounts of related valuation allowances),
    liabilities, and other items reflected in our financial statements; and <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font size="2">how well we
    execute on our strategy and operating plans. </li>
  </ul>
</blockquote>
<p ALIGN="JUSTIFY" style="text-indent: 3%">As a consequence, operating results
for a particular future period are difficult to predict, and, therefore, prior
results are not necessarily indicative of results to be expected in future
periods. Any of the foregoing factors, or any other factors discussed elsewhere
herein, could have a material adverse affect on our business, results of
operations, and financial condition that could adversely affect our stock price.
</p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">We also typically realize a
significant portion of our revenue in the last few weeks of a quarter because of
our customers' purchasing patterns. As a result, we are subject to significant
variations in license revenue and results of operations if we incur a delay in a
large customer's order. If we fail to close one or more significant license
agreements that we have targeted to close in a given quarter, this failure could
seriously harm our operating results for that quarter. Failure to meet or exceed
the expectation of securities analysts or investors due to any of these or other
factors may cause our stock price to fall. </p>
</font><b><font SIZE="2">
<p>OUR REVENUES FOR A PARTICULAR PERIOD ARE DIFFICULT TO PREDICT, AND A
SHORTFALL IN REVENUES MAY HARM OUR OPERATING RESULTS </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">As a result of a variety of factors
discussed in this report, our revenues for a particular quarter are difficult to
predict. Our net sales may grow at a slower rate than we anticipate, or may
decline. We plan our operating expense levels based primarily on forecasted
revenue levels. These expenses and the impact of long-term commitments are
relatively fixed in the short term. A shortfall in revenue could lead to
operating results being below expectations as we may not be able to quickly
reduce these fixed expenses in response to short term business changes. </p>
<p align="center">7 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font SIZE="2">
<p>DISRUPTION OF, OR CHANGES IN, OUR DISTRIBUTION MODEL OR CUSTOMER BASE COULD
HARM OUR SALES AND MARGINS </p>
</font></b><font size="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">If we fail to manage the distribution
of our products properly, or if the financial condition or operations of our
reseller channels weaken, our revenues and gross margins could be adversely
affected. Furthermore, a change in the mix of our customers between service
provider and enterprise, or a change in the mix of direct and indirect sales,
could adversely affect our revenues and gross margins. </p>
<p style="text-indent: 3%">Several factors could also result in disruption of or
changes in our distribution model or customer base, which could harm our sales
and margins, including the following: </p>
</font><font FACE="Wingdings" LANG="JA" SIZE="3">
<blockquote>
  <ul>
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">in some
    instances, we compete with some of our resellers through our direct sales,
    which may lead these channel partners to use other suppliers that do not
    directly sell their own products; <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">some of our
    resellers may have insufficient financial resources and may not be able to
    withstand changes in business conditions; </li>
  </ul>
</blockquote>
</font><b><font SIZE="2">
<p>OUR PROPRIETARY RIGHTS MAY PROVE DIFFICULT TO ENFORCE </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">We generally rely on patents,
copyrights, trademarks, and trade secret laws to establish and maintain
proprietary rights in our technology and products. While we have the exclusive
license underlying our collagen based CellerateRx products, there can be no
assurance that these patents or our other proprietary rights will not be
challenged, invalidated, or circumvented or that our rights will in fact provide
competitive advantages to us. In addition, the laws of some foreign countries
may not protect our proprietary rights to the same extent, as do the laws of the
United States. The outcome of any actions taken in these foreign countries may
be different than if such actions were determined under the laws of the United
States. If we are unable to protect our proprietary rights (including aspects of
products protected other than by patent rights) in a market, we may find
ourselves at a competitive disadvantage to others who need not incur the
substantial expense, time, and effort required to create the innovative products
that have enabled us to be successful. </p>
</font><b><font SIZE="2">
<p>WE MAY BE FOUND TO INFRINGE ON INTELLECTUAL PROPERTY RIGHTS OF OTHERS </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Third parties, including customers,
may in the future assert claims or initiate litigation related to exclusive
patent, copyright, trademark, and other intellectual property rights to
technologies and related standards that are relevant to us. These assertions may
emerge over time as a result of our growth and the general increase in the pace
of patent claims assertions, particularly in the United States. Because of the
existence of a large number of patents in the healthcare field, the secrecy of
some pending patents, and the rapid rate of issuance of new patents, it is not
economically practical or even possible to determine in advance whether a
product or any of its components infringes or will infringe the patent rights of
others. The asserted claims and/or initiated litigation can include claims
against us or our manufacturers, suppliers, or customers, alleging infringement
of their proprietary rights with respect to our existing or future products or
components of those products. Regardless of the merit of these claims, they can
be time-consuming, result in costly litigation and diversion of technical and
management personnel, or require us to develop a non-infringing technology or
enter into license agreements. Where claims are made by customers, resistance
even to unmeritorious claims could damage customer relationships. There can be
no assurance that licenses will be available on acceptable terms and conditions,
if at all, or that our indemnification by our suppliers will be adequate to
cover our costs if a claim were brought directly against us or our customers.
Furthermore, because of the potential for high court awards that are not
necessarily predictable, it is not unusual to find even arguably unmeritorious
claims settled for significant amounts. If any infringement or other
intellectual property claim made against us by any third party is successful, or
if we fail to develop non-infringing technology or license the proprietary
rights on commercially reasonable terms and conditions, our business, operating
results, and financial condition could be materially and adversely affected. </p>
<p align="center">8 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font SIZE="2">
<p>FAILURE TO RETAIN AND RECRUIT KEY PERSONNEL WOULD HARM OUR ABILITY TO MEET
KEY OBJECTIVES </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Our success will depend in large part
on our ability to attract and retain skilled executive, managerial, sales, and
marketing personnel. Competition for these personnel is intense in the market
today. Volatility or lack of positive performance in our stock price may also
adversely affect our ability to attract and retain key employees. The loss of
services of any of our key personnel, the inability to retain and attract
qualified personnel in the future, or delays in hiring required personnel,
particularly executive management, engineering and sales personnel, could make
it difficult to meet key objectives, such as timely and effective product
introductions. </p>
</font><b><font SIZE="2">
<p>OUR STOCK PRICE MAY CONTINUE TO BE VOLATILE </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Significant variations in our
quarterly operating results may adversely affect the market price of our common
stock. Our operating results have varied on a quarterly basis during our
operating history, and we expect to experience significant fluctuations in
future quarterly operating results. These fluctuations have been and may in the
future be caused by numerous factors, many of which are outside of our control.
We believe that period-to-period comparisons of our results of operations will
not necessarily be meaningful and that you should not rely upon them as an
indication of future performance. Also, it is likely that our operating results
could be below the expectations of public market analysts and investors. This
could adversely affect the market price of our common stock. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">In addition, the stock market has
experienced extreme price and volume fluctuations that have affected the market
price of many small companies, in particular, and that have often been unrelated
to the operating performance of these companies. These factors, as well as
general economic and political conditions, may materially adversely affect the
market price of our common stock in the future. Additionally, volatility or a
lack of positive performance in our stock price may adversely affect our ability
to retain key employees, some of whom we anticipate compensating in part based
on the performance of our stock price. </p>
</font><b><font SIZE="2">
<p>FAILURE TO MANAGE OUR PLANNED GROWTH COULD HARM OUR BUSINESS </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Our ability to successfully market
and sell our wound care products and implement our business plan requires an
effective plan for managing our future growth. We plan to increase the scope of
our operations at a rapid rate. Future expansion efforts will be expensive and
may strain our managerial and other resources. To manage future growth
effectively, we must maintain and enhance our financial and accounting systems
and controls, integrate new personnel and manage expanded operations. If we do
not manage growth properly, it could harm our operating results and financial
condition and cause our stock price to fall. </p>
</font><b><font SIZE="2">
<p ALIGN="JUSTIFY">A FEW OF OUR EXISTING SHAREHOLDERS OWN A LARGE PERCENTAGE OF
OUR VOTING STOCK AND WILL HAVE A SIGNIFICANT INFLUENCE OVER MATTERS REQUIRING
STOCKHOLDER APPROVAL AND COULD DELAY OR PREVENT A CHANGE IN CONTROL </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">You may lack an effective vote on
corporate matters and management may be able to act contrary to your objectives.
Our officers and board members own approximately 54.0% of the 24,327,550 shares
of our common stock outstanding. If management votes together, it will influence
the outcome of corporate actions requiring shareholder approval, including the
election of directors, mergers and asset sales. As a result, new stockholders
may lack an effective vote with respect to the election of directors and other
corporate matters. Therefore, it is possible that management may take actions
with respect to its ownership interest, which may not be consistent with your
objectives or desires. For example, our officers, directors and principal
stockholders could delay or prevent an acquisition or merger even if the
transaction would benefit other stockholders. In addition, this significant
concentration of share ownership may adversely affect the trading price for our
common stock because investors often perceive disadvantages in owning stock in
companies with controlling stockholders. Please see &quot;Principal Stockholders&quot; for
a more detailed description of our share ownership. </p>
<p align="center">9 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font SIZE="2">
<p>LIQUIDITY OF OUR COMMON STOCK </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Although there is a public market for
our common stock, trading volume has been historically low which substantially
increases your risk of loss. We can give no assurance that an active and liquid
public market for the shares of the common stock will develop in the future. Low
trading volume in our common stock could affect your ability to sell the shares
of common stock. The development of a public trading market depends upon not
only the existence of willing buyers and sellers, but also on market makers. The
market bid and asked prices for the shares may be significantly influenced by
decisions of the market makers to buy or sell the shares for their own account,
which may be critical for the establishment and maintenance of a liquid public
market in the shares. Market makers are not required to maintain a continuous
two-sided market and are free to withdraw firm quotations at any time.
Additionally, in order to maintain our eligibility for quotation on the OTC
Bulletin Board, we need to have at least one registered and active market maker.
No assurance can be given that any market making activities of any additional
market makers will commence or that the activities of current market makers will
be continued. </p>
</font><b><font SIZE="2">
<p>SALES OF OUR COMMON STOCK IN THE PUBLIC MARKET MAY LOWER OUR STOCK PRICE AND
IMPAIR OUR ABILITY TO RAISE FUNDS IN FUTURE OFFERINGS </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Future sales of large amounts of
common stock could adversely affect the market price of our common stock and our
ability to raise capital. Substantially all of the outstanding shares of our
common stock are freely tradable, without restriction or registration under the
Securities Act, other than the sales volume restrictions of Rule 144 applicable
to shares held beneficially by persons who may be deemed to be affiliates. The
price of our common stock could also drop as a result of the exercise of options
for common stock or the perception that such sales or exercise of options could
occur. These factors also could make it more difficult for us to raise funds
through future offerings of our common stock. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">As of June 2, 2008, there were
24,357,550 shares of common stock issued and 24,327,550 outstanding. In
addition, we have issued convertible notes, which if held to maturity will
convert into 1,206,897 shares of common stock, and warrants representing
1,500,000 shares of common stock are currently outstanding. </p>
</font><b><font SIZE="2">
<p>OUR ARTICLES AND BYLAWS MAY DELAY OR PREVENT A POTENTIAL TAKEOVER OF US </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Our Articles of Incorporation, as
amended, and Bylaws, as amended, contain provisions that may have the effect of
delaying, deterring or preventing a potential takeover of us, even if the
takeover is in the best interest of our stockholders. The Bylaws limit when
stockholders may call a special meeting of stockholders. The Articles also allow
the Board of Directors to fill vacancies, including newly created directorships.
</p>
<p align="center">10 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font SIZE="2">
<p>NO DIVIDEND PAYMENTS </p>
</font></b><font size="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">We have not paid and do not currently
intend to pay dividends, which may limit the current return you may receive on
your investment in our common stock. Future dividends on our common stock, if
any, will depend on our future earnings, capital requirements, financial
condition and other factors. We currently intend to retain earnings, if any, to
increase our net worth and reserves. Therefore, we do not anticipate that any
holder of common stock will receive any cash, stock or other dividends on our
shares of common stock at any time in the near future. You should not expect or
rely on the potential payment of dividends as a source of current income. </p>
<b>
<p>&quot;P</b></font><b><font SIZE="2">ENNY STOCK&quot; LIMITATIONS </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Our common stock currently trades on
the OTC Bulletin Board. Since our common stock continues to trade below $5.00
per share, our common stock is considered a &quot;penny stock&quot; and is subject to SEC
rules and regulations, which impose limitations upon the manner in which our
shares can be publicly traded. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">These regulations require the
delivery, prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock market and the associated risks. Under these
regulations, certain brokers who recommend such securities to persons other than
established customers or certain accredited investors must make a special
written suitability determination regarding such a purchaser and receive such
purchaser's written agreement to a transaction prior to sale. These regulations
have the effect of limiting the trading activity of our common stock and
reducing the liquidity of an investment in our common stock. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Stockholders should be aware that,
according to the Securities and Exchange Commission Release No. 34- 29093, the
market for penny stocks has suffered in recent years from patterns of fraud and
abuse. These patterns include: </p>
<p style="text-indent: 3%">Control of the market for the security by one or a
few broker-dealers that are often related to the promoter or issuer; </p>
<p style="text-indent: 3%">Manipulation of prices through prearranged matching
of purchases and sales and false and misleading press releases; </p>
<p style="text-indent: 3%">&quot;Boiler room&quot; practices involving high pressure sales
tactics and unrealistic price projections by inexperienced sales persons; </p>
<p style="text-indent: 3%" align="justify">Excessive and undisclosed bid-ask
differentials and markups by selling broker-dealers; and </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The wholesale dumping of the same
securities by promoters and broker-dealers after prices have been manipulated to
a desired level, along with the inevitable collapse of those prices with
consequent investor losses. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Furthermore, the &quot;penny stock&quot;
designation may adversely affect the development of any public market for the
Company&#146;s shares of common stock or, if such a market develops, its
continuation. Broker-dealers are required to personally determine whether an
investment in &quot;penny stock&quot; is suitable for customers. </p>
<p style="text-indent: 3%" align="justify">Penny stocks are securities (i) with
a price of less than five dollars per share; (ii) that are not traded on a
&quot;recognized&quot; national exchange; (iii) whose prices are not quoted on the NASDAQ
automated <font FACE="Times New Roman PSMT" size="2">quotation system
(NASDAQ-listed stocks must still meet requirement (i) above); or (iv) of an
issuer with net tangible assets less than $2,000,000 (if the issuer has been in
continuous operation for at least three years) or $5,000,000 (if in continuous
operation for less than three years), or with average annual revenues of less
than $6,000,000 for the last three years. </p>
</font>
<p align="center">11 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font FACE="Times New Roman PSMT" size="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Section 15(g) of the Exchange Act and
Rule 15g-2 of the Commission require broker-dealers dealing in penny stocks to
provide potential investors with a document disclosing the risks of penny stocks
and to obtain a manually signed and dated written receipt of the document before
effecting any transaction in a penny stock for the investor's account. Potential
investors in the Company&#146;s common stock are urged to obtain and read such
disclosure carefully before purchasing any shares that are deemed to be &quot;penny
stock.&quot; </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Rule 15g-9 of the Commission requires
broker-dealers in penny stocks to approve the account of any investor for
transactions in such stocks before selling any penny stock to that investor.
This procedure requires the broker-dealer to (i) obtain from the investor
information concerning his or her financial situation, investment experience and
investment objectives; (ii) reasonably determine, based on that information,
that transactions in penny stocks are suitable for the investor and that the
investor has sufficient knowledge and experience as to be reasonably capable of
evaluating the risks of penny stock transactions; (iii) provide the investor
with a written statement setting forth the basis on which the broker-dealer made
the determination in (ii) above; and (iv) receive a signed and dated copy of
such statement from the investor, confirming that it accurately reflects the
investor's financial situation, investment experience and investment objectives.
Compliance with these requirements may make it more difficult for the Company&#146;s
stockholders to resell their shares to third parties or to otherwise dispose of
them. </p>
</font><font FACE="Times New Roman PS" SIZE="2"><b>
<p align="center">SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS </p>
</b></font><font FACE="Times New Roman PSMT" SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">This prospectus contains
forward-looking statements that involve risks and uncertainties. These
statements relate to future events or our future financial performance.</font><font FACE="Times New Roman PS" SIZE="2"><b>
</b></font><font FACE="Times New Roman PSMT" size="2">In some cases, you can
identify forward-looking statements by terminology such as &quot;may,&quot; &quot;will,&quot;
&quot;could,&quot; &quot;expect,&quot; &quot;plan,&quot; &quot;intend,&quot; &quot;anticipate,&quot; &quot;believe,&quot; &quot;estimate,&quot;
&quot;predict,&quot; &quot;potential,&quot; or &quot;continue,&quot; or the negative of such terms or other
comparable terminology. These statements are only predictions. Actual events or
results may differ materially. In evaluating these statements, you should
specifically consider various factors, including the risks outlined in the &quot;Risk
Factors&quot; section above. These factors may cause our actual results to differ
materially from any forward-looking statement. Readers are urged to carefully
review and consider the various disclosures we make in this prospectus and in
our other reports filed with the Securities and Exchange Commission. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">We undertake no obligation to update
or revise forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes in the future operating results
over time. Our management believes its assumptions are based upon reasonable
data derived from and known about our business and operations. No assurances are
made that our actual results of operations or the results of our future
activities will not differ materially from these assumptions. </p>
<p align="center">12 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font SIZE="2"><b>
<p align="center">USE OF PROCEEDS </p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Company will not receive any of
the proceeds from the sale of the shares of common stock offered by the selling
shareholder. The Company will, however, receive proceeds from the exercise of
the warrants described in this prospectus, if and when these warrants are
exercised. We could raise an additional $1,750,000 if all of the warrants
described in this Prospectus are exercised. These warrants also contain an
automatic exercise feature that is triggered if the volume weighted average
market price of our common stock is equal to or greater than $3.00 per share for
a period of 20 consecutive days and if there is an effective registration
statement for the shares underlying the warrants. We can give no assurance that
any or all of these warrants or options will ever be exercised. </p>
<b>
<p align="center">MARKET PRICE OF AND DIVIDENDS ON FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS </p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Company's common stock is quoted
on the Over the Counter Bulletin Board, a service maintained by the National
Association of Securities Dealer, Inc. under the symbol &quot;MBSB&quot;. Trading in the
common stock in the over-the-counter market has been limited and sporadic and
the quotations set forth below are not necessarily indicative of actual market
conditions. Further, these prices reflect inter-dealer prices without retail
mark-up, mark-down, or commission, and may not necessarily reflect actual
transactions. </p>
<p style="text-indent: 3%">The high and low sales prices are as follows for the
periods indicated: </p>
<div align="center">
  <center>
  <table CELLSPACING="0" BORDER="0" WIDTH="65%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
    <tr>
      <td WIDTH="17%" style="border-left: 1px solid #000000; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
      <p style="margin-left: 5"><font size="2">YEAR</font></td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
      <p style="margin-left: 5"><font size="2">QUARTER ENDING</font></td>
      <td WIDTH="27%" style="border-left: 1px solid #000000; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
      <p style="margin-left: 5"><font size="2">HIGH</font></td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
      <p style="margin-left: 5"><font size="2">LOW</font></td>
    </tr>
    <tr>
      <td WIDTH="17%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">2006</font></td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <p style="margin-left: 5">&nbsp;</td>
      <td WIDTH="27%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <p style="margin-left: 5">&nbsp;</td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1">
      <p style="margin-left: 5">&nbsp;</td>
    </tr>
    <tr>
      <td WIDTH="17%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <p style="margin-left: 5">&nbsp;</td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">June 30, 2006</font></td>
      <td WIDTH="27%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">$0.45</font></td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">$0.10</font></td>
    </tr>
    <tr>
      <td WIDTH="17%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <p style="margin-left: 5">&nbsp;</td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">September 30, 2006</font></td>
      <td WIDTH="27%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">$0.20</font></td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">$0.10</font></td>
    </tr>
    <tr>
      <td WIDTH="17%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <p style="margin-left: 5">&nbsp;</td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">December 31, 2006</font></td>
      <td WIDTH="27%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">$0.10</font></td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">$0.05</font></td>
    </tr>
    <tr>
      <td WIDTH="17%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">2007</font></td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">March 31, 2007</font></td>
      <td WIDTH="27%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">$0.45</font></td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">$0.05</font></td>
    </tr>
    <tr>
      <td WIDTH="17%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <p style="margin-left: 5">&nbsp;</td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">June 30, 2007</font></td>
      <td WIDTH="27%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">$0.30</font></td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">$0.06</font></td>
    </tr>
    <tr>
      <td WIDTH="17%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <p style="margin-left: 5">&nbsp;</td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">September 30, 2007</font></td>
      <td WIDTH="27%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">$0.35</font></td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">$0.10</font></td>
    </tr>
    <tr>
      <td WIDTH="17%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <p style="margin-left: 5">&nbsp;</td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">December 31, 2007</font></td>
      <td WIDTH="27%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">$1.10</font></td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">$0.32</font></td>
    </tr>
    <tr>
      <td WIDTH="17%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">2008</font></td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">March 31, 2008</font></td>
      <td WIDTH="27%" style="border-left: 1px solid #000000; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">$1.00</font></td>
      <td WIDTH="28%" style="border-left: 1px solid #000000; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1">
      <font size="2">
      <p style="margin-left: 5">$2.10</font></td>
    </tr>
  </table>
  </center>
</div>
</font><b><font SIZE="2">
<p>RECORD HOLDERS </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">As of June 2, 2008, there were
approximately 2,000 shareholders of record holding a total of 24,357,550 shares
of common stock. The holders of the common stock are entitled to one vote for
each share held of record on all matters submitted to a vote of stockholders.
Holders of the common stock have no preemptive rights and no right to convert
their common stock into any other securities. There are no redemption or sinking
fund provisions applicable to the common stock. </p>
<p align="center">13 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font SIZE="2">
<p>DIVIDENDS </p>
</font></b><font size="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Company has not declared any cash
dividends since inception and does not anticipate paying any dividends in the
foreseeable future. The payment of dividends is within the discretion of the
board of directors and will depend on the Company's earnings, capital
requirements, financial condition, and other relevant factors. There are no
restrictions that currently limit the Company's ability to pay dividends on its
common stock other than those generally imposed by applicable state law. The
Company has determined that it will utilize any earnings in the expansion of its
business. </p>
<b>
<p align="center">MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION </p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The following discussion and analysis
of our financial condition and results of operations should be read in
conjunction with our consolidated financial statements and related notes that
appear in this document. In addition to historical consolidated financial
information, the following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward-looking statements. Factors that
could cause or contribute to these differences include those discussed below and
elsewhere in this memorandum, particularly in &quot;Risk Factors.&quot; </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Because of our dependence upon
consumer perceptions, adverse publicity associated with illness or other adverse
effects resulting from the use of our products or any similar products
distributed by other companies could have a material adverse effect on our
operations. Such adverse publicity could arise even if the adverse effects
associated with such products resulted from consumers' failure to consume such
products as directed. In addition, we may not be able to counter the effects of
negative publicity concerning the efficacy of our products. Any such occurrence
could have a negative effect on our operations. </p>
<dir>
  <p>Other key factors that affect our operating results are: </p>
  </font><font FACE="Wingdings" LANG="JA" SIZE="3">
</dir>
<blockquote>
  <ul>
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">Overall
    customer demand and acceptance for our various products. <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">Volume of
    products ordered and the prices at which we sell our products. <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">Our ability
    to manage our cost structure for capital expenditures and operating expenses
    such as salaries and benefits, freight and royalties. <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">Our ability
    to match operating costs to shifting volume levels. <br>
&nbsp;</font></li>
    <li>
    <p style="margin-top: 0; margin-bottom: 0"><font SIZE="2">Increases in the
    cost of raw materials and other supplies. <br>
&nbsp;</font></li>
    <li>
    <p style="margin-top: 0; margin-bottom: 0"><font SIZE="2">The impact of
    competitive products. Limitations on future financing. <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">Increases
    in the cost of borrowings and unavailability of debt or equity capital. <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">Our
    inability to gain and/or hold market share. <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font size="2">Exposure to
    and expense of resolving and defending product liability claims and other
    litigation. </li>
  </ul>
</blockquote>
<p align="center">14 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font FACE="Wingdings" LANG="JA" SIZE="3">
<blockquote>
  <ul>
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">Managing
    and maintaining growth. <br>
&nbsp;</li>
    </font><font FACE="Wingdings" LANG="JA" SIZE="3">
    <li>
    <p style="margin-top: 0; margin-bottom: 0"></font><font SIZE="2">The success
    of product development and new product introductions into the marketplace.
    The departure of key members of management. Our ability to efficiently
    manufacture our products. Unexpected customer bankruptcy. </li>
  </ul>
</blockquote>
</font><b><font SIZE="2">
<p>CAUTION CONCERNING FORWARD-LOOKING STATEMENTS/RISK FACTORS </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">The following discussion should be
read in conjunction with the financial statements and the notes thereto and the
other financial information appearing elsewhere in this document. In addition to
historical information, the following discussion and other parts of this
document contain certain forward-looking information. When used in this
discussion, the words &quot;believes,&quot; &quot;anticipates,&quot; &quot;expects,&quot; and similar
expressions are intended to identify forward-looking statements. Such statements
are subject to certain risks and uncertainties, which could cause actual results
to differ materially from those projected due to a number of factors beyond our
control. We do not undertake to publicly update or revise any of our
forward-looking statements even if experience or future changes show that the
indicated results or events will not be realized. You are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date hereof. You are also urged to carefully review and consider our discussions
regarding the various factors that affect our business, included in this section
and elsewhere in this report. </p>
</font><b><font SIZE="2">
<p>OVERVIEW AND PLAN OF OPERATION </font>
<font FACE="Times New Roman PS" SIZE="3"></p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Our current focus is developing and
marketing products for the advanced wound care market, as pursued through our
wholly-owned subsidiary, Wound Care Innovations, LLC, a Nevada limited liability
company. We hold the exclusive worldwide license to certain patented
technologies and processes related to an advanced collagen based wound care
product formulation, which we market under the brand name &quot;CellerateRx&#153;&quot;. These
products are FDA cleared for marketing for the following indications: pressure
ulcers, diabetic ulcers, surgical wounds, ulcers due to arterial insufficiency,
traumatic wounds, 1<sup>st</sup> and 2<sup>nd</sup> degree burns, and
superficial wounds. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Our CellerateRx products are
currently marketed to and being used by wound care providers of all types. These
products are also approved for reimbursement under Medicare Part B and as a
consequence, the professional medical market is, and will remain the primary
focus of our marketing and sales efforts for the immediate future. We believe
that these products are unique in composition, applicability, clinical
performance, and demonstrate the ability to reduce costs associated with
standard wound management. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">We currently have limited business
operations, maintaining leased offices in Fort Worth, Texas and Fort Lauderdale,
Florida. All of our major business functions are performed by our subsidiary,
Wound Care Innovations, LLC. Although Wound Care Innovations is a product
distributor, it is also responsible for product packaging development, packaging
materials, and coordination of all processes except the actual manufacturing of
the product. Wound Care Innovations also conducts other activities that are
typical of a product distributor, including sales, marketing, customer service,
and customer support. All of these activities are run and managed out of Wound
Care Innovations&#146; Fort Lauderdale offices. </p>
<p style="text-indent: 3%">Manufacturing of our products is conducted by Applied
Nutritionals. CellerateRx is a trademark of Applied Nutritionals, LLC.
Warehousing, shipping, and physical inventory management is outsourced to </p>
<p align="center">15 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p>Diamond Contract Manufacturing of Rochester, NY. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Our sales and marketing activities to
date have been limited and have resulted in a nominal revenue stream. Through
these activities, we have, however, secured product evaluations with a number of
key accounts. These accounts are regional and national healthcare provider
organizations that represent strong recurring revenue opportunities for the
Company. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">We currently intend to secure capital
resources for expansion of staff, inventories, marketing efforts, and research
and development; however we may be unsuccessful in our efforts to secure such
capital. If we are successful in raising capital, we anticipate hiring a number
of management, marketing, and clinical staffs to secure additional accounts,
market to the broader US wound care market, support customers in specific
geographies, broaden our clinical/educational programs, and evaluate retail and
international market opportunities. </p>
</font><b><font SIZE="2">
<p>CRITICAL ACCOUNTING POLICIES </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Our consolidated financial statements
are prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these consolidated financial statements
requires us to make estimates and assumptions that affect the reported amounts
of assets, liabilities, revenues, costs and expenses, and related disclosures.
On an ongoing basis, we evaluate our estimates and assumptions. Our actual
results may differ from these estimates under different assumptions or
conditions. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">We believe that of our significant
accounting policies, which are described in the notes to our consolidated
financial statements, the following accounting policies involve a greater degree
of judgment and complexity. Accordingly, these are the policies we believe are
the most critical to aid in fully understanding and evaluating our consolidated
financial condition and results of operations. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%"><u>Inventories</u>. Inventories are
stated at the lower of cost or net realizable value, with cost computed on a
first-in, first-out basis. Inventories consist of powders, gels and the related
packaging supplies. The Company has recorded an allowance for obsolete and slow
moving inventory of $7,260 at December 31, 2007. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%"><u>Stock-based compensation</u>. The
Company adopted SFAS No. 123 (revised 2004), &quot;Share-Based Payment&quot; (&quot;SFAS
123(R)&quot;), on January 1, 2006, which requires the measurement and recognition of
compensation expense for all share-based awards made to employees and directors,
including employee stock options and shares issued through its employee stock
purchase plan, based on estimated fair values. Prior to the adoption of SFAS
123(R), the Company accounted for stock-based compensation using the intrinsic
value method prescribed in Accounting Principles Board (&quot;APB&quot;) Opinion No. 25,
&quot;Accounting for Stock Issued to Employees.&quot; Under the intrinsic value method
that was used to account for stock-based awards prior to January 1, 2006, which
had been allowed under the original provisions of SFAS 123, compensation expense
is recorded on the date of grant if the current market price of the underlying
stock exceeded the exercise price. Any compensation expense is recorded on a
straight-line basis over the vesting period of the grant. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Effective January 1, 2006, The
Company adopted the fair value recognition provisions of SFAS 123(R) using the
modified prospective application method. Under this transition method,
compensation expense recognized will include the applicable amounts of: (a)
compensation expense of all stock-based payments granted prior to, but not yet
vested as of January 1, 2006, and (b) compensation expense for all stock-based
payments granted subsequent to January 1, 2006. Results for periods prior to
January 1, 2006, have not been restated. The adoption of this new standard had
no impact to the Company's financial position, results of operations or cash
flows as the Company's previous stock-based compensation awards expired prior to
January 1, 2006, and there have been no grants during the current year. Based on
the Company's evaluation of the adoption of the new standard, however, the
Company believes that it could have a significant impact to the Company's
financial position and overall results of operations depending on the number of
stock options granted in a given year. </p>
<p align="center">16 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font SIZE="2">
<p>RESULTS OF OPERATIONS </p>
</font></b><font SIZE="2">
<p>Year ended December 31, 2007 Compared to Year ended December 31, 2006 </p>
<i>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Revenues</i>. The Company generated
revenues for the year ended December 31, 2007 of $630,505 compared to revenues
of $189,755 for the year ended December 31, 2006, or a 233% increase in
revenues. </p>
<i>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Cost of revenues and gross margin</i>.
Costs of revenues for the year ended December 31, 2007 were $223,184 resulting
in a gross profit margin of $407,321, compared to cost of revenues for the year
ended December 31, 2006 of $193,057 and gross loss margin of $3,302. Our margins
continue to be small, but our client base is growing and we believe that the
product is gaining traction in the wound care field. </p>
<i>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Selling, general and administrative
expenses (&quot;SGA&quot;)</i>. SGA consists primarily of wages, facility-related expenses
such as rent and utilities, and outside professional services such as legal and
professional fees incurred in connection with our SEC reporting requirements.
SGA for 2007 were $813,058 compared to $484,583 for fiscal 2006, or an increase
of approximately 68%. We expect SGA to increase in the future as we continue to
expand our marketing efforts and the number of products we offer and as our
business continues to grow and the costs associated with being a public company
continue to increase as a result of increased reporting requirements, including
but not limited to the Sarbanes-Oxley Act of 2002. </p>
<p>Three months ended March 31, 2008 Compared to three months ended March 31,
2007 </p>
<i>
<p style="text-indent: 3%">Revenues</i>. The Company generated revenues for the
three months ended March 31, 2008 of $63,270 (2007: $83,941), a decrease of
approximately 25% from the same period in 2007. </p>
<i>
<p style="text-indent: 3%">Cost of revenues and gross margin</i>. Costs of
revenues for 2008 were $148,236 (2007: $26,999) resulting in a gross
margin/(loss) of ($84,966) (2007: $56,942). </p>
<i>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Selling, general and administrative
expenses (&quot;SGA&quot;)</i>. SGA for 2008 were $271,602 (2007: $202,102) consisting
primarily of wages, enhanced product promotions, facility-related expenses, and
outside professional services such as legal and professional fees incurred in
connection with our SEC reporting requirements. We expect selling, general and
administrative expenses to increase as we continue to expand our marketing
efforts and the number of products we offer. </p>
</font><b><font SIZE="2">
<p>LIQUIDITY AND CAPITAL RESOURCES </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Company currently has limited
resources to maintain its current operations, secure more inventories, and meet
its contractual obligations. Additional capital must be raised through equity or
debt offerings. If we are unable to obtain additional capital, we will be unable
to operate our business. During 2006, certain related parties advanced us
approximately $153,000 for working capital purposes. We also secured a
short-term loan of $500,000, due March 31, 2007. We generated a net loss of
$623,559 and our cash position at December 31, 2006 was $236,301. During 2007
our short term borrowings increased by $230,197. During 2007, we generated a
loss of $542,756 and our cash position at March 31, 2008 was $406,327. </p>
<p align="center">17 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p style="text-indent: 3%">Effective January 1, 2008, $1,495,664 of Company debt
was cancelled in exchange for 490.196 shares of our Series A Convertible
Preferred stock. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Effective January 11, 2008, we
received $50,000 from the sale and issuance of 86,207 shares of our common stock
and warrants to purchase common stock, and an additional $700,000 from the sale
and issuance of a convertible promissory note. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Without realization of additional
capital or significant revenues from operations, it would be unlikely for the
Company to continue as a going concern. The consolidated financial statements
have been prepared on a going concern basis, which contemplates realization of
assets and liquidation of liabilities in the ordinary course of business. The
Company has continuously incurred losses from operations and has a significant
accumulated deficit. The appropriateness of using the going concern basis is
dependent upon the Company's ability to obtain additional financing or equity
capital and, ultimately, to achieve profitable operations. These conditions
raise substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty and should not be regarded as typical for normal
operating periods. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">It is the Company's belief that it
will continue to incur nominal losses for at least the next twelve months, and
as a result will require additional funds from debt or equity investments to
meet such needs. The Company anticipates that its officers and shareholders will
contribute sufficient funds to satisfy the cash needs of the Company for the
next twelve months. However, there can be no assurances to that effect, as the
Company has insignificant revenues and the Company's need for capital may change
dramatically if it is successful in acquiring a new business. If the Company
cannot obtain needed funds, it may be forced to curtail or cease its activities.
Our future funding requirements will depend on numerous factors, some of which
are beyond the Company's control. These factors include our ability to operate
profitably, recruit and train management and personnel, and to compete with
other, better-capitalized and more established competitors. To meet these
objectives, management's plans are to (i) raise capital by obtaining financing
through private placement efforts, (ii) issue common stock for services rendered
in lieu of cash payments and (iii) obtain loans from officers and shareholders
as necessary. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Company does not anticipate
incurring significant research and development costs, the purchase of any major
equipment, or any significant changes in the number of its employees over the
next twelve months. </p>
</font><b><font SIZE="2">
<p>GOING CONCERN </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Company has continuously incurred
losses from operations and has a significant accumulated deficit. The
appropriateness of using the going concern basis is dependent upon the Company's
ability to obtain additional financing or equity capital and, ultimately, to
achieve profitable operations. These conditions raise substantial doubt about
its ability to continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
</p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">It is the Company&#146;s belief that it
will continue to incur nominal losses for at least the next twelve months, and
as a result will require additional funds from debt or equity investments to
meet such needs. Without realization of additional capital, it would be unlikely
for the Company to continue as a going concern. The Company anticipates that its
officers and shareholders will contribute sufficient funds to satisfy the cash
needs of the Company for the next twelve months. However, there can be no
assurances to that effect, as the Company has insignificant revenues and the
Company&#146;s need for capital may change dramatically if it is successful in
acquiring a new business. If the Company cannot obtain needed funds, it may be
forced to curtail or cease its activities. To meet these objectives,
management&#146;s plans are to (i) raise capital by obtaining financing through
private placement efforts; (ii) issue common stock for services rendered in lieu
of cash payments and (iii) obtain loans from officers and shareholders as
necessary. </p>
<p align="center">18 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Company&#146;s future ability to
achieve these objectives cannot be determined at this time. The accompanying
financial statements do not include any adjustments that might result from the
outcome of this uncertainty and should not be regarded as typical for normal
operating periods. </p>
</font><b><font SIZE="2">
<p>CONTRACTUAL OBLIGATIONS (COMMITMENTS AND CONTINGENCIES) </p>
<p>Operating leases </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Company leases office space and
office equipment under an operating lease expiring in various years through
2009. Rental expense charged to operations for the three months ended March 31,
2008, was approximately $12,400 (2007: $19,000). Minimum future rental payments
under non-cancelable operating leases having remaining terms in excess of 1 year
as of March 31, 2008, for each of the next two years and in the aggregate are as
follows (approximately): </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="50%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="69%" bgcolor="#E6E6E6"><font SIZE="2">2009</font></td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="22%" align="right" bgcolor="#E6E6E6"><font SIZE="2">39,000</font></td>
  </tr>
  <tr>
    <td WIDTH="69%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="22%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="69%"><font SIZE="2">2010</font></td>
    <td WIDTH="9%" align="right">&nbsp;</td>
    <td WIDTH="22%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="69%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="22%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="69%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="9%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="22%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">39,000</font></td>
  </tr>
</table>
<font SIZE="2"><b>
<p>Federal Payroll Taxes </p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Company is delinquent in the
payment of its payroll tax liabilities with the Internal Revenue Service. As of
March 31, 2008, unpaid payroll taxes total approximately $203,000. The Company
has estimated the related penalties and interest at approximately $123,000
computed through March 31, 2008, which are included in current liabilities at
March 31, 2008. The Company expects to pay these delinquent payroll tax
liabilities as soon as possible. The final amount due will be subject to the
statutes of limitations related to such liabilities and to negotiations with the
Internal Revenue Service. </p>
</font><b><font SIZE="2">
<p>INTELLECTUAL PROPERTY EXCLUSIVE LICENSING AGREEMENT </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Effective November 28, 2007, Wound
Care Innovations entered into separate exclusive license agreements with Applied
Nutritionals and its founder George Petito, pursuant to which Wound Care
Innovations obtained the exclusive world-wide license to certain patented
technologies and processes related to CellerateRx products. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Wound Care Innovations had been
marketing and selling CellerateRx for the three previous years under the terms
of a distribution agreement that had been terminated in 2005. The new licenses
are limited to the human health care market for external wound care, and include
any new product developments based on the licensed patent and processes. The
term of these licenses extends through the life of the licensed patent. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">In consideration for the licenses,
Wound Care Innovations agreed to pay to Applied Nutritionals and Mr. Petito the
following royalties, beginning January 3, 2008: (a) an advance royalty of
$100,000 in the aggregate, (b) an aggregate royalty of fifteen percent (15%) of
gross sales occurring during the first year of the license; (c) an additional
advance royalty of $400,000, in the aggregate, on January 3, 2009; plus (d) an
aggregate royalty of three percent (3%) of gross sales for all sales occurring
after the payment of the $400,000 advance royalty. In addition, after January 3,
2009, Wound Care Innovations must maintain a minimum aggregate annual royalty
payment of $375,000. </p>
<p align="center">19 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p ALIGN="JUSTIFY" style="text-indent: 3%">All royalties, other than the advance
royalty payments described above, are due and payable on a calendar quarterly
basis on or before the forty-fifth (45<sup>th</sup>) day immediately following
the calendar quarter in which gross sales are received. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">In connection with the above
transaction, the Company issued to Mr. Petito 1,000 shares of a newly designated
Series A Convertible Preferred Stock. Each share of Preferred Stock
automatically converted into 5,100 shares of Common Stock upon the filing, on
May 27, 2008, of an amendment to our Articles of Incorporation increasing our
authorized number of shares of common stock from 20,000,000 to 100,000,000. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">In addition to the license
agreements, Wound Care Innovations also entered into an exclusive manufacturing
agreement with Applied Nutritionals pursuant to which Applied Nutritionals will
manufacture all CellerateRx and related products for Wound Care Innovations. The
term of the manufacturing agreement extends through the life of the licensed
patent; but may be terminated by a successor in interest to Wound Care
Innovations, provided that the successor in interest has annual revenues of at
least $100,000,000 or a market capitalization of at least $200,000,000. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Prior to entering into the new
license agreements, Applied Nutritionals held 900,000 shares of our common
stock. These shares were issued to Applied Nutritionals in 2004, in connection
with the previous distribution agreement for CellerateRx products. As majority
member and manager of Applied Nutritionals, Mr. Petito may be deemed to be the
beneficial owner of these shares. </p>
</font><b><font SIZE="2">
<p>DESCRIPTION OF PROPERTY </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Company's principal executive
office is located at 777 Main Street, Fort Worth, Texas 76102. These offices
contain approximately 2,390 square feet and are leased for a 2 year term
expiring March 31, 2010. Rental on our executive offices is $3,784.00 per month.
Wound Care's principal office is located at 790 E Broward Blvd, Suite 300, Fort
Lauderdale, Florida 33301. These offices contain approximately 2,000 square feet
and are leased for a 5 year term expiring September 2009. Rental on Wound Care's
office is $4,130.77 per month. </p>
</font><b><font SIZE="2">
<p>LEGAL PROCEEDINGS </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">We are from time to time involved in
various legal proceedings incidental to the conduct of our business. We believe
that the outcome of all such pending legal proceedings will not in the aggregate
have a material adverse effect on our business, financial condition, results of
operations or liquidity. </p>
<p align="center">20 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font size="2">
<p align="center">BUSINESS </p>
<p>BUSINESS OVERVIEW </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Our current focus is developing and
marketing products for the advanced wound care market, as pursued through our
wholly-owned subsidiary, Wound Care Innovations. We hold the exclusive worldwide
license to certain patented technologies and processes related to an advanced
collagen based wound care product formulation, which we market under the brand
name &quot;CellerateRx&#153;&quot;. These products are FDA cleared for marketing for the
following indications: pressure ulcers, diabetic ulcers, surgical wounds, ulcers
due to arterial insufficiency, traumatic wounds, 1<sup>st</sup> and 2<sup>nd</sup>
degree burns, and superficial wounds. We believe that these products are unique
in composition, applicability, clinical performance, and demonstrate the ability
to reduce costs associated with standard wound management. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Our CellerateRx products are
currently marketed to and being used by wound care providers of all types. These
products are also approved for reimbursement under Medicare Part B and as a
consequence, the professional medical market is, and will remain the primary
focus of our marketing and sales efforts for the immediate future. We believe
that these products are unique in composition, applicability, clinical
performance, and demonstrate the ability to reduce costs associated with
standard wound management. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">We currently have limited business
operations, maintaining leased offices in Fort Worth, Texas and Fort Lauderdale,
Florida. All of our major business functions are performed by our subsidiary,
Wound Care Innovations, LLC. Although Wound Care Innovations is a product
distributor, it is also responsible for product packaging development, packaging
materials, and coordination of all processes except the actual manufacturing of
the product. Wound Care Innovations also conducts other activities that are
typical of a product distributor, including sales, marketing, customer service,
and customer support. All of these activities are run and managed out of Wound
Care Innovations&#146;s Fort Lauderdale offices. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Manufacturing of our products is
conducted by Applied Nutritionals. CellerateRx is a trademark of Applied
Nutritionals, LLC. Warehousing, shipping, and physical inventory management is
outsourced to Diamond Contract Manufacturing of Rochester, NY. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">We have been pre-marketing
CellerateRX products to select markets and have received positive user feedback
from many healthcare markets, including long term care facilities, wound care
centers, hospitals, homecare agencies, and durable medical equipment companies.
Through these activities, we have, however, secured product evaluations with a
number of key accounts. These accounts are regional and national healthcare
provider organizations that represent strong recurring revenue opportunities for
the Company. Our pre-marketing work is beginning to bear results that we believe
will generate additional revenues during 2008. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">We currently intend to secure capital
resources for expansion of staff, inventories, marketing efforts, and research
and development; however we may be unsuccessful in our efforts to secure such
capital. If we are successful in raising capital, we anticipate hiring a number
of management, marketing, and clinical staffs to secure additional accounts,
market to the broader US wound care market, support customers in specific
geographies, broaden our clinical/educational programs, and evaluate retail and
international market opportunities. </p>
</font><b><font SIZE="2">
<p>WOUND CARE INDUSTRY </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">The U.S. wound care market serves
between three to five million patients annually with wounds resulting from
diabetes, arterial insufficiency, pressure caused by immobility and other
causes. Advanced wound care technologies, a segment of the overall U.S. wound
care market, was approximately $2.6 billion in 2006, and is expected to reach
$4.6 billion by 2011, an average annual growth rate of approximately 12%.
According to BBC Research, wound care dressings, sealants, and anti-adhesion
products held approximately 59% of the advanced wound care technologies market
in 2006. By the end of 2011 this segment is expected to hold 55% of the total
U.S. market. </p>
<p align="center">21 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p ALIGN="JUSTIFY" style="text-indent: 3%">New technologies and an increasing
older population are two of the major driving forces behind the advanced wound
care market. There is growing appeal for the market due to the fast healing
benefits and reduced patient follow-ups. In addition, military wound care,
alternative wound care, future research, and upcoming technology represent
significant trends and growth for the changing wound care market. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Within the wound care products
market, there are two typical groups of products: drugs and devices. CellerateRx
products are currently classified by the FDA as Class I medical devices, and are
further classified as dressings. Although collagen has been used for a number of
years as a component of wound care dressings, we believe that the patented form
of collagen in CellerateRx products allows these dressings to have a more active
role in wound therapy than other currently available collagens based wound care
dressings. The dressing market in the United States is currently estimated to be
$2.5 billion per year. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The overall market for wound care
products in the U.S. consists of healthcare professionals and organizations that
provide care for those with wounds; durable medical equipment companies that
supply ambulatory patients with products; and product companies that market
drugs, devices, and methodologies to healthcare organizations and patients.
Presently, we focus on sales and marketing activities directed toward
professionals and organizations that will either resell CellerateRx products or
use them in the course of treating their patient&#146;s wounds. </p>
</font><b><font SIZE="2">
<p>GENERAL BUSINESS PLAN </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Our general business plan is to
introduce CellerateRx products to select national and regional healthcare
provider organizations, and focus on geographically-targeted marketing. Our
CellerateRx products are currently being used by a variety of wound care
providers, and are getting to market through a variety of distribution channels.
CellerateRx products are currently approved for reimbursement under Medicare
Part B. As a consequence, the professional medical market is, and will, remain
the primary focus of our marketing and sales efforts for the immediate future.
</p>
</font><b><font SIZE="2">
<p>PRODUCTS </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Currently, our products for the
professional healthcare market consist of CellerateRX in both gel and powder
form. Both products contain the patented form of collagen and may be used on a
variety of wounds, wound states, and phases. Although no clinical studies are
currently planned, we intend to conduct a number of clinical studies for the
purposes of quantifying the benefits of CellerateRX. We anticipate planning
study design and management in the near future. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Effective November 28, 2007, we
entered into separate exclusive license agreements with Applied Nutritionals and
its founder George Petito, pursuant to which Wound Care Innovations obtained the
exclusive worldwide license to certain patented technologies and processes
related to CellerateRx. Wound Care Innovations had been marketing and selling
CellerateRx during the previous three years under the terms of a distribution
agreement with Applied Nutritionals that was terminated in 2005. The new
licenses are limited to the human health care market for external wound care,
and include any new product developments based on the licensed patent and
processes. The term of these licenses extends through the life of the licensed
patent. </p>
<p align="center">22 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p ALIGN="JUSTIFY" style="text-indent: 3%">In consideration for the licenses,
Wound Care Innovations agreed to pay Applied Nutritionals and Mr. Petito the
following royalties, beginning January 3, 2008: (a) an advance royalty of
$100,000 in the aggregate, (b) an aggregate royalty of fifteen percent (15%) of
gross sales occurring during the first year of the license; (c) an additional
advance royalty of $400,000, in the aggregate, on January 3, 2009; plus (d) an
aggregate royalty of three percent (3%) of gross sales for all sales occurring
after the payment of the $400,000 advance royalty. In addition, after January 3,
2009, we must maintain a minimum aggregate annual royalty payment of $375,000.
</p>
</font><b><font SIZE="2">
<p>MARKETING, SALES, AND DISTRIBUTION </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Company anticipates building and
supporting a limited sales and marketing force directed toward securing key high
profile accounts, penetrating select geographic markets, and supporting the
efforts of our resellers and distributors. The wound care products market has a
variety of overlapping distribution channels, with many customers able to
procure products in multiple ways. With an intended limited internal sales
force, our goal is to market directly to large accounts and open distribution
channels preferred by those clients, as well as marketing through traditional
online, offline, trade show and local activities. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">We believe that the spectrum of use
of CellerateRx products allows us to market to a wide range of customers, and
will facilitate relationships with compatible product companies for potential
joint marketing activities. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Our packaging, inventory management,
and shipping activities are currently outsourced to Diamond Contract
Manufacturing, a non-affiliated entity who provides packaging, warehousing, and
fulfillment services from their Rochester, NY facilities. </p>
</font><b><font SIZE="2">
<p>PRODUCT PRODUCTION AND DEVELOPMENT </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">In addition to the license agreements
for the patented technologies and processes related to CellerateRx, Wound Care
Innovations also entered into an exclusive manufacturing agreement with Applied
Nutritionals pursuant to which Applied Nutritionals will manufacture all
CellerateRx and related products for us. The term of the manufacturing agreement
extends through the life of the licensed patent; but may be terminated by a
successor in interest, if such successor has, annual revenues of at least
$100,000,000 or a market capitalization of at least $200,000,000. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">We conduct our research and
development activities, in conjunction with Applied Nutritionals. Although our
efforts are currently focused on marketing and selling our current product
lines, we anticipate that we may develop derivative products, utilizing the
patented form of collagen, for other markets and applications. </p>
</font><b><font SIZE="2">
<p>EMPLOYEES </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">We currently have three employees in
Florida. In addition, we use administrative services provided by two employees
of an entity managed by Mr. Scott Haire, our Chairman, President and Chief
Executive Officer. </p>
</font><b><font SIZE="2">
<p>COMPETITION </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">The wound care market is served by a
number of large, multi-product line companies offering a suite of products to
the market. CellerateRx products compete with all primary dressings, some
prescription therapies (drugs), and other medical devices. Manufacturers and
distributors of competitive products include: Smith &amp; Nephew, Johnson &amp; Johnson,
Healthpoint, and Biocore. Many of our competitors are significantly larger that
we are and have more financial and personnel resources than we do. Consequently,
we will be at a competitive disadvantage in marketing and selling our products
into the marketplace. We believe, however, that the patented molecular form of
collagen we use in CellerateRx allows our products to outperform currently
available non-active dressings, reduce the cost of wound management, and replace
a variety of other products with a single primary dressing. </p>
<p align="center">23 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font SIZE="2"><b>
<p align="center">DIRECTORS AND EXECUTIVE OFFICERS </p>
</b>
<p style="text-indent: 3%">The following table sets forth certain information
regarding the directors and executive officers of the Company: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="23%">&nbsp;</td>
    <td WIDTH="10%" align="center">&nbsp;</td>
    <td WIDTH="32%" align="center">&nbsp;</td>
    <td WIDTH="33%" align="center"><font FACE="Times New Roman PSMT" SIZE="2">
    Year First</font></td>
  </tr>
  <tr>
    <td WIDTH="23%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman PSMT" SIZE="2">Name</font></td>
    <td WIDTH="10%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman PSMT" SIZE="2">Age</font></td>
    <td WIDTH="32%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman PSMT" SIZE="2">Position</font></td>
    <td WIDTH="33%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman PSMT" SIZE="2">Elected</font></td>
  </tr>
  <tr>
    <td WIDTH="23%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="10%" align="center" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="32%" align="center" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="33%" align="center" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="23%" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">Scott A. Haire</font></td>
    <td WIDTH="10%" align="center" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">43</font></td>
    <td WIDTH="32%" align="center" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">
    Chairman, Chief Executive</font></td>
    <td WIDTH="33%" align="center" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">
    1993</font></td>
  </tr>
  <tr>
    <td WIDTH="23%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="center" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="32%" align="center" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">
    Officer, President and Director</font></td>
    <td WIDTH="33%" align="center" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="23%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="center" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="32%" align="center" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="33%" align="center" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="23%"><font FACE="Times New Roman PSMT" SIZE="2">Gilbert A. Valdez</font></td>
    <td WIDTH="10%" align="center"><font FACE="Times New Roman PSMT" SIZE="2">64</font></td>
    <td WIDTH="32%" align="center"><font FACE="Times New Roman PSMT" SIZE="2">
    Director</font></td>
    <td WIDTH="33%" align="center"><font FACE="Times New Roman PSMT" SIZE="2">
    1996</font></td>
  </tr>
  <tr>
    <td WIDTH="23%">&nbsp;</td>
    <td WIDTH="10%" align="center">&nbsp;</td>
    <td WIDTH="32%" align="center">&nbsp;</td>
    <td WIDTH="33%" align="center">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="23%" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">Araldo A.
    Cossutta</font></td>
    <td WIDTH="10%" align="center" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">83</font></td>
    <td WIDTH="32%" align="center" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">
    Director</font></td>
    <td WIDTH="33%" align="center" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">
    1994</font></td>
  </tr>
  <tr>
    <td WIDTH="23%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="center" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="32%" align="center" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="33%" align="center" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="23%"><font FACE="Times New Roman PSMT" SIZE="2">Steven W. Evans</font></td>
    <td WIDTH="10%" align="center"><font FACE="Times New Roman PSMT" SIZE="2">57</font></td>
    <td WIDTH="32%" align="center"><font FACE="Times New Roman PSMT" SIZE="2">
    Director</font></td>
    <td WIDTH="33%" align="center"><font FACE="Times New Roman PSMT" SIZE="2">
    1994</font></td>
  </tr>
  <tr>
    <td WIDTH="23%">&nbsp;</td>
    <td WIDTH="10%" align="center">&nbsp;</td>
    <td WIDTH="32%" align="center">&nbsp;</td>
    <td WIDTH="33%" align="center">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="23%" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">Robert E. Gross</font></td>
    <td WIDTH="10%" align="center" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">63</font></td>
    <td WIDTH="32%" align="center" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">
    Director</font></td>
    <td WIDTH="33%" align="center" bgcolor="#E6E6E6"><font FACE="Times New Roman PSMT" SIZE="2">
    1994</font></td>
  </tr>
  <tr>
    <td WIDTH="23%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="center" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="32%" align="center" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="33%" align="center" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="23%"><font FACE="Times New Roman PSMT" SIZE="2">Thomas J.
    Kirchhofer</font></td>
    <td WIDTH="10%" align="center"><font FACE="Times New Roman PSMT" SIZE="2">67</font></td>
    <td WIDTH="32%" align="center"><font FACE="Times New Roman PSMT" SIZE="2">
    Director</font></td>
    <td WIDTH="33%" align="center"><font FACE="Times New Roman PSMT" SIZE="2">
    1994</font></td>
  </tr>
</table>
<font SIZE="2">
<p style="text-indent: 3%">Executive Officers of the Company are elected on an
annual basis and serve at the discretion of the Board of Directors. Directors of
the Company are elected on an annual basis. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Scott A. Haire is Chairman of the
Board, Chief Executive Officer and President of the Company. Prior to founding
Wound Management Technologies, Inc., he was an employee of the Company from
November 1993 to June 1994. Previously, Mr. Haire was president of Preferred
Payment Systems, a company specializing in electronic claims and insurance
system related projects. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Gilbert A. Valdez is Chief Operating
Officer of the Company and past President and CEO of four major financial and
healthcare corporations. Most recently, he served as CEO of Hospital Billing and
Collection Services, Inc., a $550 million healthcare receivables financing
entity located in Wilmington, Delaware; Datix Corporation, an Atlanta-based
corporate divestiture from Harris-Lanier; Medaphis Corporation, an interstate,
multi-dimensional healthcare service agency based in Atlanta; and NEIC, a
national consortium of 40 major insurance companies formed for development of
electronic claim billing standards. Mr. Valdez has 30 years of senior healthcare
receivables financing experience. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Araldo A. Cossutta is President of
Cossutta and Associates, an architectural firm based in New York City, with
major projects throughout the world. Previously, he was a partner with I.M. Pei
&amp; Partners and is a graduate of the Harvard Graduate School of Design and the
Ecole des Beaux Arts in Paris. Mr. Cossutta was a significant shareholder in
Personal Computer Card Corporation (&quot;PC3&quot;) and was chairman of PC3 at the time
of its acquisition by the Company in November 1993. He also was a large
shareholder and director of Computer Integration Corporation of Boca Raton,
Florida from 1993 to 2000. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Steven W. Evans is a Certified Public
Accountant with Evans Miller &amp; Warriner, PSC, an accounting firm which he
established in 1976 in Barbourville Kentucky. He is also a founder and active in
PTRL, which operates contract research laboratories located in Kentucky,
California and Germany. He is also a founder and active in the management of
environmental, financial and hotel corporations in Kentucky and Tennessee. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Robert E. Gross is President of R. E.
Gross &amp; Associates, providing consulting and systems projects for clients in the
multi-location service, banking and healthcare industries. From 1987 to 1990, he
was vice president-technical operations for Medaphis Physicians Service Corp.,
Atlanta, Georgia. Prior to that, he held executive positions with Chi-Chi's,
Inc., Royal Crown and TigerAir. He also spent 13 years as an engineer with IBM.
</p>
<p align="center">24</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p style="text-indent: 3%">Thomas J. Kirchhofer is president of Synergy Wellness
Centers of Georgia, Inc. He is past president of the Georgia Chiropractic
Association. </p>
</font><b><font SIZE="2">
<p>MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Our business is managed under the
direction of the Board of Directors. The Board of Directors meets on a regularly
scheduled basis to review significant developments affecting us and to act on
matters requiring approval of the Board of Directors. It also holds special
meetings when an important matter requires attention or action by the Board of
Directors between scheduled meetings. During fiscal 2007, the Board of Directors
did not meet, but acted by unanimous written consent 4 times. The Board of
Directors does not have a standing audit, compensation, nominating or governance
committee. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">All of our directors are independent,
as defined by Rule 4200(a)(15) of the Nasdaq&#146;s listing standards, except for Mr.
Haire, who is not independent because he is currently employed by the Company as
its Chief Executive Officer and Mr. Cossutta, who is not independent due to the
above described acquisition of Wound Care. </p>
<p><u>Audit Committee </u></p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Company does not maintain a
standing Audit Committee. An audit committee typically reviews, acts on and
reports to the board of directors with respect to various auditing and
accounting matters, including the recommendations and performance of independent
auditors, the scope of the annual audits, fees to be paid to the independent
auditors, and internal accounting and financial control policies and procedures.
Certain stock exchanges currently require companies to adopt a formal written
charter that establishes an audit committee that specifies the scope of an audit
committee&#146;s responsibilities and the means by which it carries out those
responsibilities. In order to be listed on any of these exchanges, the Company
will be required to establish an audit committee. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Company's board of directors does
not have an &quot;audit committee financial expert,&quot; within the meaning of such
phrase under applicable regulations of the Securities and Exchange Commission,
serving on its audit committee. The board of directors believes that all members
of its audit committee are financially literate and experienced in business
matters, and that one or more members of the audit committee are capable of (i)
understanding generally accepted accounting principles (&quot;GAAP&quot;) and financial
statements, (ii) assessing the general application of GAAP principles in
connection with our accounting for estimates, accruals and reserves, (iii)
analyzing and evaluating our financial statements, (iv) understanding our
internal controls and procedures for financial reporting; and (v) understanding
audit committee functions, all of which are attributes of an audit committee
financial expert. However, the board of directors believes that there is not any
audit committee member who has obtained these attributes through the experience
specified in the SEC's definition of &quot;audit committee financial expert.&quot;
Further, like many small companies, it is difficult for the Company to attract
and retain board members who qualify as &quot;audit committee financial experts,&quot; and
competition for these individuals is significant. The board believes that its
current audit committee is able to fulfill its role under SEC regulations
despite not having a designated &quot;audit committee financial expert.&quot; </font>
<font FACE="Times New Roman PS" SIZE="3"><b></p>
</b></font><font SIZE="2">
<p><u>Indebtedness of Directors and Executive Officers </u></p>
<p style="text-indent: 3%">None of our directors or officers or their respective
associates or affiliates is indebted to us. </p>
<p align="center">25</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p><u>Family Relationships </u></p>
<p style="text-indent: 3%">There are no family relationships among our directors
or executive officers. </p>
<p><u>Compensation Committee </u></p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Company does not maintain a
standing Compensation Committee. Due to the Company&#146;s small size at this point
in time, the Board of Directors has not established a separate compensation
committee. All members of the Board of Directors (with the exception of any
member about whom a particular compensation decision is being made) participate
in the compensation award process. During fiscal 2007, no executive officer
received any compensation from the Company. </p>
<p><u>Nominating Committee </u></p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Company does not maintain a
standing Nominating Committee and does not have a Nominating Committee charter.
Due to the Company&#146;s small size at this point in time, the Board of Directors
has not established a separate nominating committee and feels that all directors
should have input into nomination decisions. As such, all members of the Board
of Directors generally participate in the director nomination process. Under the
rules promulgated by the SEC, the Board of Directors is, therefore, treated as a
&quot;nominating committee&quot;. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Board of Directors will consider
qualified nominees recommended by shareholders. Shareholders desiring to make
such recommendations should submit such recommendations to the Corporate
Secretary, c/o Wound Management Technologies, Inc., 777 Main Street, Suite 3100,
Fort Worth, Texas 76102. The Board of Directors will evaluate candidates
properly proposed by shareholders in the same manner as all other candidates.
</p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">With respect to the nominations
process, the Board of Directors does not operate under a written charter, but
under resolutions adopted by the Board of Directors. The Board of Directors is
responsible for reviewing and interviewing qualified candidates to serve on the
Board of Directors, for making recommendations for nominations to fill vacancies
on the Board of Directors, and for selecting the nominees for selection by the
Company&#146;s shareholders at each annual meeting. The Board of Directors has not
established specific minimum age, education, experience or skill requirements
for potential directors. The Board of Directors takes into account all factors
they consider appropriate in fulfilling their responsibilities to identify and
recommend individuals as director nominees. Those factors may include, without
limitation, the following: </p>
<blockquote>
  <ul>
    <li>
    <p align="justify" style="margin-top: 0; margin-bottom: 0">an individual&#146;s
    business or professional experience, accomplishments, education, judgment,
    understanding of the business and the industry in which the Company
    operates, specific skills and talents, independence, time commitments,
    reputation, general business acumen and personal and professional integrity
    or character;<br>
&nbsp;</li>
    <li>
    <p align="justify" style="margin-top: 0; margin-bottom: 0">the size and
    composition of the Board of Directors and the interaction of its members, in
    each case with respect to the needs of the Company and its shareholders; and<br>
&nbsp;</li>
    <li>
    <p align="justify" style="margin-top: 0; margin-bottom: 0">regarding any
    individual who has served as a director of the Company, his or her past
    preparation for, attendance at, and participation in meetings and other
    activities of the Board of Directors or its committees and his or her
    overall contributions to the Board of Directors and the Company.</li>
  </ul>
</blockquote>
<p style="text-indent: 3%" align="justify">The Board of Directors may use
multiple sources for identifying and evaluating nominees for directors,
including referrals from the Company&#146;s current directors and management as well
as input from third parties, including executive search firms retained by the
Board of Directors. The Board of Directors will obtain background information
about candidates, which may include information from directors&#146; and officers&#146;
questionnaires and background and reference checks, and will then interview
qualified candidates. The Board of Directors will then determine, based on the
background information and the information obtained in the interviews, whether
to recommend that a candidate be nominated to the Board of Directors. We
strongly encourage and, from time to time actively survey, our shareholders to
recommend potential director candidates. </p>
<p align="center">26</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p><u>Shareholder Communications with the Company&#146;s Board of Directors </u></p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Any shareholder wishing to send
written communications to the Company&#146;s Board of Directors may do so by sending
them in care of Lucy Singleton, Corporate Secretary, at the Company&#146;s principal
executive offices. All such communications will be forwarded to the intended
recipient(s). </p>
</font><b><font SIZE="2">
<p>COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934 </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Section 16(a) of the Exchange Act
requires our officers and directors, and persons who own more than 10% of a
registered class of our equity securities, to file initial reports of ownership
and reports of changes in ownership with the SEC. Such persons are required by
SEC regulation to furnish us with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it and
representations from certain reporting persons regarding their compliance with
the relevant filing requirements, the Company believes that all filing
requirements applicable to its officers, directors and 10% shareholders were
complied with during the fiscal year ended December 31, 2007, with the exception
of one transaction effected by Mr. Cossutta, which was filed late. </p>
</font><b><font SIZE="2">
<p>CODE OF ETHICS </p>
</font></b><font SIZE="2">
<p style="text-indent: 3%">Due to the current formative stage of the Company&#146;s
development, it has not yet developed a written code of ethics for its directors
or executive officers. </p>
<p align="center">27</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font size="2">
<p align="center">EXECUTIVE COMPENSATION </p>
<p>SUMMARY COMPENSATION TABLE </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">No compensation in excess of $100,000
was awarded to, earned by, or paid to any executive officer of the Company
during the last three years. The following table and the accompanying notes
provide summary information for each of the last three fiscal years concerning
cash and non-cash compensation paid or accrued by the Company&#146;s Chief Executive
Officer over the past three years. </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111" height="217">
  <tr>
    <td WIDTH="11%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="21">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="21">&nbsp;</td>
    <td WIDTH="33%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" colspan="3" height="21">
    <font size="2">Annual Compensation</font></td>
    <td WIDTH="44%" align="center" style="border-style: solid; border-width: 1" colspan="4" height="21">
    <font size="2">Long Term Compensation</font></td>
  </tr>
  <tr>
    <td WIDTH="11%" style="border-left-style: solid; border-left-width: 1" height="15">
    </td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="15">
    </td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="16">
    </td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="16">
    </td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="16">
    </td>
    <td WIDTH="22%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" colspan="2" height="16">
    </td>
    <td WIDTH="22%" align="center" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1" height="16" colspan="2">
    </td>
  </tr>
  <tr>
    <td WIDTH="11%" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">&nbsp;</td>
    <td WIDTH="22%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20" colspan="2">
    <font size="2">Awards</font></td>
    <td WIDTH="22%" align="center" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20" colspan="2">
    <font size="2">Payouts</font></td>
  </tr>
  <tr>
    <td WIDTH="11%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="20">
    <p style="margin-left: 4">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="20">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="20">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="20">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="20">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="20">
    <font SIZE="2">Awards</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="20">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="20">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1" height="20">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="11%" style="border-left-style: solid; border-left-width: 1" height="19">
    <p style="margin-left: 4">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">
    <font SIZE="2">Other</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">
    <font SIZE="2">Restricted</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">
    <font SIZE="2">Securities</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="11%" style="border-left-style: solid; border-left-width: 1" height="19">
    <font SIZE="2">
    <p style="margin-left: 4">Name and</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">
    <font SIZE="2">Annual</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">
    <font SIZE="2">Stock</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">
    <font SIZE="2">Underlyin</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">
    <font SIZE="2">LTIP</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1" height="19">
    <font SIZE="2">All Other</font></td>
  </tr>
  <tr>
    <td WIDTH="11%" style="border-left-style: solid; border-left-width: 1" height="15">
    <font SIZE="2">
    <p style="margin-left: 4">Principal</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="15">
    <font SIZE="2">Year</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="15">
    <font SIZE="2">Salary</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="15">
    <font SIZE="2">Bonus</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="15">
    <font SIZE="2">Compens</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="15">
    <font SIZE="2">Award(s)</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="15">
    <font SIZE="2">g Options</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="15">
    <font SIZE="2">payout</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1" height="15">
    <font SIZE="2">Compensation</font></td>
  </tr>
  <tr>
    <td WIDTH="11%" style="border-left-style: solid; border-left-width: 1" height="19">
    <font SIZE="2">
    <p style="margin-left: 4">Position</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">
    <font SIZE="2">($)</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">
    <font SIZE="2">($)</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">
    <font SIZE="2">ation</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">
    <font SIZE="2">($)</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">
    <font SIZE="2">SARs(#)</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="19">
    <font SIZE="2">s</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="11%" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">
    <p style="margin-left: 4">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">
    <font SIZE="2">($)</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">
    <font SIZE="2">($)</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">
    <font SIZE="2">($)</font></td>
  </tr>
  <tr>
    <td WIDTH="11%" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="16">
    <font SIZE="2">
    <p style="margin-left: 4">Scott A.</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="16">
    <font SIZE="2">2007</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="16">
    <font SIZE="2">-0-</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="16">
    <font SIZE="2">-</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="16">
    <font SIZE="2">-</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="16">
    <font SIZE="2">-</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="16">
    <font SIZE="2">-</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-top-style: solid; border-top-width: 1" height="16">
    <font SIZE="2">-</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1" height="16">
    <font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="11%" style="border-left-style: solid; border-left-width: 1" height="15">
    <font SIZE="2">
    <p style="margin-left: 4">Haire</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="15">
    <font SIZE="2">2006</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="15">
    <font SIZE="2">-0-</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="15">
    <font SIZE="2">-</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="15">
    <font SIZE="2">-</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="15">
    <font SIZE="2">-</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="15">
    <font SIZE="2">-</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1" height="15">
    <font SIZE="2">-</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1" height="15">
    <font SIZE="2">-</font></td>
  </tr>
  <tr>
    <td WIDTH="11%" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">
    <p style="margin-left: 4">&nbsp;</td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">
    <font SIZE="2">2005</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">
    <font SIZE="2">-0-</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">
    <font SIZE="2">-</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">
    <font SIZE="2">-</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">
    <font SIZE="2">-</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">
    <font SIZE="2">-</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">
    <font SIZE="2">-</font></td>
    <td WIDTH="11%" align="center" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1" height="20">&nbsp;</td>
  </tr>
</table>
<b><font SIZE="2">
<p>EMPLOYMENT AGREEMENTS </p>
</font></b><font SIZE="2">
<p style="text-indent: 3%">None of our executive officers has an employment
agreement with the Company or any of its subsidiaries. </p>
</font><b><font SIZE="2">
<p>DIRECTOR COMPENSATION </p>
</font></b><font size="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">We do not pay our directors a fee for
attending scheduled and special meetings of our board of directors. We intend to
reimburse each director for reasonable travel expenses related to such
director&#146;s attendance at board of directors and committee meetings. In the
future we might have to offer some compensation to attract the caliber of
independent board members the Company is seeking. </p>
<b>
<p align="center">CERTAIN RELATIONSHIPS AND RELATED TRANACTIONS </p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Effective August 20, 2004, we
acquired Wound Care Innovations, LLC through a merger of Wound Care with a newly
formed Company subsidiary. The consideration paid by the Company for Wound Care
consisted of an aggregate of 6,000,000 shares of our common stock. These shares
were issued to H.E.B., LLC, a Nevada limited liability company, and to Mr.
Araldo Cossutta, the sole owners of Wound Care. Mr. Scott A. Haire, our Chairman
of the Board, Chief Executive Officer and President is a one-percent member, but
the managing member of HEB, and Mr. Cossutta is a member of our Board of
Directors. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">In connection with the acquisition of
Wound Care, HEB and Mr. Cossutta also agreed to convert an aggregate of
$1,800,612 of Wound Care&#146;s debt and other obligations owed to HEB and Mr.
Cossutta into an aggregate of 2,257,303 additional shares of our common stock.
</p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Effective November 28, 2007, Wound
Care Innovations entered into separate exclusive license agreements with Applied
Nutritionals and its founder George Petito, pursuant to which Wound Care
Innovations obtained the exclusive world-wide license to certain patented
technologies and processes related to CellerateRx products. </p>
<p align="center">28</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Wound Care Innovations had been
marketing and selling CellerateRx for the three previous years under the terms
of a distribution agreement that had been terminated in 2005. The new licenses
are limited to the human health care market for external wound care, and include
any new product developments based on the licensed patent and processes. The
term of these licenses extends through the life of the licensed patent. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">In consideration for the licenses,
Wound Care Innovations agreed to pay to Applied Nutritionals and Mr. Petito the
following royalties, beginning January 3, 2008: (a) an advance royalty of
$100,000 in the aggregate, (b) an aggregate royalty of fifteen percent (15%) of
gross sales occurring during the first year of the license; (c) an additional
advance royalty of $400,000, in the aggregate, on January 3, 2009; plus (d) an
aggregate royalty of three percent (3%) of gross sales for all sales occurring
after the payment of the $400,000 advance royalty. In addition, after January 3,
2009, Wound Care Innovations must maintain a minimum aggregate annual royalty
payment of $375,000. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">All royalties, other than the advance
royalty payments described above, are due and payable on a calendar quarterly
basis on or before the forty-fifth (45<sup>th</sup>) day immediately following
the calendar quarter in which gross sales are received. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">In addition to the license
agreements, Wound Care Innovations also entered into an exclusive manufacturing
agreement with Applied Nutritionals pursuant to which Applied Nutritionals will
manufacture all CellerateRx and related products for Wound Care Innovations. The
term of the manufacturing agreement extends through the life of the licensed
patent; but may be terminated by a successor in interest to Wound Care
Innovations, provided that the successor in interest has annual revenues of at
least $100,000,000 or a market capitalization of at least $200,000,000. </p>
<p style="text-indent: 3%">In connection with the above transaction, the Company
issued to Mr. Petito 1,000 shares of a newly designated Series A Convertible
Preferred Stock. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Prior to entering into the new
license agreements, Applied Nutritionals held 900,000 shares of our common
stock. These shares were issued to Applied Nutritionals in 2004, in connection
with the previous distribution agreement for CellerateRx products. As majority
member and manager of Applied Nutritionals, Mr. Petito may be deemed to be the
beneficial owner of these shares. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Effective January 1, 2008, we issued
490.196 shares of our Series A Convertible Preferred Stock to Keystone Equity
Partners in exchange for the cancellation of approximately $1,500,000 in debt.
The debt was recently acquired by Keystone from H.E.B., LLC, our majority
shareholder, and its affiliates. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The 1,490.196 shares of Series A
Convertible Preferred Stock described above, were automatically converted into
an aggregate of 7,600,000 shares of common stock on May 27, 2008, when we filed
an amendment to our Articles of Incorporation increasing our authorized number
of shares of common stock from 20,000,000 to 100,000,000. </p>
<p align="center">29</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font SIZE="2"><b>
<p align="center">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
</p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">As of June 2, 2008, there were
24,327,550 shares of common stock issued and outstanding. The following table
sets forth certain information concerning the ownership of the Company&#146;s common
stock as of June 2, 2008, with respect to: (a) each person known to the Company
to be the beneficial owner of more than five percent of the Company's common
stock; (b) all directors; and (c) directors and executive officers of the
Company as a group. The notes accompanying the information in the table below
are necessary for a complete understanding of the figures provided below. </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="24%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%"><font SIZE="2">Amount and Nature</font></td>
    <td WIDTH="25%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%"><font SIZE="2">Title</font></td>
    <td WIDTH="25%"><font SIZE="2">Name of Beneficial</font></td>
    <td WIDTH="25%"><font SIZE="2">of Beneficial</font></td>
    <td WIDTH="25%"><font SIZE="2">Percent</font></td>
  </tr>
  <tr>
    <td WIDTH="24%"><font SIZE="2">Class</font></td>
    <td WIDTH="25%"><font SIZE="2">Owner of Group<sup>1</sup></font></td>
    <td WIDTH="25%"><font SIZE="2">Ownership</font></td>
    <td WIDTH="25%"><font SIZE="2">of Class</font></td>
  </tr>
  <tr>
    <td WIDTH="24%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6"><font SIZE="2">Common</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">Scott A. Haire<sup>2</sup></font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">7,095,184</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">29.2%</font></td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">Chairman and</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">Chief Executive Officer</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%"><font SIZE="2">Common</font></td>
    <td WIDTH="25%"><font SIZE="2">Araldo A. Cossutta</font></td>
    <td WIDTH="25%"><font SIZE="2">5,015,000</font></td>
    <td WIDTH="25%"><font SIZE="2">20.6%</font></td>
  </tr>
  <tr>
    <td WIDTH="24%">&nbsp;</td>
    <td WIDTH="25%"><font SIZE="2">Director</font></td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6"><font SIZE="2">Common</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">Steven W. Evans</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">1,015,000</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">4.2%</font></td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">Director</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%"><font SIZE="2">Common</font></td>
    <td WIDTH="25%"><font SIZE="2">Thomas J. Kirchhofer</font></td>
    <td WIDTH="25%"><font SIZE="2">-</font></td>
    <td WIDTH="25%"><font SIZE="2">*</font></td>
  </tr>
  <tr>
    <td WIDTH="24%">&nbsp;</td>
    <td WIDTH="25%"><font SIZE="2">Director</font></td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6"><font SIZE="2">Common</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">Robert E. Gross</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">-</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">*</font></td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">Director</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%"><font SIZE="2">Common</font></td>
    <td WIDTH="25%"><font SIZE="2">Gilbert Valdez</font></td>
    <td WIDTH="25%"><font SIZE="2">1,666</font></td>
    <td WIDTH="25%"><font SIZE="2">*</font></td>
  </tr>
  <tr>
    <td WIDTH="24%">&nbsp;</td>
    <td WIDTH="25%"><font SIZE="2">Chief Operating Officer and Director</font></td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6"><font SIZE="2">Common</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">Applied Nutritionals, LLC</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">900,000</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">3.7%</font></td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">1890 Bucknell Drive</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">Bethleham, PA 18015</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%"><font SIZE="2">Common</font></td>
    <td WIDTH="25%"><font SIZE="2">George Petito</font></td>
    <td WIDTH="25%"><font SIZE="2">6,000, 000<sup>3</sup></font></td>
    <td WIDTH="25%"><font SIZE="2">24.7%</font></td>
  </tr>
  <tr>
    <td WIDTH="24%">&nbsp;</td>
    <td WIDTH="25%"><font SIZE="2">1890 Bucknell Drive</font></td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%">&nbsp;</td>
    <td WIDTH="25%"><font SIZE="2">Bethleham, PA 18015</font></td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6"><font SIZE="2">Common</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">Keystone Equity Partners</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">2,500,000</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">10.3%</font></td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">5125 Stephanie Drive</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">Ft. Worth, TX 76117</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%"><font SIZE="2">Common</font></td>
    <td WIDTH="25%"><font SIZE="2">T Squared Investments, LLC</font></td>
    <td WIDTH="25%"><font SIZE="2">1,253,470<sup>4</sup></font></td>
    <td WIDTH="25%"><font SIZE="2">4.9%</font></td>
  </tr>
  <tr>
    <td WIDTH="24%">&nbsp;</td>
    <td WIDTH="25%"><font SIZE="2">c/o T Squared Capital LLC</font></td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%">&nbsp;</td>
    <td WIDTH="25%"><font SIZE="2">1325 Sixth Avenue, Floor 28</font></td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%">&nbsp;</td>
    <td WIDTH="25%"><font SIZE="2">New York, New York 10019</font></td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
    <td WIDTH="25%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6"><font SIZE="2">Common</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">All Directors and Executive Officers</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">As a Group (six in number)</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">13,126,850</font></td>
    <td WIDTH="25%" bgcolor="#E6E6E6"><font SIZE="2">54.0%</font></td>
  </tr>
</table>
<font size="2">
<p align="center">30</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p>* less than 1% </p>
<p align="justify">(1) Unless otherwise noted, the address for each person or
entity listed is 777 Main Street, Suite 3100, Fort Worth, Texas 76102. </p>
<p align="justify">(2) 6,980,070 of these shares are held by H.E.B., LLC. Mr.
Haire is the managing member of H.E.B., LLC, and as such, is deemed to be the
beneficial owner of such shares. </p>
<p align="justify">(3) Consists of 900,000 shares held by Applied Nutritionals
and 5,100,000 shares of Common Stock. Mr. Petito is the majority member and the
manager of Applied Nutritionals and in such capacity, may be deemed to be the
beneficial owner of such shares. </p>
<p align="justify">(4) Consists of 86,207 shares, plus warrants, purchase
options and convertible notes. T Squared Investments, LLC currently holds
warrants issued by the Company for 1,500,000 shares of Common Stock, convertible
notes issued by the Company that are currently convertible into 1,206,897 shares
of Common Stock and a purchase option issued by H.E.B., LLC for 1,200,000 shares
of our Common Stock currently held by H.E.B., LLC, and notes. The warrants,
convertible notes and purchase option provide that T Squared Investments shall
not be entitled to exercise the warrants or purchase option, or convert the
notes into shares of Common Stock if such exercise or conversion would result in
T Squared and its affiliates having in beneficial ownership of more than 4.9% of
the then outstanding number of shares of Common Stock on such date. As a result
of this limitation, T Squared would only be able to exercise warrants or the
purchase option, or convert the notes for an aggregate of 1,167,263 shares
within 60 days. </p>
<b>
<p align="center">DESCRIPTION OF SECURITIES </p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The following description is a
summary of the material terms of our capital stock. This summary is subject to
and qualified in its entirety by our Articles of Incorporation, as amended, and
Bylaws as amended, and by the applicable provisions of Texas law. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Our authorized capital stock consists
of 100,000,000 shares of common stock, having a par value of $0.001 per share
and 5,000,000 shares of convertible preferred stock, having a par value of
$10.00 per share. </p>
</font><b><font SIZE="2">
<p>COMMON STOCK </font><font FACE="Times New Roman PS" SIZE="3"></p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Each outstanding share of common
stock entitles the holder thereof to one vote per share on all matters. Our
Articles of Incorporation do not permit cumulative voting for the election of
directors, which means that the holders of more than 50 percent of such
outstanding shares voting for the election of directors can elect all of the
directors to be elected, if they so choose; in such event, the holders of the
remaining shares will not be able to elect any of our directors. Stockholders do
not have preemptive rights to purchase shares in any future issuance of our
common stock. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The holders of shares of our common
stock are entitled to dividends out of funds legally available when and as
declared by our board of directors. Our board of directors has never<b> </b>
declared a dividend and does not anticipate declaring a dividend in the
foreseeable future. In the event of liquidation, dissolution or winding up of
the affairs of the company, holders are entitled to receive, ratably, the net
assets available to stockholders after payment of all creditors and of any
liquidation preference to the holders of the company&#146;s preferred shares. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">All of the issued and outstanding
shares of our common stock are duly authorized, validly issued, fully paid, and
non-assessable. To the extent that additional shares of our common stock are
issued, the relative interests of existing stockholders will be diluted. </p>
<p align="center">31</p>
</font>

<hr color="#000000" size="5"><p Style='page-break-before:always'><b><font SIZE="2">
<p>PREFERRED STOCK </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">The board of directors may, without
further action of our common stockholders, issue shares of preferred stock in
one or more series and fix or alter the rights and preferences thereof,
including the voting rights, redemption provisions (including sinking fund
provisions), dividend rights, dividend rates, liquidation preferences,
conversion rights and any other rights, preferences, privileges and restrictions
of any wholly un-issued series of preferred stock. The board of directors may,
without further action by our common stockholders, issue shares of preferred
stock that it has designated. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The rights of holders of common stock
will be subject to, and may be adversely affected by, the rights of holders of
preferred stock. While the issuance of preferred stock provides flexibility in
connection with additional financing, possible acquisitions and other corporate
purposes, future issuances may have the effect of delaying, deferring or
preventing the change of control in us without further action by the
stockholders and may discourage bids for the common stock at a premium over the
market price. The board of directors may, without stockholder approval, provide
for the issuance of preferred stock that could have voting, conversion or other
rights superior to the rights of holders of common stock. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The board of directors has classified
one series of preferred stock, Series A Convertible Preferred Stock (the &quot;Series
A Stock&quot;). Each share of Series A Stock is convertible into 5,100 shares of
common stock and was automatically converted upon the filing, on May 27, 2008 of
an amendment to our Articles of Incorporation increasing the number of
authorized shares of common stock from 20,000,000 to 100,000,000. At June 2,
2008, there were no shares of Series A Stock issued or outstanding. </p>
<b>
<p align="center">SELLING SHAREHOLDER </p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The following table sets forth the
name of the selling shareholder and for each selling shareholder, the number of
shares of common stock beneficially owned as of June 2, 2008, the number of
shares being registered, and the amount and percentage (if one percent or more)
of shares of common stock to be owned by each selling shareholder after the
offering is complete. All information with respect to share ownership has been
furnished by the selling shareholder. The shares being offered are being
registered to permit public secondary trading of the shares and the selling
shareholder may offer all or part of the shares owned for resale from time to
time. The selling shareholder is under no obligation, however, to sell any
shares immediately pursuant to this prospectus, nor is the selling shareholder
obligated to sell all or any portion of the shares at any time. Therefore, no
estimate can be given as to the number of shares of common stock that will be
sold pursuant to this prospectus or the number of shares that will be owned by
the selling shareholder upon termination of the offering made hereby. </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="24%" style="border-style: solid; border-width: 1"><font SIZE="2">
    Selling shareholder</font></td>
    <td WIDTH="12%" align="center" style="border-style: solid; border-width: 1">
    <font SIZE="2">Shares of Common Stock Issued</font></td>
    <td WIDTH="12%" align="center" style="border-style: solid; border-width: 1">
    <font SIZE="2">Shares of Common Stock to be&nbsp; issued upon the conversion
    of Notes</font></td>
    <td WIDTH="13%" align="center" style="border-style: solid; border-width: 1">
    <font SIZE="2">Shares of&nbsp; Common Stock to be issued upon the exercise
    of warrants and/or options</font></td>
    <td WIDTH="13%" align="center" style="border-style: solid; border-width: 1">
    <font SIZE="2">Total Shares of Common Stock to be registered </font></td>
    <td WIDTH="13%" align="center" style="border-style: solid; border-width: 1">
    <font SIZE="2">Shares of Common Stock held after the offering&nbsp; is
    complete</font></td>
    <td WIDTH="13%" align="center" style="border-style: solid; border-width: 1">
    <font SIZE="2">Percentage ownership (if one percent or more) after the
    offering is complete</font></td>
  </tr>
  <tr>
    <td WIDTH="24%" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">Thomas Sauve</font></td>
    <td WIDTH="12%" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="13%" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="13%" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="13%" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="13%" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="24%" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(T Squared Investments, LLC)</font></td>
    <td WIDTH="12%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">86,207</font></td>
    <td WIDTH="12%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">1,206,897</font></td>
    <td WIDTH="13%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">2,700,000</font></td>
    <td WIDTH="13%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">3,993,104 </font></td>
    <td WIDTH="13%" align="right" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">0</font></td>
    <td WIDTH="13%" style="border-left-style: solid; border-left-width: 1; border-right-style: solid; border-right-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2">
<p align="justify" style="text-indent: 3%">The shares being registered were
acquired by the selling shareholder on January 11, 2008, through a private
placement of common stock, convertible notes, warrants and options described
below. </p>
<p align="center">32</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Pursuant to the terms of the Note
Purchase Agreement, the Company issued and sold to the selling shareholder a
convertible promissory note in the principal amount of $700,000 (the &quot;Note&quot;).
The Company also issued and sold to the selling shareholder 86,207 shares of
Common Stock and warrants to purchase an aggregate of 1,500,000 additional
shares of Common Stock (&quot;Warrants&quot;), at a cash purchase price of $50,000,
pursuant to the terms of a Common Stock Purchase Agreement. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Note bears interest at the rate
of eight percent per annum, payable monthly, and matures on January 11, 2009.
The Note initially converts into 1,206,897 shares, subject to the adjustments to
the conversion price described below; provided that the selling shareholder
shall not be entitled to convert the Note into shares of Common Stock that would
result in beneficial ownership by the selling shareholder and its affiliates of
more than 4.9% of the then outstanding number of shares of Common Stock on such
date. The conversion price of the Note shall automatically be adjusted if the
Company's pre-tax earnings fall below certain thresholds. Specifically, if the
Company's pre-tax earnings are between $0.093 and $0.046 per share as reported
for the six months ended June 30, 2008, the conversion price of the Note shall
be decreased proportionally by 0% if the pre-tax earnings are $0.093 per share
or greater and by 50% if the pre-tax earnings are $0.046 per share. In addition,
if the Company's pre-tax earnings are between $0.204 and $0.102 per share as
reported for the year ended December 31, 2008, the conversion price of the Note
shall be decreased proportionally by 0% if the pre-tax earnings are $0.204 per
share or greater and by 50% if the pre-tax earnings are $0.102 per share. In no
event, however, shall the aforementioned conversion price adjustments be made if
the price of the Common Stock has not, during the three months prior to the
aforementioned measurement dates, been below $3.00 per share for any consecutive
20 day period. The conversion price of the Note shall also be adjusted if the
Company subsequently issues equity at a price per share below the then current
conversion price of the Note. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Warrants are exercisable at any
time and expire on January 11, 2013. The Warrants are exercisable at $1.00 per
share with respect to 500,000 shares of Common Stock, and $1.25 per share with
respect to 1,000,000 shares of Common Stock. The exercise price automatically
adjusts if the Company's pre-tax earnings fall below certain thresholds, on the
same basis as adjustments to the conversion price of the Note described above.
The Warrants also contain an automatic exercise feature that is triggered if the
volume weighted average market price of the Common Stock is equal to or greater
than $3.00 per share for a period of 20 consecutive days and if there is an
effective registration statement for the shares underlying the Warrants. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Of the $50,000 received by the
Company through the sale of share of common stock and warrants to T Squared,
$2,717 of the purchase price was allocated to the common stock and $47,283 was
allocated to the warrants. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Common Stock Purchase Agreement
contains restrictions on the Company's ability to issue additional debt and
preferred stock and provides the selling shareholder with a right of first
refusal with respect to any subsequent funding of the Company. The Common Stock
Purchase Agreement also restricts the ability of the Company's officers and
directors to sell shares of Common Stock for a period of three years. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">In connection with the transactions
described above, HEB LLC, a Nevada limited liability company and a majority
shareholder of the Company and an affiliate of Mr. Scott Haire, our Chairman and
Chief Executive Officer, issued to the selling shareholder options to purchase
an aggregate of 1,200,000 shares of the Company's Common Stock (&quot;Options&quot;).
These Options may be exercised at any time prior to the expiration of the date
that is the later of (a) 36 months from the grant date, or (b) 24 months from
the effectiveness of a registration statement covering the resale of the shares
underlying the option. The exercise price of the Options is (1) $300,000 with
respect to 300,000 shares; (2) $450,000 with respect to 300,000 shares; (3)
$600,000 with respect to 300,000 shares; and (4) $750,000 with respect to
300,000 <font SIZE="2">shares. Neither Mr. Haire nor HEB received any
consideration for the issuance of these options. </p>
</font>
<p align="center">33 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Company has agreed to file a
registration statement covering the resale of all shares of Common Stock sold,
to be issued upon conversion of the Notes and the exercise of the Warrants and
Options. This registration statement to which this Prospectus is a part,
satisfies our obligation. </p>
<b>
<p align="center">SHARES ELIGIBLE FOR FUTURE SALE </p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Upon completion of the offering, and
assuming the conversion of the Note and the exercise of the warrants and options
described above, we will have 27,034,447<b> </b>shares of common stock
outstanding. A current stockholder who is an &quot;affiliate&quot; of the company, defined
in Rule 144 as a person who directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the company, will be required to comply with the resale limitations of Rule 144.
</p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Purchasers of the shares offered by
the selling shareholder, other than affiliates, may resell their shares
immediately. Sales by affiliates will be subject to the volume and other
limitations of Rule 144, including certain restrictions regarding the manner of
sale, notice requirements, and the availability of current public information
about the company. The volume limitations generally permit an affiliate to sell,
within any three month period, a number of shares that does not exceed the
greater of one percent of the outstanding shares of common stock or the average
weekly trading volume during the four calendar weeks preceding his sale. A
person who ceases to be an affiliate at least three months before the sale of
restricted securities beneficially owned for at least one years may sell the
restricted securities under Rule 144 without regard to any of the Rule 144
limitations. </p>
<b>
<p align="center">PLAN OF DISTRIBUTION </p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The 3,993,104 shares being offered by
the selling shareholder may be sold or distributed from time to time by the
selling shareholder (the term &quot;selling shareholder&quot; includes, for purposes of
this section, donees, pledgees, transferees or other successors-in-interest
selling shares received after the date of this prospectus from a named selling
shareholder as a gift, pledge, partnership distribution or other non-sale
related transfer) directly to one or more purchasers or through brokers,
dealers, or underwriters who may act solely as agents or may acquire shares as
principals. Such sales or distributions may be made at prevailing market prices,
at prices related to such prevailing market prices, or at variable prices
negotiated between the sellers and purchasers that may vary. The distribution of
the shares may be effected in one or more of the following methods: </p>
</font><font FACE="Symbol MT" LANG="JA" SIZE="3">
<ul>
  <li>
  <p align="justify"></font><font SIZE="2">ordinary brokerage transactions,
  including long or short sales, </li>
  </font><font FACE="Symbol MT" LANG="JA" SIZE="3">
  <li>
  <p align="justify"></font><font SIZE="2">transactions involving cross or block
  trades, or otherwise on the OTC Bulletin Board, </li>
  </font><font FACE="Symbol MT" LANG="JA" SIZE="3">
  <li>
  <p ALIGN="justify"></font><font size="2">purchases by brokers, dealers, agents
  or underwriters as principals and subsequent resales by the purchasers for
  their own accounts pursuant to this prospectus, </font></li>
  <li>
  <p ALIGN="justify"><font size="2">sales &quot;at the market&quot; to, or through, market
  makers or into an existing market for the shares, </font></li>
  <li>
  <p ALIGN="justify"><font size="2">sales not involving market makers or
  established trading markets, including direct sales to purchasers or sales
  effected through agents, </font></li>
  <li>
  <p ALIGN="justify"><font size="2">transactions involving puts, calls and other
  options, swaps, or other derivatives, whether exchange-listed or otherwise, or
  </font></li>
  <li>
  <p ALIGN="justify"><font size="2">transactions involving any combination of
  the foregoing or any other legally available means. </li>
</ul>
<p ALIGN="JUSTIFY" style="text-indent: 3%">In addition, the selling shareholder
may enter into hedging transactions with one or more broker-dealers who may
engage in short sales of shares in the course of hedging the positions they
assume with the selling shareholder. The selling shareholder may also enter into
options or other transactions with one or more broker-dealers requiring the
delivery of the shares by such broker-dealers with the possibility that such
shares may be resold thereafter pursuant to this prospectus. </p>
<p align="center">34 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'>
<p ALIGN="JUSTIFY" style="text-indent: 3%">A broker, dealer, underwriter, or
agent participating in the distribution of the shares may receive compensation
in the form of discounts, concessions, or commissions from the selling
shareholder and/or purchasers of the shares for whom such person may act as an
agent, to whom such person may sell as principal, or both; and such compensation
as to a particular person may be in excess of customary commissions. The selling
shareholder and any broker-dealers acting in connection with the sale of the
shares being registered may be deemed to be underwriters within the meaning of
Section 2(11) of the Securities Act of 1933, as amended, or the Securities Act,
and any profit realized by them on the resale of shares as principals may be
deemed underwriting compensation under the Securities Act. We have agreed to
indemnify each selling shareholder against certain liabilities, including
liabilities arising under the Securities Act. We know of no existing
arrangements between the selling shareholder and any other stockholder, broker,
dealer, underwriter, or agent relating to the sale or distribution of the
shares, nor can we presently estimate the amount, if any, of such compensation.
</p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Because selling shareholder may be
deemed to be &quot;underwriters&quot; within the meaning of Section 2(11) of the
Securities Act, the selling shareholder will be subject to the prospectus
delivery requirements of the Securities Act. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Although we will receive no proceeds
from the sale of shares pursuant to this prospectus, we have agreed to bear the
costs and expenses of the registration of the shares, including legal and
accounting fees, and such costs and expenses are estimated to be approximately
$16,235. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">We have informed the selling
shareholder that while they are engaged in a distribution of the shares included
in this prospectus they will be required to comply with certain
anti-manipulative rules contained in Regulation M under the Exchange Act. With
certain exceptions, Regulation M prohibits any selling shareholder, any
affiliated purchaser, and any broker-dealer or other person who participates in
such distribution from bidding for or purchasing, or attempting to induce any
person to bid for or purchase, any security that is the subject of the
distribution until the entire distribution is complete. Regulation M also
prohibits any bids or purchases made in order to stabilize the price of a
security in connection with the distribution of that security. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Upon our being notified by the
selling shareholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares through a block trade, special offering,
exchange, distribution or secondary distribution or a purchase by a broker or
dealer, a supplement to this prospectus will be filed, if required, pursuant to
Rule 424(b) under the Securities Act, disclosing (i) the name of each such
selling shareholder and of the participating broker-dealer(s), (ii) the number
of shares involved, (iii) the price at which such shares were sold, (iv) the
commissions paid or discounts or concessions allowed to such broker-dealer(s),
where applicable, (v) that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference in
this prospectus and (vi) other facts material to the transaction. In addition,
upon our being notified by the selling shareholder that a donee, pledgee,
transferee or other successor-in-interest intends to sell more than 500 shares,
a supplement to this prospectus will be filed. </p>
<b>
<p align="center">INDEPENDENT PUBLIC ACCOUNTANTS </p>
</b>
<p style="text-indent: 3%">There have been no changes in and/or disagreements
with Pritchett, Siler &amp; Hardy, P.C., independent certified public accountants,
on accounting and financial disclosure matters. </p>
<p align="center">35 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'><b>
<p align="center">LEGAL MATTERS </p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Certain legal matters in this
offering, including the legality of the common stock offered pursuant to this
prospectus, will be passed upon for the Company and the selling shareholder by
Colbert Johnston LLP. </p>
<b>
<p align="center">EXPERTS </p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The consolidated financial statements
of the Company included in this prospectus have been audited for the year ending
December 31, 2006 and December 31, 2007 by Pritchett, Siler &amp; Hardy, P.C.,
independent certified public accountants, as stated in the opinion, which has
been rendered upon the authority of said firm as experts in accounting and
auditing. </p>
<b>
<p align="center">CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE </p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">On February 13, 2007, we dismissed
Clancy and Co., P.L.L.C. as our independent auditors. The reports of Clancy and
Co., P.L.L.C. on our financial statements for the year ended December 31, 2005
did not contain an adverse opinion or a disclaimer of opinion, and were not
modified as to uncertainty, audit scope or accounting principles, other than the
&quot;going concern&quot; disclaimer contained therein. The decision to change our
independent registered public accountant was authorized and approved by our
board of directors. On February 13, 2007, we engaged Pritchett, Siler &amp; Hardy,
P.C., as our new independent registered public accountant. </p>
<b>
<p align="center">DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES </p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Company&#146;s Bylaws provide that the
Company has the power to indemnify its directors and officers to the fullest
extent provided by Texas law. Pursuant to Texas law, a corporation may indemnify
its officers and directors, provided that such person: </p>
<p style="margin-left: 3%">(a) </p>
<p style="margin-left: 6%; margin-top: -25.5pt">conducted himself or herself in
good faith; </p>
<p ALIGN="JUSTIFY" style="margin-left: 3%">(b) </p>
<p ALIGN="JUSTIFY" style="margin-left: 6%; margin-top: -25.5pt">reasonably
believed (i) in the case of conduct in his or her official capacity as an
officer or director or officer of the corporation, that such conduct was in the
corporation's best interests; and (ii) in all other cases, that his or her
conduct was at least not opposed to the corporation's best interests; and </p>
<p style="margin-left: 3%">(c) </p>
<p style="margin-left: 6%; margin-top: -25.5pt">in the case of any criminal
proceeding, had no reasonable cause to believe that such conduct was unlawful.
</p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The effect of these provisions is
potentially to indemnify our directors and officers from all costs and expenses
of liability incurred by them in connection with any action, suit or proceeding
in which they are involved by reason of their affiliation with the Company. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to our officers,
directors, or persons controlling the Company under the foregoing provisions,
the Company has been informed that in the opinion of the Securities Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable. </p>
</font><font FACE="Times New Roman PSMT" SIZE="2">
<p align="center">36 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font size="2"><b>
<p align="center">INTERESTS OF NAMED EXPERTS AND COUNSEL </p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">No &quot;Expert&quot; or &quot;Counsel&quot; as defined
by Item 509 of Regulation S-K promulgated pursuant to the Securities Act, whose
services were used in the preparation of this Form S-1, was hired on a
contingent basis or will receive a direct or indirect interest in the company.
</p>
<b>
<p align="center">WHERE YOU CAN FIND MORE INFORMATION </p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">We have filed a registration
statement on Form S-1 with the Securities and Exchange Commission under the
Securities Act of 1933 with respect to the shares of common stock offered in
this offering prospectus. This prospectus, which is a part of the registration
statement, does not contain all of the information set forth in the registration
statement, or the exhibits that are part of the registration statement. You
should refer to the registration statement and its exhibits for additional
information that is not contained in this prospectus. Whenever we make reference
in this prospectus to any of our contracts, agreements or other documents, you
should refer to the exhibits attached to the registration statement for copies
of the actual contract, agreement or other document. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">We are subject to the informational
requirements of the Securities Exchange Act of 1934, as amended, and we are
required to file reports, any proxy statements and other information with the
Securities and Exchange Commission. You can read our Securities and Exchange
Commission files, including this registration statement, at the Securities and
Exchange Commission&#146;s web site at http://www.sec.gov. You may also read and copy
any documents we file with the Securities and Exchange Commission at its public
reference facility at 450 Fifth Street, N.W., Washington, D.C. 20549. You may
also obtain copies of the documents at prescribed rates by writing to the Public
Reference Section of the Securities and Exchange Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549. Please call the Securities and Exchange Commission
at 1-800-SEC-0330 for further information on the operation of the public
reference facilities. </p>
<p align="center">37 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font FACE="Times New Roman PS" SIZE="2"><b>
<p align="center">INDEX TO FINANCIAL STATEMENTS </p>
</b></font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="90%"><font SIZE="2"><b><u>Annual Financial Statements</u></b></font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%"><font SIZE="2">
    <p style="margin-left: 3%">Report of Independent Registered Public
    Accounting Firm</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">F-1</font></td>
  </tr>
  <tr>
    <td WIDTH="90%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%"><font SIZE="2">
    <p style="margin-left: 3%">Consolidated Balance Sheets as of December 31,
    2007 and 2006</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">F-2</font></td>
  </tr>
  <tr>
    <td WIDTH="90%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%"><font SIZE="2">
    <p style="margin-left: 3%">Consolidated Statements of Operations for the</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%"><font SIZE="2">
    <p style="margin-left: 6%">years ended December 31, 2007 and 2006</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">F-3</font></td>
  </tr>
  <tr>
    <td WIDTH="90%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%"><font SIZE="2">
    <p style="margin-left: 3%">Consolidated Statements of Changes in
    Stockholders&#146; Deficiency for the</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%"><font SIZE="2">
    <p style="margin-left: 6%">years ended December 31, 2007 and 2006</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">F-4</font></td>
  </tr>
  <tr>
    <td WIDTH="90%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%"><font SIZE="2">
    <p style="margin-left: 3%">Consolidated Statements of Cash Flows for the</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%"><font SIZE="2">
    <p style="margin-left: 6%">years ended December 31, 2007 and 2006</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">F-5</font></td>
  </tr>
  <tr>
    <td WIDTH="90%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%"><font SIZE="2">
    <p style="margin-left: 3%">Notes to the Consolidated Financial Statements</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">F- 6</font></td>
  </tr>
  <tr>
    <td WIDTH="90%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%"><font SIZE="2"><b><u>Interim Financial Statements</u></b></font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%"><font SIZE="2">
    <p style="margin-left: 3%">Consolidated Balance Sheets as of March 31, 2008
    (Unaudited)</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%"><font SIZE="2">
    <p style="margin-left: 6%">And December 31, 2007 (Audited)</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">F-16</font></td>
  </tr>
  <tr>
    <td WIDTH="90%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%"><font SIZE="2">
    <p style="margin-left: 3%">Consolidated Statements of Operations for the</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%"><font SIZE="2">
    <p style="margin-left: 6%">Three months ended March 31, 2008 and 2007</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">F-17</font></td>
  </tr>
  <tr>
    <td WIDTH="90%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%"><font SIZE="2">
    <p style="margin-left: 3%">Consolidated Statements of Cash Flows for the</font></td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%"><font SIZE="2">
    <p style="margin-left: 6%">Three months ended March 31, 2008 and 2007</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">F-18</font></td>
  </tr>
  <tr>
    <td WIDTH="90%">&nbsp;</td>
    <td WIDTH="10%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="90%"><font SIZE="2">
    <p style="margin-left: 3%">Notes to the Consolidated Financial Statements</font></td>
    <td WIDTH="10%" align="right"><font SIZE="2">F- 19</font></td>
  </tr>
</table>
<p align="center"><font size="2">38</font></p>
<hr color="#000000" size="5"><p Style='page-break-before:always'><font FACE="Times New Roman PSMT" SIZE="2">
<p>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM </p>
<p>Board of Directors and Shareholders <br>
MB SOFTWARE CORPORATION AND SUBSIDIARY </p>
<p ALIGN="JUSTIFY">We have audited the accompanying consolidated balance sheets
of MB Software Corporation and Subsidiary as of December 31, 2007 and 2006 and
the related consolidated statements of operations, changes in stockholders&#146;
deficiency and cash flows for the years ended December 31, 2007 and 2006. These
consolidated financial statements are the responsibility of the Company&#146;s
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. </p>
<p ALIGN="JUSTIFY">We conducted our audits in accordance with the standards of
the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company&#146;s internal control
over financial reporting. Accordingly, we express no such opinion. 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. We believe that our
audits provide a reasonable basis for our opinion. </p>
<p ALIGN="JUSTIFY">In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
MB Software Corporation and Subsidiary as of December 31, 2007 and 2006 and the
consolidated results of their operations and their cash flows for the years
ended December 31, 2007 and 2006, in conformity with accounting principles
generally accepted in the United States of America. </p>
<p ALIGN="JUSTIFY">The accompanying financial statements have been prepared
assuming that MB Software Corporation and Subsidiary will continue as a going
concern. As discussed in Note 2 to the financial statements, MB Software
Corporation and Subsidiary have incurred recurring losses and has a
stockholders&#146; deficiency. Further, the Company has current liabilities in excess
of current assets. These factors raise substantial doubt about the ability of
the Company to continue as a going concern. Management&#146;s plans in regards to
these matters are also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of these
uncertainties. </p>
<p>/s/ Pritchett, Siler &amp; Hardy, P.C. </p>
<p>PRITCHETT, SILER &amp; HARDY, P.C. </p>
<p>Salt Lake City, Utah <br>
March 28, 2008 </p>
<p align="center">F-1 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font FACE="Times New Roman PS" SIZE="2"><b>
<p ALIGN="CENTER">MB SOFTWARE CORPORATION AND SUBSIDIARY <br>
CONSOLIDATED BALANCE SHEETS <br>
DECEMBER 31, 2007 and 2006 </p>
</b></font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="70%">&nbsp;</td>
    <td WIDTH="3%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">2007</font></td>
    <td WIDTH="3%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">2006</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">ASSETS</font></td>
    <td WIDTH="3%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%">&nbsp;</td>
    <td WIDTH="3%">&nbsp;</td>
    <td WIDTH="12%">&nbsp;</td>
    <td WIDTH="3%">&nbsp;</td>
    <td WIDTH="12%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">CURRENT ASSETS:</font></td>
    <td WIDTH="3%">&nbsp;</td>
    <td WIDTH="12%">&nbsp;</td>
    <td WIDTH="3%">&nbsp;</td>
    <td WIDTH="12%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Cash</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">781</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">236,301</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Accounts Receivable</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">24,668</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">59,724</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Notes Receivable</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">81,650</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Inventory</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">263,276</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">96,571</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Prepaid inventory</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">46,537</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Total current assets</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">370,375</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">439,133</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Property and Equipment, Net</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">23,335</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">43,415</font></td>
  </tr>
  <tr>
    <td WIDTH="70%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Investments</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Other Assets</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">12,020</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">13,739</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">TOTAL ASSETS</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">405,730</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">496,287</font></td>
  </tr>
</table>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="70%"><font SIZE="2">LIABILITIES AND STOCKHOLDERS'</font></td>
    <td WIDTH="3%">&nbsp;</td>
    <td WIDTH="12%">&nbsp;</td>
    <td WIDTH="3%">&nbsp;</td>
    <td WIDTH="12%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">DEFICIENCY</font></td>
    <td WIDTH="3%">&nbsp;</td>
    <td WIDTH="12%">&nbsp;</td>
    <td WIDTH="3%">&nbsp;</td>
    <td WIDTH="12%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%">&nbsp;</td>
    <td WIDTH="3%">&nbsp;</td>
    <td WIDTH="12%">&nbsp;</td>
    <td WIDTH="3%">&nbsp;</td>
    <td WIDTH="12%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">CURRENT LIABILITIES:</font></td>
    <td WIDTH="3%">&nbsp;</td>
    <td WIDTH="12%">&nbsp;</td>
    <td WIDTH="3%">&nbsp;</td>
    <td WIDTH="12%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Accounts payable</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">110,107</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">45,396</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Dividends/Royalties, Accrued liabilities</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">326,649</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">302,833</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Accrued interest-Related
    Parties</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">274,680</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">138,036</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Notes Payable- Related Parties</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">1,498,074</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">1,277,877</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Notes Payable</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">10,000</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Obligations Under Capital Leases &#150; Current
    Portion</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">3,169</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Total Current Liabilities</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">2,219,510</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">1,767,311</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">TOTAL LIABILITIES</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">2,219,510</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">1,767,311</font></td>
  </tr>
  <tr>
    <td WIDTH="70%">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Stockholders' Deficiency</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Preferred stock, $10 par
    value, 5,000,000 shares</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">authorized; 1,000 issued
    and outstanding</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">10,000</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Common stock: $0.001 par value; 20,000,000
    shares authorized;</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">16,145,432 issued and 16,141,343 outstanding:</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">16,145</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">16,145</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Additional paid-in capital</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">11,171,496</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">11,181,496</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Less Treasury Stock, at cost; 4,089 shares</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">(12,039)</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">(12,039)</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Accumulated deficit</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(12,999,382)</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(12,456,626)</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Total stockholders deficiency</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">(1,813,780)</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">(1,271,024)</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">TOTAL LIABILITIES AND
    STOCKHOLDERS' DEFICIENCY</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">$ 405,730</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">$496,287</font></td>
  </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2">
<p align="center">The accompanying notes are an integral part of these
consolidated financial statements. </p>
<p align="center">F-2 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font FACE="Times New Roman PS" SIZE="2"><b>
<p ALIGN="CENTER">MB SOFTWARE CORPORATION AND SUBSIDIARY <br>
CONSOLIDATED STATEMENTS OF OPERATIONS <br>
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006 </p>
<hr color="#000000"></b></font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="70%">&nbsp;</td>
    <td WIDTH="3%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>2007</b></font></td>
    <td WIDTH="3%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>2006</b></font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Revenues</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">630,505</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">189,755</font></td>
  </tr>
  <tr>
    <td WIDTH="70%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Cost of revenues</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">223,184</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">193,057</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Gross margin</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">407,321</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(3,302)</font></td>
  </tr>
  <tr>
    <td WIDTH="70%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Selling, general and administrative</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(813,058)</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(484,583)</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Loss from operations</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(405,737)</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(487,885)</font></td>
  </tr>
  <tr>
    <td WIDTH="70%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Other income (expense)</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">
    <p style="margin-left: 3%">Interest expense, net</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(137,019)</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(135,674)</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Total other income
    (expense)</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(137,019)</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(135,674)</font></td>
  </tr>
  <tr>
    <td WIDTH="70%">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Loss before provision for income taxes</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">(542,756)</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">(623,559)</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Current tax expense</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Deferred tax expense</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2"><b>Net loss</b></font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2"><b>
    <p style="margin-right: 4">$</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2"><b>(542,756)</b></font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2"><b>
    <p style="margin-right: 4">$</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2"><b>(623,559)</b></font></td>
  </tr>
  <tr>
    <td WIDTH="70%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2"><b>Basic and diluted loss per share:</b></font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">
    <p style="margin-left: 3%">Continuing operations</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(0.03)</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(0.04)</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2"><b>
    <p style="margin-right: 4">$</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2"><b>(0.03)</b></font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2"><b>
    <p style="margin-right: 4">$</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2"><b>(0.04)</b></font></td>
  </tr>
  <tr>
    <td WIDTH="70%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2"><b>Weighted average common shares outstanding</b></font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2"><b>
    <p style="margin-right: 4">16,141,343</b></font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2"><b>
    <p style="margin-right: 4">16,141,343</b></font></td>
  </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2">
<p align="center">The accompanying notes are an integral part of these
consolidated financial statements. </p>
<p align="center">F-3 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font FACE="Times New Roman PS" size="2">
<p align="center">MB SOFTWARE CORPORATION AND SUBSIDIARY <br>
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS&#146; DEFICIENCY <br>
YEARS ENDED DECEMBER 31, 2007 AND 2006 </p>
<hr color="#000000"></font></b>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="30%">&nbsp;</td>
    <td WIDTH="10%" align="center">&nbsp;</td>
    <td WIDTH="10%" align="center" colspan="2">&nbsp;</td>
    <td WIDTH="10%" align="center">&nbsp;</td>
    <td WIDTH="2%" align="center">&nbsp;</td>
    <td WIDTH="8%" align="center">&nbsp;</td>
    <td WIDTH="2%" align="center">&nbsp;</td>
    <td WIDTH="8%" align="center">&nbsp;</td>
    <td WIDTH="2%" align="center">&nbsp;</td>
    <td WIDTH="8%" align="center">&nbsp;</td>
    <td WIDTH="2%" align="center">&nbsp;</td>
    <td WIDTH="8%" align="center">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%">&nbsp;</td>
    <td WIDTH="10%" align="center"><font SIZE="2">Preferred</font></td>
    <td WIDTH="10%" align="center" colspan="2"><font SIZE="2">Preferred</font></td>
    <td WIDTH="10%" align="center"><font SIZE="2">Common</font></td>
    <td WIDTH="8%" COLSPAN="2" align="center"><font SIZE="2">Common</font></td>
    <td WIDTH="10%" align="center" colspan="2"><font SIZE="2">Additional</font></td>
    <td WIDTH="2%" align="center">&nbsp;</td>
    <td WIDTH="8%" align="center">&nbsp;</td>
    <td WIDTH="2%" align="center">&nbsp;</td>
    <td WIDTH="8%" align="center">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%">&nbsp;</td>
    <td WIDTH="10%" align="center"><font SIZE="2">Stock</font></td>
    <td WIDTH="10%" align="center" colspan="2"><font SIZE="2">Stock</font></td>
    <td WIDTH="10%" align="center"><font SIZE="2">Stock</font></td>
    <td WIDTH="10%" align="center" colspan="2"><font SIZE="2">Stock</font></td>
    <td WIDTH="10%" align="center" colspan="2"><font SIZE="2">Paid-In</font></td>
    <td WIDTH="10%" align="center" colspan="2"><font SIZE="2">Accumulated</font></td>
    <td WIDTH="25%" COLSPAN="2" align="center"><font SIZE="2">Treasury</font></td>
  </tr>
  <tr>
    <td WIDTH="30%">&nbsp;</td>
    <td WIDTH="10%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Shares</font></td>
    <td WIDTH="10%" align="center" colspan="2" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Amount</font></td>
    <td WIDTH="10%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Shares</font></td>
    <td WIDTH="8%" COLSPAN="2" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Amount</font></td>
    <td WIDTH="10%" align="center" colspan="2" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Capital</font></td>
    <td WIDTH="10%" align="center" colspan="2" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Deficit</font></td>
    <td WIDTH="10%" align="center" colspan="2" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Stock</font></td>
  </tr>
  <tr>
    <td WIDTH="30%" bgcolor="#E6E6E6"><font SIZE="2">Balance,December 31,</font></td>
    <td WIDTH="10%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="2%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="8%" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">2005</font></td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">16,145,432</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">16,145</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">1,181,496</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">&nbsp;(11,833,067)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="8%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(12,039)</font></td>
  </tr>
  <tr>
    <td WIDTH="30%"><font SIZE="2">Net Loss</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(623,559)</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%" bgcolor="#E6E6E6"><font SIZE="2">Balance, December 31,</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">2006</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">16,145,432</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">16,145</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">11,181,496</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(12,456,626)</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(12,039)</font></td>
  </tr>
  <tr>
    <td WIDTH="30%"><font SIZE="2">Issuance of preferred</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%"><font SIZE="2">
    <p style="margin-left: 3%">stock</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">1,000</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">10,000</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(10,000)</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%" bgcolor="#E6E6E6"><font SIZE="2">Net Loss</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(542,756)</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%"><font SIZE="2">Balance, December 31,</font></td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="10%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="8%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="30%"><font SIZE="2">
    <p style="margin-left: 3%">2007</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">1,000 </font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <p style="margin-right: 4"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">10,000</font></td>
    <td WIDTH="10%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">16,145,432</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">16,145</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">$ </font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <p style="margin-right: 4"><font SIZE="2">11,171,496</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <p style="margin-right: 4"><font SIZE="2">$</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">&nbsp;(12,999,382)</font></td>
    <td WIDTH="2%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="8%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">(12,039)</font></td>
  </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2">
<p align="center">The accompanying notes are an integral part of these
consolidated financial statements. </p>
<p align="center">F-4 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font SIZE="2"><b>
<p ALIGN="CENTER">MB SOFTWARE CORPORATION AND SUBSIDIARY</b> <b><br>
CONSOLIDATED STATEMENTS OF CASH FLOWS <br>
YEARS ENDED DECEMBER 31, 2007 AND 2006 </p>
</b></font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="67%">&nbsp;</td>
    <td WIDTH="3%" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>2007</b></font></td>
    <td WIDTH="3%" align="center">&nbsp;</td>
    <td WIDTH="3%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="12%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>2006</b></font></td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2"><b><u>Cash flows from operating activities</u></b></font></td>
    <td WIDTH="3%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%">&nbsp;</td>
    <td WIDTH="3%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" bgcolor="#E6E6E6"><font SIZE="2">Loss from continuing
    operations</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(542,756)</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(623,559)</font></td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2">Adjustments to reconcile net loss to net cash
    used in operating activities</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">Depreciation</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">20,080</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">21,786</font></td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2">Changes in assets and liabilities:</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">(Increase) decrease in accounts receivable</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">35,056</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(29,526)</font></td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2">
    <p style="margin-left: 3%">(Increase) decrease in inventory</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">(166,705)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">(65,927)</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">(Increase) decrease in prepaid expenses and other
    assets</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">48,256</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">85,090</font></td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2">
    <p style="margin-left: 3%">Increase (decrease) in accounts payable and
    accrued liabilities</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">64,711</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">213,166</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">Increase (decrease) in royalties payable,
    including related accrued interest</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">160,460</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2">Net cash flows (used) in operating activities</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(380,898)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(398,970)</font></td>
  </tr>
  <tr>
    <td WIDTH="67%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2"><b><u>Cash flows from investing activities</u></b></font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">Increase in notes receivable</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(81,650)</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2">
    <p style="margin-left: 3%">Purchase of fixed assets</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(16,430)</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" bgcolor="#E6E6E6"><font SIZE="2">Net cash flows (used) in
    investing activities</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(81,650)</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(16,430)</font></td>
  </tr>
  <tr>
    <td WIDTH="67%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2"><b><u>Cash flows from financing activities</u></b></font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">Principal payments under capital lease obligation</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(3,169)</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(3,992)</font></td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2">
    <p style="margin-left: 3%">Proceeds from notes payable</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">10,000</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">Proceeds from notes payable-related parties</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">385,000</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">670,000</font></td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2">
    <p style="margin-left: 3%">Payments on notes payable-related party</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">(105,000)</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">Net payment on line of credit-related party</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(59,803)</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(17,135)</font></td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2">Net cash flows provided by financing
    activities</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">227,028</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">648,873</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" bgcolor="#E6E6E6"><font SIZE="2"><b>Increase (decrease) in
    cash</b></font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>(235,520)</b></font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>
    <p style="margin-right: 4">233,473</b></font></td>
  </tr>
  <tr>
    <td WIDTH="67%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2"><b>Cash and cash equivalents, beginning of
    year</b></font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>
    <p style="margin-right: 4">236,301</b></font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>
    <p style="margin-right: 4">2,828</b></font></td>
  </tr>
  <tr>
    <td WIDTH="67%" bgcolor="#E6E6E6"><font SIZE="2"><b>Cash and cash
    equivalents, end of year</b></font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>
    <p style="margin-right: 4">$</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>
    <p style="margin-right: 4">781</b></font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>
    <p style="margin-right: 4">$</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>
    <p style="margin-right: 4">236,301</b></font></td>
  </tr>
  <tr>
    <td WIDTH="67%">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2"><b><u>Cash paid during the year for:</u></b></font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2">
    <p style="margin-left: 3%">Interest</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">108</font></td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">Income taxes</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2">Supplemental non-cash investing and financing
    activities:</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">For the year ended December 31, 2007:</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2">The Company issued 1,000 shares of Preferred
    Stock in connection with the</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2">signing of a License agreement.</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%"><font SIZE="2">
    <p style="margin-left: 3%">For the year ended December 31, 2006:</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 6%">None</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2">
<p align="center">The accompanying notes are an integral part of these
consolidated financial statements. </p>
<p align="center">F-5 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font size="2"><b>
<p ALIGN="center">MB SOFTWARE CORPORATION AND SUBSIDIARY <br>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS <br>
YEARS ENDED DECEMBER 31 2007 AND 2006 </p>
</b>
<p align="justify">NOTE 1 &#150; NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING
POLICIES </p>
<b>
<p align="justify">Nature of Operations </p>
</b>
<p ALIGN="JUSTIFY">MB Software Corporation, a Texas corporation and subsidiary
Wound Care Innovations, LLC, a Nevada limited liability company (collectively
referred to as the &quot;Company&quot;) distributes collagen-based wound care products to
healthcare providers such as physicians, clinics and hospitals throughout the
United States. </p>
</font><b><font SIZE="2">
<p align="justify">Significant Accounting Policies<i> </p>
</i></font></b><font SIZE="2">
<p ALIGN="JUSTIFY"><u>Principles of consolidation and presentation</u> &#150; The
consolidated financial statements include the accounts of the Company and its
wholly-owned subsidiary. All intercompany transactions and balances have been
eliminated upon consolidation. </p>
<p ALIGN="JUSTIFY"><u>Business combinations</u> &#150; Transfers and exchanges of
assets between companies under common control are accounted for at historical
cost in a manner similar to that in a pooling of interests accounting. The
excess of the cost of the asset acquired over the net assets sold at their book
values are charged to additional paid-in capital. </p>
<p ALIGN="JUSTIFY"><u>Use of estimates</u> &#150; The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States of America 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 reporting period.
Management makes its best estimate of the ultimate outcome for these items based
on historical trends and other information available when the financial
statements are prepared. Changes in estimates are recognized in accordance with
the accounting rules for the estimate, which is typically in the period when new
information becomes available to management. Actual results could differ from
those estimates. </p>
<p ALIGN="JUSTIFY"><u>Fair value of financial instruments</u> &#150; For certain of
the Company&#146;s financial instruments, including cash and cash equivalents,
accounts receivable, accounts payable and other accrued liabilities, and amounts
due to related parties, the carrying amounts approximate fair value due to their
short maturities. </p>
<p ALIGN="JUSTIFY"><u>Cash and cash equivalents</u> &#150; The Company considers all
highly liquid investments purchased with original maturities of three months or
less to be cash equivalents. There were no cash equivalents at December 31,
2007. The Company maintains its cash in bank deposit accounts at high quality
financial institutions. The balances at times may exceed Federally insured
limits of $100,000. </p>
<p ALIGN="JUSTIFY"><u>Fixed assets</u> &#150; Fixed assets are stated at cost.
Depreciation for financial statement purposes is computed on the straight-line
method over the estimated useful lives of the related assets ranging from three
to seven years. When fixed assets are sold or otherwise disposed of, the asset
account and related accumulated depreciation account are relieved, and any gain
or loss is included in operations. Maintenance and repairs are expensed as
incurred. Replacements and betterments are capitalized. Depreciation expense for
2007 amounted to $20,080 (2006: $21,786). </p>
<p align="justify"><u>Revenue recognition</u> &#150; Revenue is recognized when the
product is shipped and the risks and rewards of ownership have transferred to
the customer. The Company recognizes shipping and handling fees as
<font FACE="Times New Roman PSMT" SIZE="2">revenue, and the related expenses as
a component of cost of sales. </p>
</font>
<p align="center">F-6 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'><b>
<p ALIGN="center">MB SOFTWARE CORPORATION AND SUBSIDIARY <br>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS <br>
YEARS ENDED DECEMBER 31 2007 AND 2006 </p>
</b></font><font FACE="Times New Roman PSMT" SIZE="2">
<p ALIGN="JUSTIFY"><u>Allowance for doubtful accounts</u> &#150; The Company
establishes an allowance for doubtful accounts to ensure accounts receivables
are not overstated due to uncollectibility. Bad debt reserves are maintained
based on a variety of factors, including the length of time receivables are past
due and a detailed review of certain individual customer accounts. If
circumstances related to customers change, estimates of the recoverability of
receivables would be further adjusted. The allowance for doubtful accounts at
December 31, 2007, and 2006 is $9,000 and $0 respectively. </p>
<p ALIGN="JUSTIFY">I<u>nventories</u> &#150; Inventories are stated at the lower of
cost or net realizable value, with cost computed on a first-in, first-out basis.
Inventories consist of powders, gels and the related packaging supplies. The
Company has recorded an allowance for obsolete and slow moving inventory of
$7,261 and $75,000 at December 31, 2007 and 2006 respectively </p>
<p ALIGN="JUSTIFY"><u>Long-lived assets</u> &#150; Long-lived assets and certain
identifiable intangibles to be held and used by the Company are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The Company continuously
evaluates the recoverability of its long-lived assets based on estimated future
cash flows and the estimated liquidation value of such long-lived assets, and
provides for impairment if such undiscounted cash flows are insufficient to
recover the carrying amount of the long-lived assets. If impairment exists, an
adjustment is made to write the asset down to its fair value, and a loss is
recorded as the difference between the carrying value and fair value. Fair
values are determined based on quoted market values, discounted cash flows or
internal and external appraisals, as applicable. Assets to be disposed of are
carried at the lower of carrying value or estimated net realizable value. </p>
<p ALIGN="JUSTIFY"><u>Income taxes</u> &#150; The Company recognizes deferred tax
assets and liabilities for the expected tax consequences of temporary
differences between the tax bases of assets and liabilities and their reported
amounts using enacted tax rates in effect for the year the differences are
expected to reverse. The Company records a valuation allowance to reduce the
deferred tax assets to the amount that is more likely than not to be realized.
</p>
<p ALIGN="JUSTIFY"><u>Stock-based compensation</u> &#150; The Company adopted SFAS
No. 123 (revised 2004), &quot;Share-Based Payment&quot; (&quot;SFAS 123(R)&quot;), on January 1,
2006, which requires the measurement and recognition of compensation expense for
all share-based awards made to employees and directors, including employee stock
options and shares issued through its employee stock purchase plan, based on
estimated fair values. Prior to the adoption of SFAS 123(R), the Company
accounted for stock-based compensation using the intrinsic value method
prescribed in Accounting Principles Board (&quot;APB&quot;) Opinion No. 25, &quot;Accounting
for Stock Issued to Employees.&quot; Under the intrinsic value method that was used
to account for stock-based awards prior to January 1, 2006, which had been
allowed under the original provisions of SFAS 123, compensation expense is
recorded on the date of grant if the current market price of the underlying
stock exceeded the exercise price. Any compensation expense is recorded on a
straight-line basis over the vesting period of the grant. The adoption of this
standard had no impact to the Company&#146;s financial position, results of
operations or cash flows as the Company&#146;s previous stock-based compensation
awards expired prior to January 1, 2006, and there have been no grants during
2006 or 2007. See Note 8 for a description of the Company&#146;s stock option plan.
</p>
<p align="justify"><u>Earnings per share</u> &#150; Basic and diluted earnings or
loss per share (&quot;EPS&quot;) amounts in the financial statements are computed in
accordance with SFAS No. 128, &quot;Earnings per Share.&quot; Basic EPS is based on the
weighted average number of common shares outstanding. Diluted EPS is based on
the weighted average number of common shares outstanding plus dilutive common
stock equivalents. Basic EPS is computed by dividing net earnings available to
common stockholders (numerator) by the weighted average number of common shares
outstanding (denominator) during the period. Diluted EPS is calculated by
dividing net earnings by the weighted average number of common shares
outstanding and other dilutive securities. Accordingly, diluted EPS was not
presented because it was antidilutive. All per share and per share information
are adjusted retroactively to reflect stock splits and changes in par value. </p>
<p align="center">F-7 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font SIZE="2"><b>
<p ALIGN="center">MB SOFTWARE CORPORATION AND SUBSIDIARY <br>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS <br>
YEARS ENDED DECEMBER 31 2007 AND 2006 </p>
</b></font><font FACE="Times New Roman PSMT" SIZE="2">
<p ALIGN="JUSTIFY"><u>Related party transactions</u> &#150; A related party is
generally defined as (i) any person that holds 10% or more of the Company&#146;s
securities and their immediate families, (ii) the Company&#146;s management, (iii)
someone that directly or indirectly controls, is controlled by or is under
common control with the Company, or (iv) anyone who can significantly influence
the financial and operating decisions of the Company. A transaction is
considered to be a related party transaction when there is a transfer of
resources or obligations between related parties. </p>
<p><u>Recent accounting pronouncements</u> &#150; The Financial Accounting Standards
Board (&quot;FASB&quot;) has issued the following pronouncements: </p>
<p ALIGN="JUSTIFY">In December 2007, the FASB issued FAS No. 141 (Revised 2007),
&quot;Business Combinations&quot; (FAS 141R) which replaces FAS No. 141, &quot;Business
Combinations&quot;. FAS 141R establishes principles and requirements for how an
acquirer recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, any noncontrolling interest in the
acquiree and the goodwill acquired. The statement also establishes disclosure
requirements that will enable users to evaluate the nature and financial effects
of the business combination. FAS 141R is effective for our fiscal year 2009 and
must be applied prospectively to all new acquisitions closing on or after
January 1, 2009. Early adoption of this standard is not permitted. We are
currently evaluating the impact, if any, of FAS 141R on our Consolidated
Financial Statements. </p>
<p ALIGN="JUSTIFY">In February 2007, the FASB issued FAS No. 159, &quot;The Fair
Value Option for Financial Assets and Financial Liabilities &#151; Including an
amendment of FASB Statement No. 115&quot; (FAS 159). FAS 159 expands the use of
fair-value accounting but does not affect existing standards that require assets
or liabilities to be carried at fair value. Under FAS 159, a company may elect
to use fair value to measure various assets and liabilities including accounts
receivable, available-for-sale and held-to-maturity securities, equity method
investments, accounts payable, guarantees and issued debt. If the use of fair
value is elected, any upfront costs and fees related to the item must be
recognized in earnings and cannot be deferred. The fair value election is
irrevocable and generally made on an instrument-by-instrument basis, even if a
company has similar instruments that it elects not to measure based on fair
value. At the adoption date, unrealized gains and losses on existing items for
which fair value has been elected are reported as a cumulative adjustment to
beginning retained earnings. Subsequent to the adoption of FAS 159, changes in
fair value are recognized in earnings. FAS 159 is effective for our fiscal year
2008. We are currently evaluating the impact, if any, of FAS 159 on our
Consolidated Financial Statements. </p>
<p ALIGN="JUSTIFY">In December 2007, the FASB issued FAS No. 160, &quot;Noncontrolling
Interests in Consolidated Financial Statements -An Amendment of ARB No. 51&quot; (FAS
160). FAS 160 requires that accounting and reporting for minority interests be
recharacterized as noncontrolling interests and classified as a component of
equity. The standard is effective for our fiscal year 2009 and must be applied
prospectively. We do not <font SIZE="2">expect that the adoption of FAS 160 will
have a material impact on our Consolidated Financial Statements. </p>
</font>
<p align="center">F-8 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font SIZE="2"><b>
<p ALIGN="center">MB SOFTWARE CORPORATION AND SUBSIDIARY <br>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS <br>
YEARS ENDED DECEMBER 31 2007 AND 2006 </p>
</b>
<p ALIGN="JUSTIFY">In February 2006, the FASB issued SFAS 155, <i>Accounting for
Certain Hybrid Financial Instruments &#150; an amendment of FASB Statements 133 and
140</i>, (&quot;SFAS 155&quot;). SFAS was effective for the Company beginning January 1,
2007. The statement permits interests in hybrid financial instruments that
contain an embedded derivative that would otherwise require bifurcation, to be
accounted for as a single financial instrument at fair value, with changes in
fair value recognized in earnings. This election is permitted on an
instrument-by-instrument basis for all hybrid financial instruments held,
obtained, or issued as of the adoption date. The adoption had no impact to the
Company&#146;s consolidated financial position, results of operations or cash flows.
</p>
<p ALIGN="JUSTIFY">In June 2006, the FASB issued FASB Interpretation No. 48, <i>
Accounting for Uncertainty of Income Taxes-an interpretation of FASB Statement
No. 109</i> (&quot;FIN 48&quot;), which clarifies the accounting for uncertainty in income
tax positions. This Interpretation requires that the Company recognize in the
consolidated financial statements the impact of a tax position that is more
likely than not to be sustained upon examination based on the technical merits
of the position. The provisions of FIN 48 will be effective for the Company as
of the beginning of the Company&#146;s 2008 fiscal year, with the cumulative effect
of the change in accounting principle recorded as an adjustment to opening
retained earnings. The provisions of FASB Interpretation 48 are not expected to
have any impact on the Company&#146;s financial statements. </p>
<p ALIGN="JUSTIFY">In September 2006, the FASB issued FASB No. 158, <i>
Employers&#146; Accounting for Defined Benefit Pension</i> <i>and Other
Postretirement</i> <i>Benefits</i> (&quot;FAS 158&quot;). FAS 158 addresses the accounting
for defined benefit pension plans and other postretirement benefit plans
(&quot;plans&quot;). Specifically, FAS 158 requires companies to recognize an asset for a
plan&#146;s overfunded status or a liability for a plan&#146;s underfunded status and to
measure a plan&#146;s assets and its obligations that determine its funded status as
of the end of the company&#146;s fiscal year, the offset of which is recorded, net of
tax, as a component of other comprehensive income in shareholders&#146; equity. FAS
158 was effective for the Company as of September 30, 2007 and applied
prospectively. The provisions of FAS 158 are not expected to have any impact on
the Company&#146;s financial statements. </p>
<p ALIGN="JUSTIFY">In September 2006, the FASB issued FASB statement No. 157, <i>
Fair Value Measurements </i>(&quot;FAS 157&quot;). FAS 157 establishes a single
authoritative definition of fair value, sets out a framework for measuring fair
value and expands on required disclosures about fair value measurement. FAS 157
is effective for the Company on October 1, 2008 and will be applied
prospectively. The provisions of FAS 157 are not expected to have a material
impact on the Company&#146;s financial statements. </p>
<p ALIGN="JUSTIFY">Other recent accounting pronouncements issued by the FASB
(including its Emerging Issues Task Force (&quot;EITF&quot;)), the American Institute of
Certified Public Accountants (&quot;AICPA&quot;), and the SEC did not or are not believed
by management to have a material impact on the Company's present or future
financial statements. </p>
<p align="justify">NOTE 2 &#150; GOING CONCERN </p>
<p ALIGN="JUSTIFY">The financial statements have been prepared on a going
concern basis, which contemplates realization of assets and liquidation of
liabilities in the ordinary course of business. The Company has continuously
incurred losses from operations and has a significant accumulated deficit. The
appropriateness of using the going concern basis is dependent upon the Company's
ability to obtain additional financing or equity
<font FACE="Times New Roman PSMT" SIZE="2">capital and, ultimately, to achieve
profitable operations. These conditions raise substantial doubt about its
ability to continue as a going concern. </p>
</font>
<p align="center">F-9 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'><b>
<p ALIGN="center">MB SOFTWARE CORPORATION AND SUBSIDIARY <br>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS <br>
YEARS ENDED DECEMBER 31 2007 AND 2006 </p>
</b></font><font FACE="Times New Roman PSMT" SIZE="2">
<p align="justify">It is the Company&#146;s belief that it will continue to incur
losses for at least the next twelve months, and as a result will require
additional funds from debt or equity investments to meet such needs. To meet
these objectives, management&#146;s plans are to (i) raise capital by obtaining funds
from debt financing and / or equity financing through private placement efforts,
(ii) issue common stock for services rendered in lieu of cash payments (iii)
convert outstanding debt to equity and (iii) obtain loans from shareholders.
Without realization of additional capital, it would be unlikely for the Company
to continue as a going concern. The Company anticipates that its shareholders
will contribute sufficient funds to satisfy the cash needs of the Company for
the next twelve months. However, there can be no assurances to that effect, as
the Company&#146;s need for capital may change dramatically if it is successful in
expanding its current business or acquiring a new business. If the Company
cannot obtain needed funds, it may be forced to curtail or cease its activities.
</p>
<p align="justify">Management believes that actions presently taken to revise
the Company&#146;s operating and financial requirements provide the opportunity for
the Company to continue as a going concern. The Company&#146;s future ability to
achieve these objectives cannot be determined at this time. The accompanying
financial statements do not include any adjustments that might result from the
outcome of this uncertainty. </p>
<p align="justify">NOTE 3 &#150; EXCLUSIVE LICENSE AGREEMENT </p>
<p align="justify">Effective November 28, 2007, Wound Care Innovations entered
into separate exclusive license agreements with Applied Nutritionals and its
founder George Petito, pursuant to which Wound Care Innovations obtained the
exclusive world-wide license to certain patented technologies and processes
related to CellerateRx products. </p>
<p align="justify">Wound Care Innovations had been marketing and selling
CellerateRx for the three previous years under the terms of a distribution
agreement that had been terminated in 2005. The new licenses are limited to the
human health care market for external wound care, and include any new product
developments based on the licensed patent and processes. The term of these
licenses extends through the life of the licensed patent. </p>
<p align="justify">In consideration for the licenses, Wound Care Innovations
agreed to pay to Applied Nutritionals and Mr. Petito the following royalties,
beginning January 3, 2008: (a) an advance royalty of $100,000 in the aggregate,
(b) an aggregate royalty of fifteen percent (15%) of gross sales occurring
during the first year of the license; (c) an additional advance royalty of
$400,000, in the aggregate, on January 3, 2009; plus (d) an aggregate royalty of
three percent (3%) of gross sales for all sales occurring after the payment of
the $400,000 advance royalty. In addition, after January 3, 2009, Wound Care
Innovations must maintain a minimum aggregate annual royalty payment of
$375,000. </p>
<p align="justify">All royalties, other than the advance royalty payments
described above, are due and payable on a calendar quarterly basis on or before
the forty-fifth (45<sup>th</sup>) day immediately following the calendar quarter
in which gross sales are received. </p>
<p align="justify">In connection with the above described license agreements, we
issued to Mr. George Petito 1,000 shares of a newly designated Series A
Convertible Preferred Stock. Each share of Series A Convertible Preferred Stock
will automatically convert into 5,100 shares of common stock upon the filing of
an <font SIZE="2">amendment to our Articles of Incorporation increasing our
authorized number of shares of common stock from 20,000,000 to 100,000,000. The
preferred stock participates with the common stock, on an as converted basis
with respect to dividends and liquidation, and votes together with the common
stock as a single class, as if such shares of preferred stock had been
converted. The preferred stock will automatically convert into an aggregate of
5,100,000 shares of common stock upon the filing an amendment to our Articles of
Incorporation increasing our authorized number of shares of common stock from
20,000,000 to 100,000,000. </p>
</font>
<p align="center">F-10 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font SIZE="2"><b>
<p ALIGN="center">MB SOFTWARE CORPORATION AND SUBSIDIARY <br>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS <br>
YEARS ENDED DECEMBER 31 2007 AND 2006 </p>
</b>
<p ALIGN="JUSTIFY">In addition to the license agreements, Wound Care Innovations
also entered into an exclusive manufacturing agreement with Applied Nutritionals
pursuant to which Applied Nutritionals will manufacture all CellerateRx and
related products for Wound Care Innovations. The term of the manufacturing
agreement extends through the life of the licensed patent; but may be terminated
by a successor in interest to Wound Care Innovations, provided that the
successor in interest has annual revenues of at least $100,000,000 or a market
capitalization of at least $200,000,000. </p>
<p>NOTE 4 &#150; RELATED PARTY TRANSACTIONS </p>
<b>
<p>Notes Payable </p>
</b>
<p ALIGN="JUSTIFY">Funds are advanced from various related parties including the
Company&#146;s President and CEO/CFO. Other shareholders fund the company as
necessary to meet working capital requirements and expenses. The advances are
made pursuant to a note agreement that bears interest at 10% per annum, payable
quarterly, and with maturity dates through December 31, 2008 per the table
below. All notes are current liabilities and some of the notes are currently in
default. Accrued interest due to related parties included in accrued liabilities
as of December 31, 2007 was approximately $274,680. The following is a summary
of amounts due to / from related parties as of December 31, 2007: </p>
</font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="AutoNumber1">
  <tr>
    <td width="25%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-left: 4; margin-right: 4">Related party </font></td>
    <td width="25%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-left: 4; margin-right: 4">Nature of relationship </font>
    </td>
    <td width="28%" align="center" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-left: 4; margin-right: 4">Terms of the agreement </font>
    </td>
    <td width="22%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font FACE="Times New Roman PSMT" SIZE="2">
    <p ALIGN="center">Amounts due to related parties </font></td>
  </tr>
  <tr>
    <td width="25%" style="border-top-style: solid; border-top-width: 1" valign="top" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-left: 4; margin-right: 4">Scott Haire, an individual </font>
    </td>
    <td width="25%" style="border-top-style: solid; border-top-width: 1" valign="top" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p ALIGN="JUSTIFY" style="margin-left: 4; margin-right: 4">Chairman of the
    Board, CEO and CFO of this Company </font></td>
    <td width="28%" style="border-top-style: solid; border-top-width: 1" valign="top" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p ALIGN="JUSTIFY" style="margin-left: 4; margin-right: 4">Unsecured note
    dated July 11, 2005 for $10,000 at 10% per annum, due on Dec 31, 2008 </font>
    </td>
    <td width="22%" align="center" style="border-top-style: solid; border-top-width: 1" valign="top" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-left: 4; margin-right: 4">$ 10,000 </font></td>
  </tr>
  <tr>
    <td width="25%" valign="top"><font SIZE="2">
    <p ALIGN="JUSTIFY" style="margin-left: 4; margin-right: 4">HEB, LLC, a
    Nevada Limited Liability Company </font></td>
    <td width="25%" valign="top"><font SIZE="2">
    <p style="margin-left: 4; margin-right: 4">Scott Haire, is a one-percent
    Member, but the managing member of HEB, LLC </font></td>
    <td width="28%" valign="top"><font SIZE="2">
    <p ALIGN="JUSTIFY" style="margin-left: 4; margin-right: 4">Series of funds
    advanced under two separate, unsecured $1 million lines of credit dated
    November 26, 2003 and November 4, 2004, both at 10% per annum; no maturity
    date, interest payable quarterly; unused lines available at December 31,
    2007 total $1,661,336. </font></td>
    <td width="22%" align="center" valign="top"><font SIZE="2">
    <p style="margin-left: 4; margin-right: 4">338,664 </p>
    </font>
    <p style="margin-left: 4; margin-right: 4">&nbsp;</p>
    <p style="margin-left: 4; margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td width="25%" valign="top" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 4; margin-right: 4">Araldo Cossutta, an individual
    </font></td>
    <td width="25%" valign="top" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 4; margin-right: 4">Director and stockholder of the
    Company </font></td>
    <td width="28%" valign="top" bgcolor="#E6E6E6"><font SIZE="2">
    <p ALIGN="JUSTIFY" style="margin-left: 4; margin-right: 4">Six separate,
    unsecured notes as follows: (i) $75,000 note dated September 30, 2004, at
    10% per annum, due Dec 31, 2008; (ii) $80,000 note dated September 14, 2005,
    at 10% per annum, due Dec 31, 2008; (iii) $350,000 note dated Oct.15, 2007
    at 10% per annum, due Dec 31, <font FACE="Times New Roman PSMT">2007 and
    (iv) $42,000 noted date April 5, 2005, at 10% per annum, due Dec 31, 2008
    and (v) $50,000 note dated January 4, 2006, at 10% per annum, due Dec. 31,
    2007 and (vi) $50,000 note dated January 31, 2006 due Dec. 31, 2007. </font>
    </font></td>
    <td width="22%" align="center" valign="top" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-left: 4; margin-right: 4">647,000 </p>
    </font>
    <p style="margin-left: 4; margin-right: 4">&nbsp;</p>
    <p style="margin-left: 4; margin-right: 4">&nbsp;</td>
  </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2">
<p align="center">F-11 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'><font SIZE="2"><b>
<p ALIGN="center">MB SOFTWARE CORPORATION AND SUBSIDIARY <br>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS <br>
YEARS ENDED DECEMBER 31 2007 AND 2006 </p>
</b></font></font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="AutoNumber2">
  <tr>
    <td width="25%" align="justify" valign="top"><font SIZE="2">
    <p style="margin-left: 4; margin-right: 4">eAppliance Payment Solutions, LLC
    a Nevada Limited Liability Company </font></td>
    <td width="25%" align="justify" valign="top"><font SIZE="2">
    <p style="margin-left: 4; margin-right: 4">Controlling owners in eAppliance
    Payment Solutions, LLC are Cossutta and Haire </font></td>
    <td width="25%" align="justify" valign="top"><font SIZE="2">
    <p style="margin-left: 4; margin-right: 4">Note dated January 1, 2004 for
    $2,410 at 10% per annum; $10,000 line of credit. </font></td>
    <td width="25%" align="center" valign="top"><font SIZE="2">2,410 </font>
    </td>
  </tr>
  <tr>
    <td width="25%" align="justify" valign="top" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-left: 4; margin-right: 4">Keystone Equity Partners </font>
    </td>
    <td width="25%" align="justify" valign="top" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-left: 4; margin-right: 4">Investors </font></td>
    <td width="25%" align="justify" valign="top" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p ALIGN="JUSTIFY" style="margin-left: 4; margin-right: 4">Note dated
    December 14, 2006 for $500,000 at 10% per annum; due Dec. 31, 2008 </font>
    </td>
    <td width="25%" align="center" valign="top" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">500,000 </font></td>
  </tr>
  <tr>
    <td width="25%" align="justify" valign="top">&nbsp;</td>
    <td width="25%" align="justify" valign="top">&nbsp;</td>
    <td width="25%" align="justify" valign="top">&nbsp;</td>
    <td width="25%" align="center" valign="top" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">$ 1,498,074 </font></td>
  </tr>
</table>
<font SIZE="2"><b>
<p>Notes Receivable </p>
</b>
<p ALIGN="JUSTIFY">During December 2007 the Company extended a Line of Credit to
HEB, LLC in the amount of $500,000. Interest is accrued on outstanding balances
at 10% per annum. At December 31, 2007 the amount advanced and receivable on the
Line was $81,650. </p>
<b>
<p>Administrative services </p>
</b>
<p>The Company provides limited administrative services to other companies
affiliated through common ownership of the Company&#146;s shareholders. </p>
<p>NOTE 5 &#150; FIXED ASSETS </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="50%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="70%"><font SIZE="2">Fixed assets consists of the following:</font></td>
    <td WIDTH="6%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="24%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%">&nbsp;</td>
    <td WIDTH="6%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="24%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Furniture and fixtures</font></td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="24%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">13,607</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Phone system</font></td>
    <td WIDTH="6%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="24%" align="right"><font SIZE="2">
    <p style="margin-right: 4">13,302</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Computer equipment</font></td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="24%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">11,796</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Artwork</font></td>
    <td WIDTH="6%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="24%" align="right"><font SIZE="2">
    <p style="margin-right: 4">30,000</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Web-Site</font></td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="24%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">16,430</font></td>
  </tr>
  <tr>
    <td WIDTH="70%">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="24%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">85,135</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Less accumulated
    depreciation</font></td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="24%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(61,799)</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Net book value</font></td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="24%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">23,336</font></td>
  </tr>
</table>
<font SIZE="2">
<p>NOTE 6 &#150; COMMITMENTS AND CONTINGENCIES </p>
<b>
<p>Consulting Agreement </p>
</b>
<p>The Company&#146;s subsdiary entered into a Consulting Agreement dated November
15, 2007, for consulting and development of customers and delivery of
presentations, payment shall be $7,383.34 per month. The Agreement<i> </i>
</font><font SIZE="2" FACE="Times New Roman PSMT">can be terminated by either
party with a two week notice. </p>
</font><font SIZE="2">
<p align="center">F-12 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font SIZE="2" FACE="Times New Roman PSMT">
<b>
<p ALIGN="center">MB SOFTWARE CORPORATION AND SUBSIDIARY <br>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS <br>
YEARS ENDED DECEMBER 31 2007 AND 2006 </p>
</b></font><font SIZE="2"><b>
<p>Operating leases </p>
</b>
<p ALIGN="JUSTIFY">The Company leases office space and office equipment under
operating leases expiring in various years through 2009. Rental expense charged
to operations for 2007 was approximately $96,077 (2006: $109,500). Minimum
future rental payments under non-cancelable operating leases having remaining
terms in excess of 1 year as of December 31, 2007, for each of the next five
years and in the aggregate are as follows: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="50%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">2008</font></td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="24%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">56,636</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">2009</font></td>
    <td WIDTH="6%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="24%" align="right"><font SIZE="2">
    <p style="margin-right: 4">39,441</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">2010</font></td>
    <td WIDTH="6%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="24%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="70%">&nbsp;</td>
    <td WIDTH="6%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="24%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">96,077</font></td>
  </tr>
</table>
<font SIZE="2"><b>
<p>Federal Payroll Taxes </p>
</b>
<p ALIGN="JUSTIFY">The Company is delinquent in the payment of its payroll tax
liabilities with the Internal Revenue Service. As of December 31, 2007, unpaid
payroll taxes total approximately $203,484 and related penalties and interest
approximated $123,000 computed through December 31, 2007. These liabilities have
been recorded as accrued liabilities and general and administrative expenses at
December 31, 2007. The Company expects to pay these delinquent payroll tax
liabilities as soon as possible. The final amount due will be subject to the
statutes of limitations related to such liabilities and to negotiations with the
Internal Revenue Service. </p>
<p>NOTE 7 &#150;NOTES PAYABLE </p>
<p>The Company has entered into the following non-related party notes payable:
</p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="33%" align="center"><font SIZE="2">
    <p align="left">Island Capital</font></td>
    <td WIDTH="33%" align="center"><font SIZE="2">Dated November 14, 2007</font></td>
    <td WIDTH="17%" align="center">&nbsp;</td>
    <td WIDTH="17%" align="center"><font SIZE="2">
    <p align="right" style="margin-right: 4">$10,000.00</font></td>
  </tr>
  <tr>
    <td WIDTH="33%" align="center">&nbsp;</td>
    <td WIDTH="33%" align="center"><font SIZE="2">Due March 31, 2008</font></td>
    <td WIDTH="17%" align="center">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="17%" align="center">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="67%" COLSPAN="2" bgcolor="#E6E6E6"><font SIZE="2">Related Party
    Notes Payable (See Note 4)</font></td>
    <td WIDTH="17%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="17%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">1,498,074.00</font></td>
  </tr>
  <tr>
    <td WIDTH="33%"><font SIZE="2">Total Note Payable</font></td>
    <td WIDTH="33%">&nbsp;</td>
    <td WIDTH="17%" align="right">&nbsp;</td>
    <td WIDTH="17%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">1,508,074.00</font></td>
  </tr>
  <tr>
    <td WIDTH="33%" bgcolor="#E6E6E6"><font SIZE="2">Less Current Portions</font></td>
    <td WIDTH="33%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="17%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="17%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2">(1,508,074.00)</font></td>
  </tr>
  <tr>
    <td WIDTH="33%"><font SIZE="2">Total Long-Term Debt</font></td>
    <td WIDTH="33%">&nbsp;</td>
    <td WIDTH="17%" align="right">&nbsp;</td>
    <td WIDTH="17%" align="right" style="border-top-style: none; border-top-width: medium">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
</table>
<font SIZE="2">
<p>NOTE 8 &#150; STOCKHOLDERS&#146; EQUITY TRANSACTIONS </p>
<b>
<p>Common stock issued </p>
</b>
<p>At December 31, 2007 and 2006 the Company had 16,145,432 shares of common
stock issued and 16,141,343 outstanding. Of these shares, 4,089 shares are held
by the Company as treasury stock. </p>
<p align="center">F-13 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font SIZE="2" FACE="Times New Roman PSMT">
<b>
<p ALIGN="center">MB SOFTWARE CORPORATION AND SUBSIDIARY <br>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS <br>
YEARS ENDED DECEMBER 31 2007 AND 2006 </p>
</b></font><font SIZE="2"><b>
<p align="justify">Preferred Stock Issued </p>
</b>
<p align="justify">Each share of Series A Convertible Preferred Stock will
automatically convert into 5,100 shares of common stock upon the filing of an
amendment to our Articles of Incorporation increasing our authorized number of
shares of common stock from 20,000,000 to 100,000,000. The preferred stock
participates with the common stock, on an as converted basis with respect to
dividends and liquidation, and votes together with the common stock as a single
class, as if such shares of preferred stock had been converted. The preferred
stock will automatically convert into an aggregate of 5,100,000 shares of common
stock upon the filing an amendment to our Articles of Incorporation increasing
our authorized number of shares of common stock from 20,000,000 to 100,000,000.
</p>
<p align="justify">Effective November 28, 2007, in connection with the entry by
Wound Care Innovations into certain license agreements with Applied Nutritionals
and Mr. George Petito, The Company issued to Mr. George Petito 1,000 shares of a
newly designated Series A Convertible Preferred Stock. </p>
<p align="justify">Effective January 1, 2008, the Company issued 490.196 shares
of our Series A Convertible Preferred Stock to Keystone Equity Partners in
exchange for the cancellation of approximately $1,500,000 in debt. (See Note
12).<b> </p>
</b>
<p align="justify">NOTE 9 &#150; CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS </p>
<b>
<p align="justify">Major Customers and Trade Receivables </p>
</b>
<p align="justify">The Company has 5 customers in 2007 (2006: 4 customers) that
each account for more than 10% of its revenues. Trade receivables from these
customers totaled approximately $24,618 or 73% of total accounts receivable
balance at December 31, 2007, and were unsecured. </p>
<p align="justify">NOTE 10 &#150; CONCENTRATION OF SUPPLIER RISK </p>
<p align="justify">The Company purchases substantially all of its powders and
gels from one vendor. If this vendor became unable to provide materials in a
timely manner and the Company was unable to find alternative vendors, the
Company's business, operating results and financial condition would be
materially adversely affected. </p>
<p align="justify">NOTE 11 &#150; INCOME TAXES </p>
<p align="justify">The deferred tax consequences of temporary differences in
reporting items for financial statement and income tax purposes are recognized,
as appropriate. Realization of the future tax benefits related to the deferred
tax assets is dependent on many factors, including the Company&#146;s ability to
generate taxable income within the net operating loss carry forward period.
Management has considered these factors in reaching its conclusion as to the
valuation allowance for financial reporting purposes. </p>
<p align="justify">At December 31, 2007, deferred tax asset results from the
deferred tax benefit of net operating losses. The net current and non-current
deferred tax assets have a 100% valuation allowance, as the ability of the
Company to generate sufficient taxable income in the future is uncertain. The
net change in the valuation allowance for 2007 was approximately $118,000 (2006:
$200,000). </p>
<p align="justify">The Company generated net operating losses for financial
reporting and Federal income tax reporting prior to its reorganization in 1993.
As of December 31, 2005, subject to limitations under Internal </p>
<p align="center">F-14 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font SIZE="2" FACE="Times New Roman PSMT">
<b>
<p ALIGN="center">MB SOFTWARE CORPORATION AND SUBSIDIARY <br>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS <br>
YEARS ENDED DECEMBER 31 2007 AND 2006 </p>
</b>
<p ALIGN="JUSTIFY">Revenue Code Section 382, approximately $437,000 of these
losses is available for use after the reorganization, which expire in 2008 if
not previously utilized. The net operating loss carry forward at December 31,
2007 is approximately $12,700,000 and will begin to expire in 2008, if not
utilized. </p>
<p>A reconciliation of expected federal income tax expense (benefit) based on
the U.S. Corporate income tax rate of 34% to actual expense (benefit) for 2007
and 2006 is as follows (rounded): </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="65%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="33%">&nbsp;</td>
    <td WIDTH="23%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>
    <p style="margin-right: 4">2007</b></font></td>
    <td WIDTH="2%">&nbsp;</td>
    <td WIDTH="23%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>
    <p style="margin-right: 4">2006</b></font></td>
  </tr>
  <tr>
    <td WIDTH="33%" bgcolor="#E6E6E6"><font SIZE="2">Expected federal income tax
    benefit</font></td>
    <td WIDTH="23%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">$ 184,500</font></td>
    <td WIDTH="2%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="23%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">$ 212,000</font></td>
  </tr>
  <tr>
    <td WIDTH="33%"><font SIZE="2">Valuation allowance and other</font></td>
    <td WIDTH="23%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(184,500)</font></td>
    <td WIDTH="2%">&nbsp;</td>
    <td WIDTH="23%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(212,000)</font></td>
  </tr>
  <tr>
    <td WIDTH="33%" bgcolor="#E6E6E6"><font SIZE="2">Income tax expense
    (benefit)</font></td>
    <td WIDTH="23%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="2%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="23%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2">
<p>Deferred tax asset at December 31, 2007, is as follows: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="45%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="58%" bgcolor="#E6E6E6"><font SIZE="2">Net operating loss carry
    forwards</font></td>
    <td WIDTH="5%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="37%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">4,318,000</font></td>
  </tr>
  <tr>
    <td WIDTH="58%"><font SIZE="2">Valuation allowance</font></td>
    <td WIDTH="5%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="37%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">(4,318,000)</font></td>
  </tr>
  <tr>
    <td WIDTH="58%" bgcolor="#E6E6E6"><font SIZE="2">Net current deferred tax
    asset</font></td>
    <td WIDTH="5%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="37%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
</table>
<font SIZE="2">
<p align="justify">NOTE 12-SUBSQUENT EVENTS </p>
<p align="justify">Subsequent to year end the Company issued 86,207 shares of
common stock and warrants to purchase an additional 1,500,000 shares of common
stock for cash of $50,000 or approximately $0.58 per share. </p>
<p align="justify">Subsequent to year end the Company issued 500,000 shares of
common stock for services. </p>
<p ALIGN="JUSTIFY">Subsequent to year end the Company issued an 8% convertible
promissory note for cash of $700,000. The note converts to 1,206,897 shares of
common stock subject to adjustments based on EPS and will be issued within 120
days of the issuance of the Registration Statement. </p>
<p align="justify">Effective January 1, 2008, the Company issued 490.196 shares
of our Series A Convertible Preferred Stock to Keystone Equity Partners in
exchange for the cancellation of approximately $1,500,000 in debt.<b> </p>
</b>
<p align="justify">NOTE 13-LOSS PER SHARE </p>
<p align="justify">The following data show the amounts used in computing loss
per share for the periods presented: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="70%">&nbsp;</td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">2007</font></td>
    <td WIDTH="15%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">2006</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2"><u>Loss available to common
    shareholders (numerator</u></font></td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$(542,756)</font></td>
    <td WIDTH="15%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">$(623,559)</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Weighted average number of common shares</font></td>
    <td WIDTH="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Outstanding during the period used in loss
    per</font></td>
    <td WIDTH="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="15%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Share (denominator)</font></td>
    <td WIDTH="15%" align="right"><font SIZE="2">
    <p style="margin-right: 4">16,141,343</font></td>
    <td WIDTH="15%" align="right"><font SIZE="2">
    <p style="margin-right: 4">16,141,343</font></td>
  </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2">
<p>Dilutive loss per share is not presented, as the Company had no common
equivalent shares for all periods presented that would affect the computation of
diluted loss per share. </p>
<p align="center">F-15 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font FACE="Times New Roman PS" SIZE="2">
<p align="center">MB SOFTWARE CORPORATION AND SUBSIDIARY <br>
CONSOLIDATED BALANCE SHEETS <br>
MARCH 31, 2008 (UNAUDITED) AND DECEMBER 31, 2007 (AUDITED) </p>
</font></b>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="68%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="15%" colspan="2" align="center" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">UNAUDITED</font></td>
    <td WIDTH="2%" align="center" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="15%" align="center" colspan="2" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">AUDITED</font></td>
  </tr>
  <tr>
    <td WIDTH="68%">&nbsp;</td>
    <td WIDTH="15%" colspan="2" align="center"><font SIZE="2">March 31,</font></td>
    <td WIDTH="2%" align="center">&nbsp;</td>
    <td WIDTH="15%" align="center" colspan="2"><font SIZE="2">December 31,</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b>ASSETS</b></font></td>
    <td WIDTH="15%" style="border-bottom-style: solid; border-bottom-width: 1" colspan="2" align="center">
    <font SIZE="2">&nbsp;2008</font></td>
    <td WIDTH="2%" align="center">&nbsp;</td>
    <td WIDTH="15%" align="center" style="border-bottom-style: solid; border-bottom-width: 1" colspan="2">
    <font SIZE="2">2007</font></td>
  </tr>
  <tr>
    <td WIDTH="68%">&nbsp;</td>
    <td WIDTH="3%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="2%">&nbsp;</td>
    <td WIDTH="3%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b>CURRENT ASSETS:</b></font></td>
    <td WIDTH="3%">&nbsp;</td>
    <td WIDTH="12%">&nbsp;</td>
    <td WIDTH="2%">&nbsp;</td>
    <td WIDTH="3%">&nbsp;</td>
    <td WIDTH="12%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">Cash</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">406,327</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">781</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">Accounts Receivable, less doubtful accounts</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">28,089</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">24,668</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">Notes Receivable</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">542,950</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">81,650</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">Inventory, less reserve for obsolescence</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">248,682</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">263,276</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">Total current assets</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">1,226,048</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">370,375</font></td>
  </tr>
  <tr>
    <td WIDTH="68%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b>Property and Equipment, Net</b></font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">22,252</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">23,335</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">Other Assets</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">12,020</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">12,020</font></td>
  </tr>
  <tr>
    <td WIDTH="68%">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b>TOTAL ASSETS</b></font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2"><b>
    <p style="margin-right: 4">$</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">1,260,320</font></td>
    <td WIDTH="2%" align="right">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">405,730</font></td>
  </tr>
</table>
<font FACE="Times New Roman PS" SIZE="2"><b>
<p><u>LIABILITIES AND STOCKHOLDERS' DEFICIENCY</u></b></font><font FACE="Times New Roman PSMT" SIZE="3">
</p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b>CURRENT LIABILITIES:</b></font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">Accounts payable</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">59,295</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">110,107</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">Accrued liabilities</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">326,649</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">326,649</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">Accrued interest-related
    parties</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">271,345</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">274,680</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">Notes payable</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">710,000</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">10,000</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">Note payable -related
    parties</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">214,380</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">1,498,074</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">Total current liabilities</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">1,581,669</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">2,219,510</font></td>
  </tr>
  <tr>
    <td WIDTH="68%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2"><b>Long Term Liabilities</b></font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b>TOTAL LIABILITIES</b></font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">1,581,669</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">2,219,510</font></td>
  </tr>
  <tr>
    <td WIDTH="68%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b>Stockholders' Deficiency</b></font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">Preferred stock, $10 par value, 5,000,000</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 6%">shares authorized; None</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 6%">issued and outstanding</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">14,902</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">10,000</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">
    <p style="margin-left: 3%">Common stock: $0.001 par value; 20,000,000</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">
    <p style="margin-left: 6%">shares authorized;</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">
    <p style="margin-left: 6%">17,099,781 issued and 17,085,692 outstanding</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">
    <p style="margin-left: 6%">as of March 31, 2008 and 16,145,432 issued</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">
    <p style="margin-left: 6%">and 16,141,343 outstanding as of December</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">
    <p style="margin-left: 6%">31, 2007</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">17,099</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">16,145</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">Additional paid-in capital</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">13,011,304</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">11,171,496</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">Treasury Stock</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
</table>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(12,039)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(12,039)</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">Accumulated deficit</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">(13,352,615)</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">(12,999,382)</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">Total stockholders
    deficiency</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2">(321,349)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2">(1,813,780)</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b>TOTAL LIABILITIES AND</b></font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b>STOCKHOLDERS' DEFICIENCY</b></font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2"><b>
    <p style="margin-right: 4">$</b></font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">1,260,320</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">405,730</font></td>
  </tr>
</table>
<font SIZE="2">
<p align="center">The accompanying notes are an integral part of these
consolidated financial statements.<b> </p>
</b>
<p align="center">F-16 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font SIZE="2">
<p ALIGN="CENTER">MB SOFTWARE CORPORATION AND SUBSIDIARY</font></b><font size="2">
<br>
</font><b><font size="2">UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS <br>
FOR THE THREE MONTHS ENDED MARCH 31:</font></b><font SIZE="2"> </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="68%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2"><b>REVENUES:</b></font></td>
    <td WIDTH="15%" colspan="2" align="center" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>2008</b></font></td>
    <td WIDTH="2%" align="center" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td WIDTH="15%" colspan="2" align="center" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>2007</b></font></td>
  </tr>
  <tr>
    <td WIDTH="68%">&nbsp;</td>
    <td WIDTH="3%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="2%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="3%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2"><b>Total Revenue</b></font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><b>
    <p style="margin-right: 4">$</b></font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">63,270</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">83,941</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b>COST OF SALES:</b></font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">148,236</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">26,999</font></td>
  </tr>
  <tr>
    <td WIDTH="68%">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2"><b>Gross Profit</b></font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(84,966)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">56,942</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b>GENERAL AND ADMINISTRATIVE</b></font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b>EXPENSES:</b></font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">General and Administrative
    Expenses</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">271,602</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">202,102</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">Depreciation</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">1,084</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2"><b>LOSS FROM CONTINUING
    OPERATIONS:</b></font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(356,568)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(145,160)</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b>OTHER INCOME (Expenses):</b></font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">Interest (expense)</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(13,406)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(28,093)</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">Interest Income</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">16,741</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">Total Other
    Income/(Expense)</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">3,335</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(28,093)</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b>LOSS BEFORE INCOME TAXES</b></font></td>
    <td WIDTH="3%" align="right"><font SIZE="2"><b>
    <p style="margin-right: 4">$</b></font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">(353,233)</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">(173,253)</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">Current tax expense</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">
    <p style="margin-left: 3%">Deferred tax expense</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2"><b>NET LOSS</b></font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2"><b>
    <p style="margin-right: 4">$</b></font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(353,233)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(173,253)</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">Basic and diluted loss per share of common</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">stock:</font></td>
    <td WIDTH="3%" align="right"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">(0.02)</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right"><font SIZE="2">(0.01)</font></td>
  </tr>
  <tr>
    <td WIDTH="68%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">Weighted average number of
    common shares</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">outstanding</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">16,844,585</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">16,141,343</font></td>
  </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2">
<p align="center">The accompanying notes are an integral part of these
consolidated financial statements </p>
<p align="center">F-17</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font SIZE="2">
<p ALIGN="CENTER">MB SOFTWARE CORPORATION AND SUBSIDIARY <br>
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS <br>
FOR THE THREE MONTHS ENDED MARCH 31:</font></b><font SIZE="2"> </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="68%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="15%" colspan="2" align="center" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>2008</b></font></td>
    <td WIDTH="2%" align="center" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="15%" colspan="2" align="center" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2"><b>2007</b></font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b><u>Cash flows from operating activities</u></b></font></td>
    <td WIDTH="3%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="2%">&nbsp;</td>
    <td WIDTH="3%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
    <td WIDTH="12%" style="border-top-style: solid; border-top-width: 1">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">Net loss from continuing
    operations</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2"><sup>
    <p style="margin-right: 4">$</sup></font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(353,233)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(173,253)</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">
    <p style="margin-left: 3%">Adjustments to reconcile net loss from to net
    cash used in</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">operating activities</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">Depreciation and amortization</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">1,084</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">2,168</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">Stock paid for services</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">50,000</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">Changes in assets and liabilities:</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">(Increase) decrease in accounts receivable</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(3,421)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">2,641</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">
    <p style="margin-left: 3%">(Increase) decrease in inventory</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">14,593</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">18,731</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">(Increase) decrease in prepaid expenses and other
    assets</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">(133,967)</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">
    <p style="margin-left: 3%">Increase (decrease) in accounts payable and
    accrued liabilities</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">(50,812)</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">130,523</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">Increase (decrease) in royalties payable,
    including related accrued</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">interest</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(3,335)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">28,093</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">Net cash flows used in operating activities</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(345,124)</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(125,064)</font></td>
  </tr>
  <tr>
    <td WIDTH="68%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b><u>Cash flows from investing activities</u></b></font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">Increase in line of credit</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">(461,300)</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">Net cash flows used in investing activities</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">(461,300)</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="68%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b><u>Cash flows from financing activities</u></b></font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">Principal payments under capital lease obligation</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">
    <p style="margin-left: 3%">Net advances &#150; related parties-line of credit</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">211,970</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">17,449</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">Proceeds from unrelated party notes payable</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">700,000</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">
    <p style="margin-left: 3%">Sale of stock for cash</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">300,000</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">Net cash flows provided by
    financing activities</font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">1,211,970</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">17,449</font></td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b>Increase (decrease) in cash</b></font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">405,546</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">(107,615)</font></td>
  </tr>
  <tr>
    <td WIDTH="68%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2"><b>Cash and cash
    equivalents, beginning of period</b></font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">781</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: solid; border-bottom-width: 1" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">236,301</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b>Cash and cash equivalents, end of period</b></font></td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">406,327</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">128,686</font></td>
  </tr>
  <tr>
    <td WIDTH="68%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2"><b><u>Cash paid during the period for:</u></b></font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 3%">Interest</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="2%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">
    <p style="margin-left: 3%">Income taxes</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right"><font SIZE="2">
    <p style="margin-right: 4">-</font></td>
  </tr>
  <tr>
    <td WIDTH="68%">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">Supplemental Non-cash investing and financing
    activities:</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">
    <p style="margin-left: 3%">For the three months ended March 31, 2008:</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">
    <p style="margin-left: 6%">The Company issued 490.196 shares of Series A
    Preferred</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="68%"><font SIZE="2">
    <p style="margin-left: 6%">Stock for debt reduction of $1,495,664</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="2%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
</table>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td><font FACE="Times New Roman PSMT" SIZE="2">
    <p style="margin-left: 3%">For the three months ended March 31, 2007:</font></td>
  </tr>
  <tr>
    <td><font FACE="Times New Roman PSMT" SIZE="2">
    <p style="margin-left: 6%">None</font></td>
  </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2">
<p align="center">The accompanying notes are an integral part of these
consolidated financial statements.</p>
<p align="center">F-18</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font size="2">
<p align="center">MB SOFTWARE CORPORATION AND SUBSIDIARY <br>
QUARTER ENDED MARCH 31, 2008 <br>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</font></b><font SIZE="2">
</p>
</font><hr color="#000000"><font FACE="Times New Roman PSMT" SIZE="2">
<p align="justify">NOTE 1- BASIS OF PRESENTATION </p>
<p align="justify">The accompanying unaudited consolidated financial statements
have been prepared in accordance with accounting principles generally accepted
in the United States of America for interim financial information and with the
instructions to Form 10-Q. They do not include all information and notes
required by accounting principles generally accepted in the United States of
America for complete financial statements. </p>
<p align="justify">In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows for all periods presented have
been made. Preparing financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities, revenue
and expenses. Actual results may differ from these estimates. The results of
operations for the period ended March 31, 2008 are not necessarily indicative of
the operating results that may be expected for the entire year ending December
31, 2008. These financial statements should be read in conjunction with the
Management's Discussion and Analysis and with the Company's financial statements
and accompanying notes thereto as of and for the year ended December 31, 2007,
filed with the Company's Annual Report on Form 10-K. </p>
<p align="justify">NOTE 2- GOING CONCERN </p>
<p align="justify">The financial statements have been prepared on a going
concern basis, which contemplates realization of assets and liquidation of
liabilities in the ordinary course of business. The Company has continuously
incurred losses from operations and has a significant accumulated deficit. The
appropriateness of using the going concern basis is dependent upon the Company's
ability to obtain additional financing or equity capital and, ultimately, to
achieve profitable operations. These conditions raise substantial doubt about
its ability to continue as a going concern. </p>
<p align="justify">It is the Company's belief that it will continue to incur
losses for at least the next twelve months, and as a result will require
additional funds from debt or equity investments to meet such needs. To meet
these objectives, management's plans are to (i) raise capital by obtaining
financing from debt financing and / or equity financing through private
placement efforts, (ii) issue common stock for services rendered in lieu of cash
payments and (iii) obtain loans from shareholders as necessary. Without
realization of additional capital or significant revenues from operations, it
would be unlikely for the Company to continue as a going concern. The Company
anticipates that its shareholders will contribute sufficient funds to satisfy
the cash needs of the Company for the next twelve months. However, there can be
no assurances to that effect, as the Company has minimal revenues and the
Company's need for capital may change dramatically if it is successful in
expanding its current business or acquiring a new business. If the Company
cannot obtain needed funds, it may be forced to curtail or cease its activities.
</p>
<p align="justify">Management believes that actions presently taken to revise
the Company's operating and financial requirements provide the opportunity for
the Company to continue as a going concern. The Company's future ability to
achieve these objectives cannot be determined at this time. The accompanying
financial statements do not include any adjustments that might result from the
outcome of this uncertainty. </p>
<p align="center">F-19</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font size="2">
<p align="center">MB SOFTWARE CORPORATION AND SUBSIDIARY <br>
QUARTER ENDED MARCH 31, 2008 <br>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</font></b><font SIZE="2">
</p>
<hr color="#000000"></font><font FACE="Times New Roman PSMT" SIZE="2">
<p>NOTE 3 &#150; CURRENT NOTES PAYABLE </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="70%">&nbsp;</td>
    <td WIDTH="15%" colspan="2" align="center"><font SIZE="2">Accrued</font></td>
    <td WIDTH="15%" align="center" colspan="2"><font SIZE="2">Total</font></td>
  </tr>
  <tr>
    <td WIDTH="70%">&nbsp;</td>
    <td WIDTH="15%" colspan="2" align="center"><font SIZE="2"><u>Interest</u></font></td>
    <td WIDTH="15%" align="center" colspan="2"><font SIZE="2"><u>Debt</u></font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6"><font SIZE="2">Island Capital</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">358</font></td>
    <td WIDTH="3%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-right: 4">10,000</font></td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">Investment Firm, unsecured, payable on March
    31, 2008</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">
    <p style="margin-left: 3%">including interest at 10% per annum, currently in</font></td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="3%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right">
    <p style="margin-right: 4">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="70%"><font SIZE="2">
    <p style="margin-left: 3%">default</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">9,333</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <p style="margin-right: 4">&nbsp;</td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3">
    <font SIZE="2">
    <p style="margin-right: 4">700,000</font></td>
  </tr>
  <tr>
    <td WIDTH="70%" bgcolor="#E6E6E6">&nbsp;</td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">9,691</font></td>
    <td WIDTH="3%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">$</font></td>
    <td WIDTH="12%" align="right" style="border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2">
    <p style="margin-right: 4">710,000</font></td>
  </tr>
</table>
<font SIZE="2">
<p>NOTE 4 &#150; RELATED PARTY NOTES PAYABLE AND OTHER TRANSACTIONS </p>
<b>
<p>Notes Payable </p>
</b>
<p ALIGN="JUSTIFY">Funds are advanced from various related parties including the
Company&#146;s President and CEO/CFO. Other shareholders fund the company as
necessary to meet working capital requirements and expenses. The advances are
made pursuant to a note agreement that bears interest at 10% per annum, payable
quarterly, and with maturity dates through March 31, 2008 per the table below.
All notes are current liabilities and some of the notes are currently in
default. Accrued interest due to related parties included in accrued liabilities
as of March 31, 2008 was approximately $271,345. The following is a summary of
amounts due to / from related parties as of March 31, 2008: </p>
</font>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="AutoNumber3">
  <tr>
    <td width="28%" valign="top" align="center"><font size="2">Related party</font></td>
    <td width="28%" valign="top" align="center"><font size="2">Nature of
    relationship</font></td>
    <td width="28%" valign="top" align="center"><font size="2">Terms of the
    agreement </font></td>
    <td width="15%" valign="top" colspan="2"><font SIZE="2"><b>
    <p ALIGN="CENTER">Amounts due to related parties </b></font></td>
  </tr>
  <tr>
    <td width="28%" valign="top" bgcolor="#E6E6E6"><font SIZE="2">
    <p ALIGN="JUSTIFY" style="margin-left: 4; margin-right: 4">HEB, LLC, a
    Nevada Limited Liability Company </font></td>
    <td width="28%" valign="top" bgcolor="#E6E6E6"><font SIZE="2">
    <p style="margin-left: 4; margin-right: 4">Scott Haire, is a one-percent
    Member, but the managing member of HEB, LLC </font></td>
    <td width="28%" valign="top" bgcolor="#E6E6E6"><font SIZE="2">
    <p ALIGN="JUSTIFY" style="margin-left: 4; margin-right: 4">Series of funds
    advanced under two separate, unsecured $1 million lines of credit dated
    November 26, 2003 and November 4, 2004, both at 10% per annum; no maturity
    date, interest payable quarterly; unused lines available at March 31, 2008
    total $1,788,030. </font></td>
    <td width="3%" valign="top" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td width="12%" valign="top" align="right" bgcolor="#E6E6E6"><font SIZE="2">
    211,970 </font></td>
  </tr>
  <tr>
    <td width="28%" valign="top"><font SIZE="2">
    <p style="margin-left: 4; margin-right: 4">eAppliance Payment Solutions, LLC
    a Nevada Limited Liability Company </font></td>
    <td width="28%" valign="top"><font SIZE="2">
    <p ALIGN="JUSTIFY" style="margin-left: 4; margin-right: 4">Controlling
    owners in eAppliance Payment Solutions, LLC are Cossutta and Haire </font>
    </td>
    <td width="28%" valign="top"><font SIZE="2">
    <p style="margin-left: 4; margin-right: 4">Note dated January 1, 2004 for
    $2,410 at 10% per annum; $10,000 line of credit. </font></td>
    <td width="3%" valign="top" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</td>
    <td width="12%" valign="top" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">2,410 </font></td>
  </tr>
  <tr>
    <td width="28%" valign="top" bgcolor="#E6E6E6">&nbsp;</td>
    <td width="28%" valign="top" bgcolor="#E6E6E6">&nbsp;</td>
    <td width="28%" valign="top" bgcolor="#E6E6E6">&nbsp;</td>
    <td width="3%" valign="top" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2">$</font></td>
    <td width="12%" valign="top" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: double; border-bottom-width: 3" bgcolor="#E6E6E6">
    <font SIZE="2">214,380 </font></td>
  </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2">
<p align="center">F-20</p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font size="2">
<p align="center">MB SOFTWARE CORPORATION AND SUBSIDIARY <br>
QUARTER ENDED MARCH 31, 2008 <br>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</font></b><font SIZE="2">
</p>
<hr color="#000000"><b>
<p>Notes Receivable </p>
</b>
<p ALIGN="JUSTIFY">During January 2008, the Company extended a Line of Credit to
HEB, LLC in the amount of $1,000,000. Interest is accrued on outstanding
balances at 10% per annum. At March 31, 2008 the amount advanced and receivable
on the Line was $542,950, with interest income of $16,741 and $0 for the three
months ended March 31, 2008 and March 31, 2007, respectively. </p>
<p>NOTE 5- STOCK ISSUANCES </p>
<p ALIGN="JUSTIFY">Effective January 1, 2008 the Company issued 490.196 shares
of $10.00 par value preferred stock for related party debt totaling $1,495,664
or $3,051.15 per share. The following notes payable and lines of credit were
converted: Scott Haire $10,000 note dated July 11, 2005, at 10% per annum, due
December 31, 2008; Araldo Cossutta six separate, unsecured notes as follows: (i)$75,000
note dated September 30, 2004, at 10% per annum, due December 31, 2008;
(ii)$80,000 note dated September 14, 2005, at 10% per annum, due December 31,
2008; (iii) $350,000 note dated October 15, 2007 at 10% per annum, due December
31, 2008; (iv) $42,000note dated April 5, 2005 at 10% per annum, due December
31, 2008; (v) $50,000 note dated January 4, 2006, at 10% per annum , due
December 31, 2008 and (vi) $50,000 note dated January 31, 2006 due December 31,
2008. Series of funds advanced $338,664 under two separate, unsecured $ 1
million lines of credit dated November 26, 2003 and November 4, 2004, both from
HEB, LLC at 10% per annum; no maturity date, interest payable quarterly; unused
lines available at December 31, 2007 total $211,970 (see note 4). Keystone
Equity Partners Investors note dated December 14, 2006 for $500,000 at 10% per
annum; due December 31, 2008. </p>
<p ALIGN="JUSTIFY">On January 11, 2008, the Company issued 86,702 shares of
common stock for cash of $50,000 or $.58 per share. Of the $50,000 received by
the Company through the sale of share of common stock and warrants to T Squared,
$2,717 of the purchase price was allocated to the common stock and $47,283 was
allocated to the warrants. </p>
<p>On January 21, 2008, the Company issued 500,000 shares of common stock for
services valued at $50,000 or $.10 per share. </p>
<p ALIGN="JUSTIFY">On January 31, 2008, the Company entered into a subscription
agreement to issue 367,647 shares of common stock for cash of $250,000 or $.68
per shares. The Company has received payment on the agreement but hasn&#146;t issued
the stock as of March 31, 2008. </p>
<p>NOTE 6-SUBSEQUENT EVENTS </p>
<p ALIGN="JUSTIFY">On May 27, 2008 the Company amended its Articles of
Incorporation which resulted in a name change to Wound Management Technologies,
Inc. and an increase in authorized common stock to 100,000,000 shares. As a
result of the amendment, 1,490.196 shares of preferred stock were automatically
converted into 7,600,000 shares of common stock. </p>
<p align="center">F-21 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font FACE="Times New Roman PSMT" SIZE="2">
<p ALIGN="JUSTIFY">NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT MADE IN THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY MB SOFTWARE OR THE SELLING SHAREHOLDERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO
BUY ANY OF THE COMMON STOCK OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF MB
SOFTWARE SINCE SUCH DATE. </p>
<p align="center">39 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font size="2">
<p align="center">PART II </p>
<p align="center">INFORMATION NOT REQUIRED IN PROSPECTUS </p>
</font><font SIZE="2" FACE="Times New Roman PS">
<p>O</font><font SIZE="2">THER EXPENSES OF ISSUANCE AND DISTRIBUTION </p>
</font></b><font SIZE="2">
<p style="text-indent: 3%">Expenses incurred or (expected) relating to this
Registration Statement and distribution are as follows: The amounts set forth
are estimates except for the SEC registration fee: </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="50%" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0">
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="53%"><font SIZE="2">Amount</font></td>
    <td WIDTH="6%" align="right">&nbsp;</td>
    <td WIDTH="24%" align="right">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="53%" bgcolor="#E6E6E6"><font SIZE="2"><font face="Wingdings">&#224;</font>SEC
    registration fee</font></td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="24%" align="right" bgcolor="#E6E6E6"><font SIZE="2">235</font></td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="53%"><font SIZE="2"><font face="Wingdings">&#224;</font>Accountants&#146;
    fees and expenses</font></td>
    <td WIDTH="6%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="24%" align="right"><font SIZE="2">1,000</font></td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="53%" bgcolor="#E6E6E6"><font SIZE="2"><font face="Wingdings">&#224;</font>Miscellaneous</font></td>
    <td WIDTH="6%" align="right" bgcolor="#E6E6E6"><font SIZE="2">$</font></td>
    <td WIDTH="24%" align="right" bgcolor="#E6E6E6"><font SIZE="2">15,000</font></td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="53%"><font SIZE="2">
    <p style="margin-left: 5%"><font face="Wingdings">&#224;</font>Total</font></td>
    <td WIDTH="6%" align="right"><font SIZE="2">$</font></td>
    <td WIDTH="24%" align="right"><font SIZE="2">16,235</font></td>
  </tr>
</table>
<p style="text-indent: 3%"><font SIZE="2">The Registrant will bear all of the
expenses shown above. </p>
</font><b><font SIZE="2">
<p>INDEMNIFICATION OF DIRECTORS AND OFFICERS </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">The Company&#146;s Bylaws provide that the
Company has the power to indemnify its directors and officers to the fullest
extent provided by Texas law. Pursuant to Texas law, a corporation may indemnify
its officers and directors, provided that such person: </p>
<p style="margin-left: 3%">(a) </p>
<p style="margin-left: 6%; margin-top: -25.5pt">conducted himself or herself in
good faith; </p>
<p ALIGN="JUSTIFY" style="margin-left: 3%">(b) </p>
<p ALIGN="JUSTIFY" style="margin-left: 6%; margin-top: -25.5pt">reasonably
believed (i) in the case of conduct in his or her official capacity as an
officer or director or officer of the corporation, that such conduct was in the
corporation's best interests; and (ii) in all other cases, that his or her
conduct was at least not opposed to the corporation's best interests; and </p>
<p style="margin-left: 3%">(c) </p>
<p style="margin-left: 6%; margin-top: -25.5pt">in the case of any criminal
proceeding, had no reasonable cause to believe that such conduct was unlawful.
</p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The effect of these provisions is
potentially to indemnify our directors and officers from all costs and expenses
of liability incurred by them in connection with any action, suit or proceeding
in which they are involved by reason of their affiliation with the Company. </p>
<p align="center">40 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><b><font SIZE="2">
<p align="justify">RECENT SALES OF UNREGISTERED SECURITIES </p>
</font></b><font SIZE="2">
<p ALIGN="JUSTIFY" style="text-indent: 3%">Set forth below is information
regarding the issuance and sales of the company&#146;s securities without
registration for the past three (3) years prior to the date of this Registration
Statement. No such sales involved the use of an underwriter, no advertising or
public solicitation were involved, the securities bear a restrictive legend and
no commissions were paid in connection with the sale of any securities. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Effective November 28, 2007, in
connection with the entry by Wound Care Innovations into certain license
agreements with Applied Nutritionals and Mr. George Petito, we issued to Mr.
George Petito 1,000 shares of a newly designated Series A Convertible Preferred
Stock. </p>
<p align="justify" style="text-indent: 3%">Effective December 27, 2007, we
issued 490.196 shares of our Series A Convertible Preferred Stock to Keystone
Equity Partners in exchange for the cancellation of approximately $1,500,000 in
debt. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Effective January 11, 2008, we issued
and sold 86,207 shares of our common stock and warrants to purchase an aggregate
of 1,500,000 additional shares of common stock in exchange for $50,000. Of the
$50,000 received by the Company through the sale of share of common stock and
warrants to T Squared, $2,717 of the purchase price was allocated to the common
stock and $47,283 was allocated to the warrants. We also issued and sold a
convertible note in the principal amount of $700,000 (the &quot;Note&quot;). The note
bears interest at the rate of eight percent (8%) per annum and matures on
January 11, 2009. The Note initially converts into 1,206,897 shares, subject to
certain adjustments to the conversion price. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">The foregoing issuance of the shares
of our common stock, the convertible promissory notes and the warrants described
above were made in private transactions or private placements intending to meet
the requirements of one or more exemptions from registration. In addition to any
noted exemption below, we relied upon Regulation D and Section 4(2) of the
Securities Act of 1933, as amended (the &quot;Act&quot;). The investors were not solicited
through any form of general solicitation or advertising, the transactions being
non-public offerings, and the sales were conducted in private transactions where
the investor identified an investment intent as to the transaction without a
view to an immediate resale of the securities; the shares were &quot;restricted
securities&quot; in that they were both legended with reference to Rule 144 as such
and the investors identified they were sophisticated as to the investment
decision and in most cases we reasonably believed the investors were &quot;accredited
investors&quot; as such term is defined under Regulation D based upon statements and
information supplied to us in writing and verbally in connection with the
transactions. We have never utilized an underwriter for an offering of our
securities and no sales commissions were paid to any third party in connection
with the above-referenced sales. </p>
<b>
<p align="center">EXHIBITS </p>
</b></font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td COLSPAN="2"><font SIZE="2">Exhibit No.</font></td>
  </tr>
  <tr>
    <td WIDTH="10%">&nbsp;</td>
    <td WIDTH="90%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" bgcolor="#E6E6E6"><font SIZE="2">3.1</font></td>
    <td WIDTH="90%" bgcolor="#E6E6E6"><font SIZE="2">Articles of
    Incorporation.**</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center">&nbsp;</td>
    <td WIDTH="90%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" bgcolor="#E6E6E6"><font SIZE="2">3.1a</font></td>
    <td WIDTH="90%" bgcolor="#E6E6E6"><font SIZE="2">Articles of Amendment
    (Incorporated by reference to Exhibit A to the Company&#146;s Information
    Statement filed with the Commission on May 13, 2008)</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center">&nbsp;</td>
    <td WIDTH="90%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" bgcolor="#E6E6E6"><font SIZE="2">3.2</font></td>
    <td WIDTH="90%" bgcolor="#E6E6E6"><font SIZE="2">Bylaws.**</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center">&nbsp;</td>
    <td WIDTH="90%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" bgcolor="#E6E6E6"><font SIZE="2">5.1</font></td>
    <td WIDTH="90%" bgcolor="#E6E6E6"><font SIZE="2">Opinion of Colbert Johnston
    LLP.*</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center">&nbsp;</td>
    <td WIDTH="90%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" bgcolor="#E6E6E6"><font SIZE="2">10.1</font></td>
    <td WIDTH="90%" bgcolor="#E6E6E6"><font SIZE="2">Stock Purchase Agreement
    dated as of December 28, 2007, by and between MB Software Corporation and
    Keystone Equity Partners.*</font></td>
  </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2">
<p align="center">41 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="10%" align="center" valign="top" bgcolor="#E6E6E6">
    <font SIZE="2">10.2</font></td>
    <td WIDTH="90%" bgcolor="#E6E6E6"><font SIZE="2">Exclusive Patent and
    Trademark License dated as of November 28, 2007, by and between Wound Care
    Innovations, L.L.C. and Applied Nutritionals, LLC. (Incorporated by
    reference from Exhibit 10.1 to the Company&#146;s Current Report on Form 8-K
    filed with the Commission on November 30, 2007).</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" valign="top">&nbsp;</td>
    <td WIDTH="90%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" valign="top" bgcolor="#E6E6E6">
    <font SIZE="2">10.3</font></td>
    <td WIDTH="90%" bgcolor="#E6E6E6"><font SIZE="2">Exclusive License dated as
    of November 28, 2007, by and between Wound Care Innovations, LLC and George
    Petito (Incorporated by reference from Exhibit 10.2 to the Company&#146;s Current
    Report on Form 8-K filed with the Commission on November 30, 2007).</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" valign="top">&nbsp;</td>
    <td WIDTH="90%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" valign="top" bgcolor="#E6E6E6">
    <font SIZE="2">10.4</font></td>
    <td WIDTH="90%" bgcolor="#E6E6E6"><font SIZE="2">Manufacturing Agreement
    dated as of November 28, 2007, by and between Wound Care Innovations, L.L.C.
    and Applied Nutritionals, LLC (Incorporated by reference from Exhibit 10.3
    to the Company&#146;s Current Report on Form 8-K filed with the Commission on
    November 30, 2007).</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" valign="top">&nbsp;</td>
    <td WIDTH="90%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" valign="top" bgcolor="#E6E6E6">
    <font SIZE="2">10.5</font></td>
    <td WIDTH="90%" bgcolor="#E6E6E6"><font SIZE="2">Common Stock Purchase
    Agreement, dated as of January 11, 2008, by and between Wound Management
    Technologies, Inc. and T Squared Investments LLC (Incorporated by reference
    from Exhibit 10.1 to the Company&#146;s Current Report on Form 8-K filed with the
    Commission on January 23, 2008).</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" valign="top">&nbsp;</td>
    <td WIDTH="90%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" valign="top" bgcolor="#E6E6E6">
    <font SIZE="2">10.6</font></td>
    <td WIDTH="90%" bgcolor="#E6E6E6"><font SIZE="2">Note Purchase Agreement,
    dated as of January 11, 2008, by and between Wound Management Technologies,
    Inc. and T Squared Investments LLC (Incorporated by reference from Exhibit
    10.2 to the Company&#146;s Current Report on Form 8-K filed with the Commission
    on January 23, 2008).</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" valign="top">&nbsp;</td>
    <td WIDTH="90%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" valign="top" bgcolor="#E6E6E6">
    <font SIZE="2">10.7</font></td>
    <td WIDTH="90%" bgcolor="#E6E6E6"><font SIZE="2">Common Stock Purchase
    Warrant &quot;A,&quot; dated as of January 11, 2008 (Incorporated by reference from
    Exhibit 10.3 to the Company&#146;s Current Report on Form 8-K filed with the
    Commission on January 23, 2008).</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" valign="top">&nbsp;</td>
    <td WIDTH="90%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" valign="top" bgcolor="#E6E6E6">
    <font SIZE="2">10.8</font></td>
    <td WIDTH="90%" bgcolor="#E6E6E6"><font SIZE="2">Common Stock Purchase
    Warrant &quot;B,&quot; dated as of January 11, 2008 (Incorporated by reference from
    Exhibit 10.4 to the Company&#146;s Current Report on Form 8-K filed with the
    Commission on January 23, 2008).</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" valign="top">&nbsp;</td>
    <td WIDTH="90%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" valign="top" bgcolor="#E6E6E6">
    <font SIZE="2">10.9</font></td>
    <td WIDTH="90%" bgcolor="#E6E6E6"><font SIZE="2">Registration Rights
    Agreement Common Stock Purchase Agreement, dated as of January 11, 2008, by
    and between MB Software Corporation and T Squared Investments LLC
    (Incorporated by reference from Exhibit 10.5 to the Company&#146;s Current Report
    on Form 8-K filed with the Commission on January 23, 2008).</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" valign="top">&nbsp;</td>
    <td WIDTH="90%">&nbsp;</td>
  </tr>
  <tr>
    <td width="10%" align="center" valign="top" bgcolor="#E6E6E6">
    <font SIZE="2">10.10 </font></td>
    <td width="90%" bgcolor="#E6E6E6"><font SIZE="2">Convertible Promissory Note
    dated January 11, 2008.*</font></td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" valign="top">&nbsp;</td>
    <td WIDTH="90%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="10%" align="center" valign="top" bgcolor="#E6E6E6">
    <font SIZE="2">23.1</font></td>
    <td WIDTH="90%" bgcolor="#E6E6E6"><font SIZE="2">Consent of Pritchett, Siler
    &amp; Hardy, P.C.*</font></td>
  </tr>
</table>
<font SIZE="2">
<p>* Filed herewith <br>
** Previously filed </p>
<b>
<p align="center">UNDERTAKINGS </p>
</b>
<p>The undersigned registrant hereby undertakes: </p>
<p style="text-indent: 3%">1.&nbsp;&nbsp;&nbsp;&nbsp; To file, during any period
in which offers or sales are being made, a post-effective amendment to this
registration statement<b> </b></font></p>
<font SIZE="2">
<p align="center">42 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font FACE="Times New Roman PSMT" size="2">
<p ALIGN="justify" style="margin-left: 3%">(a) </p>
<p ALIGN="justify" style="margin-left: 6%; margin-top: -25.5pt">To include any
prospectus required by section 10(a)(3) of the Securities Act of 1933; </p>
<p ALIGN="justify" style="margin-left: 3%">(b) </p>
<p ALIGN="justify" style="margin-left: 6%; margin-top: -25.5pt">To reflect in
the prospectus any facts or events which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which is being registered) and any deviation from the high or low
end of the estimated maximum range, may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the &quot;Calculation of Registration Fee&quot;
table in the effective registration statement; and </p>
<p ALIGN="justify" style="margin-left: 3%">(c) </p>
<p ALIGN="justify" style="margin-left: 6%; margin-top: -25.5pt">To include any
additional or changed material information on the plan of distribution. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">2.&nbsp;&nbsp;&nbsp;&nbsp; For
determining liability under the Securities Act of 1933, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering. </p>
<p align="justify" style="text-indent: 3%">3.&nbsp;&nbsp;&nbsp;&nbsp; File a
post-effective amendment to remove from registration any of the securities being
registered, which remain unsold at the end of the offering. </p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">4.&nbsp;&nbsp;&nbsp;&nbsp; Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or controlling persons of the company pursuant
to the foregoing provisions or otherwise, the company has been advised that, in
the opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in that Act and is, therefore, unenforceable.
</p>
<p ALIGN="JUSTIFY" style="text-indent: 3%">In the event that a claim for
indemnification against such liabilities (other than the payment by us of
expenses incurred or paid by a director, officer or controlling person of us in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by us is against public policy as
expressed in the Securities Act and we will be governed by the final
adjudication of such issue. </p>
<p align="center">43 </p>
<hr color="#000000" size="5"><p Style='page-break-before:always'></font><font size="2"><b>
<p align="center">SIGNATURES </p>
</b>
<p ALIGN="JUSTIFY" style="text-indent: 3%">Pursuant to the requirements of the
Securities Act of 1933, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Worth, Texas on June 10, 2008. </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="50%" COLSPAN="3"><font SIZE="2">WOUND MANAGEMENT TECHNOLOGIES,
    INC.</font></td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%">&nbsp;</td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="5%"><font SIZE="2">By: /s/</font></td>
    <td WIDTH="30%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Scott A. Haire</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%"><font SIZE="2">Date: June 10, 2008</font></td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%" style="border-top-style: solid; border-top-width: 1">
    <font SIZE="2">Scott A. Haire, Chief Executive Officer,</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%"><font SIZE="2">Chief Financial Officer and</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%"><font SIZE="2">President</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
</table>
<font FACE="Times New Roman PSMT" SIZE="2">
<p style="text-indent: 3%">Pursuant to the requirements of the Securities Act of
1933, this registration statement has been signed by the following persons in
the capacities and on the date stated. </p>
</font>
<table CELLSPACING="0" BORDER="0" WIDTH="100%" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111">
  <tr>
    <td WIDTH="5%"><font SIZE="2">By: /s/</font></td>
    <td WIDTH="30%" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">Scott A. Haire</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%"><font SIZE="2">Date: June 10, 2008</font></td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">Scott A. Haire, Chief Executive Officer,</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%"><font SIZE="2">Chief Financial Officer and Director</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%">&nbsp;</td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%">&nbsp;</td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="5%"><font SIZE="2">By: /s/</font></td>
    <td WIDTH="30%" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">/s/ Lucy Singleton</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%"><font SIZE="2">Date: June 10, 2008</font></td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">Lucy Singleton, Chief Accounting Officer</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%">&nbsp;</td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%">&nbsp;</td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="5%"><font SIZE="2">By: /s/</font></td>
    <td WIDTH="30%" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">Gilbert A. Valdez</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%"><font SIZE="2">Date: June 10, 2008</font></td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">Gilbert A. Valdez, Director</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%">&nbsp;</td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%">&nbsp;</td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="5%"><font SIZE="2">By: /s/</font></td>
    <td WIDTH="30%" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">Araldo A. Cossutta</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%"><font SIZE="2">Date: June 10, 2008</font></td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">Araldo A. Cossutta, Director</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%">&nbsp;</td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
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    <td WIDTH="15%">&nbsp;</td>
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  <tr>
    <td WIDTH="5%"><font SIZE="2">By: /s/</font></td>
    <td WIDTH="30%" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">Steven W. Evans</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%"><font SIZE="2">Date: June 10, 2008</font></td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">Steven W. Evans, Director</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
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    <td WIDTH="5%">&nbsp;</td>
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  </tr>
  <tr>
    <td WIDTH="5%"><font SIZE="2">By: /s/</font></td>
    <td WIDTH="30%" style="border-bottom-style: solid; border-bottom-width: 1"><font SIZE="2">Robert E. Gross</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%"><font SIZE="2">Date: June 10, 2008</font></td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%" style="border-top-style: solid; border-top-width: 1"><font SIZE="2">Robert E. Gross, Director</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
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  <tr>
    <td WIDTH="5%"><font SIZE="2">By: /s/</font></td>
    <td WIDTH="30%" style="border-bottom-style: solid; border-bottom-width: 1">
    <font SIZE="2">Thomas J. Kirchhofer</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%"><font SIZE="2">Date: June 10, 2008</font></td>
  </tr>
  <tr>
    <td WIDTH="5%">&nbsp;</td>
    <td WIDTH="30%"><font SIZE="2">Thomas J. Kirchhofer, Director</font></td>
    <td WIDTH="15%">&nbsp;</td>
    <td WIDTH="50%">&nbsp;</td>
  </tr>
</table>
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<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>2
<FILENAME>mbsoftwares061008exh51.htm
<DESCRIPTION>EXHIBIT 5.1
<TEXT>
<html>

<head>
<title>Wound Management Technologies, Inc.: Exhibit 5.1</title>
</head>

<body>

<div style="border-top-style: solid; border-top-width: 1; padding-top: 1">
  <hr color="#000000" size="5">
</div>
<p align="center"><img border="0" src="mbsoft1.gif" width="351" height="63"></p>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" dir="ltr">&nbsp;</P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=center dir="ltr">
<font face="Times New Roman" size="2">June 10, 2008</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" dir="ltr">
<font face="Times New Roman" size="2"><BR></font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" dir="ltr">
<font face="Times New Roman" size="2">Wound Management Technologies, Inc.<br>
777 Main Street, Suite 3100<br>
Fort Worth, Texas 76102</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" dir="ltr">
<font face="Times New Roman" size="2">Ladies and Gentlemen:</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:36pt; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">This firm has acted as counsel for Wound Management Technologies, Inc., f/k/a/ MB Software Corporation, a Texas corporation (the &quot;Company&quot;), in connection with the preparation of the Company's Registration Statement on Form S-1 (the &quot;Registration Statement&quot;), in connection with the proposed offering of an aggregate of aggregate of 3,993,104 shares of the Company&#146;s common stock, $.001 par value per share (&#147;Common Stock&#148;), of which 1,286,207 shares are issued and outstanding, and 2,706,897 shares are issuable upon exercise of outstanding notes and warrants (the &#147;Notes and Warrants&#148;). &nbsp;Unless otherwise defined herein, capitalized terms used and not herein defined have the respective meaning given such term in the Registration Statement.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:36pt; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">In reaching the opinions set forth herein, this firm has reviewed the Company's Articles of Incorporation and Bylaws, minutes of the meetings of the Company's Board of Directors, certificates of public officials, and other matters that this firm deemed relevant.
</font> </P>
<P style="margin-left:0pt; padding:0pt; text-indent:36pt; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">Based on the foregoing, we are of the opinion that (a) the 1,286,207 shares of issued and outstanding Common Stock have been duly authorized, and are validly issued, fully paid and non-assessable; and (b) the 2,706,897 shares of Common Stock issuable upon conversion of the Notes and exercise of the Warrants have been duly authorized and, when issued upon such exercise in accordance with the terms of the Notes and Warrants and following receipt by the Company of the consideration therefor, shall be duly and validly issued, fully paid and nonassessable.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:36pt; color:#000000" align=justify dir="ltr">
&nbsp;</P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=center dir="ltr">
<font face="Times New Roman" size="2">6021 Morriss Road, Suite 101, Flower Mound, Texas 75028<br>
Phone: (972) 724-3338 &#149; Fax: (972) 724-1922</font></P>
<hr color="#000000" SIZE="5"><p style="page-break-before: always">
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" dir="ltr">
<font face="Times New Roman" size="2">Wound Management Technologies, Inc.<br>
June 10, 2008<br>
Page 2</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:36pt; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">The opinion expressed above is subject to the following assumptions, exceptions, and qualifications: (a) all information contained in all documents reviewed by this firm is true and correct, (b) all signatures on all documents reviewed by this firm are genuine, (c) all documents submitted to this firm as originals are true and complete, (d) all documents submitted as copies are true and complete copies of the originals thereof, and (e) each natural person signing any document reviewed by this firm had the legal capacity to do so.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:36pt; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">The opinions expressed above are limited to the laws of the State of Texas and the federal laws of the United States of America. &nbsp;</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:36pt; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">This opinion letter may be filed as an exhibit to the Registration Statement. &nbsp;In giving this consent, this firm does not thereby admit that it comes within the category of persons whose consent is required under section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission promulgated thereunder. &nbsp;</font></P>
<P style="margin-left:50%; padding:0pt; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">Very truly yours,</font></P>
<P style="margin-left:50%; padding:0pt; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">/s/ &nbsp;Colbert Johnston LLP</font></P>
<P style="margin-left:50%; padding:0pt; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">COLBERT JOHNSTON LLP</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2"><BR></font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify dir="ltr">
&nbsp;</P>
<hr color="#000000" size="5">

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.10
<SEQUENCE>3
<FILENAME>mbsoftwares061008exh1010.htm
<DESCRIPTION>EXHIBIT 10.10
<TEXT>
<html>

<head>
<title>Wound Management Technologies, Inc.: Exhibit 10.10</title>
</head>

<body>

<div style="border-top-style: solid; border-top-width: 1; padding-top: 1">
  <hr color="#000000" SIZE="5">
</div>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=center dir="ltr">
<font face="Times New Roman" size="2"><B>MB SOFTWARE CORPORATION<BR>
CONVERTIBLE NOTE</B></font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=left dir="ltr">
<font face="Times New Roman" size="2">$700,000</font></P>
<P style="margin-left:0pt; margin-top:-25.5pt; margin-right:0pt; padding:0pt; text-indent:0pt; color:#000000" align=right dir="ltr">
<font face="Times New Roman" size="2">January 11, 2008</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. &nbsp;WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED, EXCEPT UPON DELIVERY TO MB SOFTWARE CORPORATION, A TEXAS CORPORATION (THE &quot;COMPANY&quot;), OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO IT TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE OR FOREIGN SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER. &nbsp;</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:0pt; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">THIS NOTE WAS ISSUED PURSUANT TO A NOTE PURCHASE AGREEMENT, DATED AS OF JANUARY 11, 2008 (AS FROM TIME TO TIME AMENDED, THE &#147;PURCHASE AGREEMENT&#148;), BETWEEN THE COMPANY AND T SQUARED INVESTMENTS, LLC, A DELAWARE LIMIED LIABILITY COMPANY, AND IS ENTITLED TO THE BENEFITS THEREOF. &nbsp;ALL TERMS USED HEREIN UNLESS OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS ASCRIBED TO THEM IN THE COMMITMENT AGREEMENT. &nbsp;EACH HOLDER OF THIS NOTE WILL BE DEEMED, BY ITS ACCEPTANCE HEREOF, TO HAVE AGREED TO THE TERMS AND CONDITIONS SET FORTH IN<B> </B>THE COMMITMENT AGREEMENT.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:4%; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">MB Software Corporation, a Texas corporation (the &#147;Company&#148;), for value received hereby promises to pay to T Squared Investments, LLC, a Delaware limited liability company, or registered assigns (the &#147;Holder&#148;), the principal amount of Seven Hundred Thousand Dollars ($700,000.00) with interest on the unpaid principal of this Note, from the date hereof, at the rate of eight percent (8%) per annum, except as otherwise may be provided herein. &nbsp;All payments hereunder are payable in lawful money of the United States of America at the place the Holder may designate in writing to the Company.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:4%; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">Interest on this Note shall be computed for the actual number of days elapsed and on the basis of a year consisting of 360 days, unless the maximum legal interest rate would thereby be exceeded, in which event, to the extent necessary to avoid exceeding such maximum rate, interest shall be computed on the basis of the actual number of days elapsed in the applicable calendar year in which it accrued. &nbsp;It is the intention of the Company and the Holder to conform strictly to applicable usury laws. &nbsp;It is therefore agreed that (a) the aggregate of all interest and other charges constituting interest under applicable law and contracted for, chargeable or receivable under this Note or otherwise in connection with this loan transaction, shall never exceed the maximum amount of interest, nor produce a rate in excess of the maximum contract rate of interest the Holder may charge the Company under applicable law and in regard to which the Company may not successfully ass
ert the claim or defense of usury, and (b) if any excess interest is provided for, it shall be deemed a mistake and the same shall be refunded to the Company or credited on the unpaid principal balance hereof and this Note shall be automatically deemed reformed so as to permit only the collection of the maximum legal contract rate and amount of interest.</font></P>
<hr color="#000000" SIZE="5"><p style="page-break-before: always">
<P style="margin-left:0pt; padding:0pt; text-indent:4%; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">Accrued interest on this Note shall, at the option of Holder, (a) be due and payable monthly, on the first business day of each month, beginning February 1, 2008, or (b) be added to the principal of this Note, until this Note is paid in full.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:4%; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">The outstanding principal balance and all accrued interest of this Note shall be due and payable on January 11, 2009 (the &#147;Maturity Date&#148;), together with all fees and expenses, if any, due hereunder. &nbsp;This Note may not be prepaid, at any time, in whole or in part, without the prior written consent of Holder.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:4%; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">If any payment of principal or interest on this Note shall become due on a Saturday, Sunday or any other day on which national banks are not open for business, such payment shall be made on the next succeeding business day.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:4%; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">Any check, draft, money order or other instrument given in payment of all or any portion of this Note may be accepted by the Holder or any other holder hereof and handled in collection in the customary manner, but the same shall not constitute payment hereunder or diminish any rights of the Holder or any other holder hereof, except to the extent that actual cash proceeds of such instrument are unconditionally received by the Holder or any other holder hereof and applied to the indebtedness as herein provided.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:4%; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">At any time prior to the Maturity Date, the Holder of this Note may convert all or any part of the principal and accrued interest of this Note in accordance with Section 2.1 of the Purchase Agreement.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:4%; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">This Note, when surrendered for conversion, shall be duly endorsed, or be accompanied by a written instrument of transfer in a form satisfactory to the Company duly executed by the Holder of this Note. &nbsp;For convenience, the conversion of all or a portion, as the case may be, of the principal of this Note into Common Stock is hereinafter sometimes referred to as the conversion of this Note. &nbsp;In the event that this Note is converted in part only, upon such conversion, the Company shall execute and deliver to the Holder, without service charge, a new Note, of any authorized denomination or denominations as requested by the Holder, in aggregate principal amount equal to and in exchange for the unconverted portion of the principal of this Note so surrendered.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:4%; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">If an Event of Default as defined in the Purchase Agreement occurs and is continuing, the unpaid principal and accrued interest of this Note may be declared or otherwise immediately become due and payable in the manner, at the price, including all costs of enforcement (including reasonable attorneys&#146; fees) and with the effect provided in the Purchase Agreement.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:4%; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">Except as provided herein, the Company waives all demands for payment, presentations for payment, notices of intention to accelerate maturity, notices of acceleration of maturity, protests, notices of protest, grace, and diligence in the collection of this Note, and in filing suit hereon, and agrees that its liability for the payment hereof shall not be affected or impaired by any release or change in the security or by any extension or extensions of time of payment.</font></P>
<hr color="#000000" SIZE="5"><p style="page-break-before: always">
<P style="margin-left:0pt; padding:0pt; text-indent:4%; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">The undersigned hereby agrees to pay all expenses incurred by the Holder, including reasonable attorneys&#146; fees, all of which shall become a part of the principal hereof, if this Note is placed in the hands of an attorney for collection, or if it is collected by suit or through any probate, bankruptcy or any other legal proceedings.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:4%; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">If this Note is not paid at maturity, however maturity may be brought about, all principal due on the date of such maturity shall bear interest from the date of such maturity at the maximum contract rate of interest which the Holder may charge the Company under applicable law.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:4%; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">No provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, places and rates, and in the coin or currency, herein prescribed.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:4%; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">This Note and the rights and obligations of the parties hereto shall be deemed to be contracts under the laws of the State of Texas and for all purposes shall be governed by and construed and enforced in accordance with the laws of said State, except for its rules relating to the conflict of laws.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:4%; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">IN WITNESS WHEREOF, the Company has duly executed this Note as of the date first above written.</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:50%; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">MB SOFTWARE CORPORATION</font></P>
<P style="margin-left:0pt; padding:0pt; text-indent:50%; color:#000000" align=justify dir="ltr">&nbsp;</P>
<P style="margin-left:50%; padding:0pt; color:#000000" align=justify dir="ltr">
<font face="Times New Roman" size="2">By: <u>/s/ Scott A. Haire&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Scott A. Haire, President</font></P>
<p style="text-indent: 4%; color: #000000; margin-left: 0pt; padding: 0pt" align="justify" dir="ltr">&nbsp;</p>
<hr color="#000000" SIZE="5">

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>4
<FILENAME>mbsoftwares061008exh231.htm
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
<html>

<head>

<title>Wound Management Technologies, Inc.: Exhibit 23.1</title>
</head>

<body>

<div style="border-top-style: solid; border-top-width: 1; padding-top: 1">
  <hr color="#000000" size="5">
</div>
<p align="center">&nbsp;</p>
<p align="center"><b><font size="2">CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</font></b></p>
<p align="justify"><font face="10" size="2"><br>
We hereby consent to the use in the Prospectus constituting part of this
Amendment No. 1 to the Registration Statement on Form S-1 for Wound Management
Technologies, Inc. (formerly MB Software Corporation), of our report dated March
28, 2008, relating to the December 31, 2007 financial statements of MB Software
Corporation (now known as Wound Management Technologies, Inc.), which appears in
such Prospectus. We also consent to the reference to us under the heading
&quot;Experts&quot;.</font></p>
<p><font face="10" size="2">/s/ <u>Pritchett, Siler &amp; Hardy, P.C.<br>
</u>PRITCHETT, SILER &amp; HARDY, P.C.</font></p>
<p><font face="10" size="2">Salt Lake City, Utah<br>
June 9, 2008</font></p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<hr color="#000000" size="5">

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</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>8
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