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<SEC-DOCUMENT>0001035704-08-000332.txt : 20080923
<SEC-HEADER>0001035704-08-000332.hdr.sgml : 20080923
<ACCEPTANCE-DATETIME>20080923172537
ACCESSION NUMBER:		0001035704-08-000332
CONFORMED SUBMISSION TYPE:	10KSB
PUBLIC DOCUMENT COUNT:		8
CONFORMED PERIOD OF REPORT:	20080630
FILED AS OF DATE:		20080923
DATE AS OF CHANGE:		20080923

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Lifevantage Corp
		CENTRAL INDEX KEY:			0000849146
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				841097796
		STATE OF INCORPORATION:			CO
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		10KSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-30489
		FILM NUMBER:		081085190

	BUSINESS ADDRESS:	
		STREET 1:		6400 SOUTH FIDDLER
		STREET 2:		SUITE 1750
		CITY:			ENGLEWOOD
		STATE:			CO
		ZIP:			80111
		BUSINESS PHONE:		720-488-1711

	MAIL ADDRESS:	
		STREET 1:		6400 SOUTH FIDDLER
		STREET 2:		SUITE 1750
		CITY:			ENGLEWOOD
		STATE:			CO
		ZIP:			80111

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	LIFELINE THERAPEUTICS, INC.
		DATE OF NAME CHANGE:	20041019

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	YAAK RIVER RESOURCES INC
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ANDRAPLEX CORP
		DATE OF NAME CHANGE:	19920406
</SEC-HEADER>
<DOCUMENT>
<TYPE>10KSB
<SEQUENCE>1
<FILENAME>d60449e10ksb.htm
<DESCRIPTION>FORM 10-KSB
<TEXT>
<HTML>
<HEAD>
<TITLE>e10ksb</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>WASHINGTON, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 10pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>


<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 10-KSB</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><B>(Mark One) </B>&nbsp;

</DIV>
<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#254;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 12%"><B><B>For the fiscal year ended June&nbsp;30, 2008</B>
</B>
</DIV>

<DIV align="center">
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%" style="font-size: 12pt">
<TR style="font-size: 6pt">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR valign="top">
    <TD align="center"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><B>TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 12%"><B><B>For the transition period
from&nbsp;&nbsp;&nbsp;</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>
</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Commission file number: 000-30489</B></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>LIFEVANTAGE CORPORATION</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Name of small business issuer in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Colorado</B><BR>
(State or other jurisdiction of <BR>
incorporation or organization)<BR>
<B>11545 W. Bernardo Court, Suite&nbsp;301<BR>
San Diego, California</B><BR>
(Address of principal executive offices)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>90-0224471</B><BR>
(IRS Employer<BR>
Identification No.)<BR>
<B>92127</B><BR>
(Zip Code)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">Issuer&#146;s telephone number: <B>(858)&nbsp;312-8000</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">Securities registered pursuant to Section&nbsp;12(b) of the Exchange Act: <B>None</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">Securities registered pursuant to Section&nbsp;12(g) of the Exchange Act:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 0pt">Common Stock, $0.001 par value per share<BR>
(Title of Class)</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Check whether the issuer is not required to file reports pursuant to Section&nbsp;13 or 15(d) of
the Exchange Act. <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Check whether the issuer (1)&nbsp;filed all reports required to be filed by Section&nbsp;13 or 15(d) of
the Exchange Act during the past twelve (12)&nbsp;months (or for such shorter period that the registrant
was required to file such reports), and (2)&nbsp;has been subject to such filing requirements for the
past 90&nbsp;days. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Yes&nbsp;<FONT face="Wingdings">&#254;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;<FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Check if there is no disclosure of delinquent filers in response to Item&nbsp;405 of Regulation&nbsp;S-B
contained in this form, and no disclosure will be contained, to the best of registrant&#146;s knowledge,
in definitive proxy or information statements incorporated by reference in Part&nbsp;III of this
Form&nbsp;10-KSB or any amendment to this Form&nbsp;10-KSB.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <FONT face="Wingdings">&#254;</FONT>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark whether the Registrant is a shell company (as defined in Rule&nbsp;12b-2 of
the Exchange Act). &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Yes <FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No <FONT face="Wingdings">&#254;</FONT>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Registrant&#146;s revenues for the fiscal year ended June&nbsp;30, 2008 were $3,140,302.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The aggregate market value of the voting stock held by non-affiliates of the Registrant based
on the average bid and asked prices of the Registrant&#146;s Common Stock on September&nbsp;17, 2008 was
$3,963,000, which excludes 6,067,000 shares of common stock held by Directors, Officers and holders
of 5% or more of the Registrant&#146;s outstanding Common Stock on that date. Exclusion of shares held
by any person should not be construed to indicate that such person possesses the power, direct or
indirect, to direct or cause the direction of the management or policies of the Registrant, or that
such person is controlled by or under common control with the Registrant. There is no non-voting
common equity of the Registrant.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The number of shares outstanding of the Registrant&#146;s Common Stock, par value $0.001 per share,
as of September&nbsp;17, 2008, was 24,766,117 shares.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transitional
Small Business Disclosure Format (check one):
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Yes
<FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No
<FONT face="Wingdings">&#254;</FONT>
</DIV>

<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>



<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain statements contained in this Report on Form 10-KSB and the information incorporated by
reference herein may contain &#147;forward-looking statements&#148; (as such term is defined in Section&nbsp;27A
of the Securities Act of 1933, as amended and Section&nbsp;21E of the Securities Exchange Act of 1934,
as amended). These statements, which involve risks and uncertainties, reflect our current
expectations, intentions, or strategies regarding our possible future results of operations,
performance, and achievements. Forward-looking statements include, without limitation: statements
regarding future products or product development; statements regarding future selling, general and
administrative costs and research and development spending; statements regarding our product
development strategy; and statements regarding future capital expenditures and financing
requirements. These forward-looking statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995 and applicable common law and SEC rules.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These forward-looking statements are identified in this Report and the information
incorporated by reference by using words such as &#147;anticipate&#148;, &#147;believe&#148;, &#147;could&#148;, &#147;estimate&#148;,
&#147;expect&#148;, &#147;intend&#148;, &#147;plan&#148;, &#147;predict&#148;, &#147;project&#148;, &#147;should&#148; and similar terms and expressions,
including references to assumptions and strategies. These statements reflect our current beliefs
and are based on information currently available to us. Accordingly, these statements are subject
to certain risks, uncertainties, and contingencies, which could cause our actual results,
performance, or achievements to differ materially from those expressed in, or implied by, such
statements.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following factors are among those that may cause actual results to differ materially from
our forward-looking statements:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our limited operating history and lack of sufficient revenues from operations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our ability to successfully expand our operations and manage our future growth;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The effect of current and future government regulations and regulators on our business;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The effect of unfavorable publicity on our business;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Competition in the dietary supplement market;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The potential for product liability claims against the Company;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our dependence on third party manufacturers to manufacture our product;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The ability to obtain raw material for our product;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our dependence on a limited number of significant customers and a single product for our
revenue;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our ability to protect our intellectual property rights and the value of our product;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our ability to continue to innovate and provide products that are useful to consumers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The significant control that our management and significant shareholders exercise over
us;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The illiquidity of our common stock; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Other factors not specifically described above, including the other risks,
uncertainties, and contingencies described under &#147;Description of Business,&#148; &#147;Risk Factors,&#148;
&#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations,&#148;
and other sections of this Report on Form 10-KSB.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When considering these forward-looking statements, you should keep in mind the cautionary
statements in this report and the documents incorporated by reference. We have no obligation and
do not undertake to update or revise any such forward-looking statements to reflect events or
circumstances after the date of this report.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="12%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="81%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Page</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><A href="#101"><B>PART I</B></A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px"><A href="#102">Item&nbsp;1.
Description of Business
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">4</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px"><A href="#103">Item&nbsp;2.
Description of Properties
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">13</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px"><A href="#104">Item&nbsp;3.
Legal Proceedings
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">14</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px"><A href="#105">Item&nbsp;4.
Submission of Matters to a Vote of Security Holders
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">14</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><A href="#106"><B>PART II</B></A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px"><A href="#107">Item&nbsp;5.
 Market for Common Equity, Related Stockholder
Matters and Small Business Issuer Purchase of Equity
Securities</A></DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">15</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px"><A href="#108">Item&nbsp;6.
Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">16</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px"><A href="#109">Item&nbsp;7.
Financial Statements
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">34</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px"><A href="#110">Item&nbsp;8.
Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">34</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px"><A href="#111">Item&nbsp;8A(T).
Controls and Procedures
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">34</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px"><A href="#112">Item&nbsp;8B.
Other Information
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">35</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><A href="#113"><B>PART III</B></A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px"><A href="#114">Item&nbsp;9.
Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section&nbsp;16(a) of the
Exchange Act
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">35</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px"><A href="#115">Item&nbsp;10.
Executive Compensation
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">35</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px"><A href="#116">Item&nbsp;11.
Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">35</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px"><A href="#117">Item&nbsp;12.
Certain Relationships and Related Transactions
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">35</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px"><A href="#118">Item&nbsp;13.
Exhibits
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">35</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" colspan="3"><DIV style="margin-left:0px; text-indent:-0px"><A href="#119">Item&nbsp;14.
Principal Accountant Fees and Services
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">35</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d60449exv10w19.htm">Lease</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d60449exv23w1.htm">Consent of Ehrhardt Keefe Steiner & Hottman PC</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d60449exv31w1.htm">Certification of CEO Pursuant to Section 302</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d60449exv31w2.htm">Certification of CFO Pursuant to Section 302</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d60449exv32w1.htm">Certification of CEO Pursuant to Section 906</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d60449exv32w2.htm">Certification of CFO Pursuant to Section 906</A></FONT></TD></TR>
</TABLE>
</DIV>

<DIV align="left">
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>PART I</B>
</DIV>

<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 1 &#150; DESCRIPTION OF BUSINESS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><B>Overview</B>

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lifevantage Corporation (the &#147;Company,&#148; &#147;LifeVantage,&#148; &#147;we,&#148; &#147;our,&#148; or &#147;us&#148;), manufactures,
markets, distributes, and sells Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, a patented dietary supplement intended to
increase the body&#146;s natural antioxidant protection by inducing multiple protective enzymes
including superoxide dismustase (SOD)&nbsp;and catalase (CAT). Our principal place of business is at
11545 West Bernardo Court, Suite&nbsp;301, San Diego, CA 92127, telephone (858)&nbsp;312-8000, fax (858)
312-8001. The reports filed with the Securities and Exchange Commission (&#147;SEC&#148;) by us and our
officers, directors, and significant shareholders are available for review on the SEC&#146;s website at
www.sec.gov. You may also read and copy materials that we file with the SEC at the SEC&#146;s Public
Reference Room at 100 F Street, NE, Washington, DC 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>History</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We were incorporated under Colorado law in June&nbsp;1988 under the name Andraplex Corporation. We
amended our name to Yaak River Resources, Inc. in January&nbsp;1992, to Lifeline Therapeutics, Inc. in
October&nbsp;2004, and to Lifevantage Corporation in November&nbsp;2006.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October&nbsp;26, 2004, we acquired approximately 81% of the outstanding common stock of Lifeline
Nutraceuticals Corporation (&#147;Lifeline Nutraceuticals&#148; or &#147;LNC&#148;), a privately-held Colorado
corporation, formed in July&nbsp;2003 (the &#147;Reorganization&#148;). The Reorganization was treated as a
reverse merger for accounting purposes. In the Reorganization:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We issued 15,385,110 shares of our common stock (representing about 94% of our
outstanding common stock after the Reorganization) to eleven persons in exchange for
their ownership interest in Lifeline Nutraceuticals.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We agreed to exchange $240,000 in new promissory notes for a like amount of
convertible debt obligations of Lifeline Nutraceuticals.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We agreed to exchange $559,000 in new promissory notes for a like amount of bridge
loan note obligations of Lifeline Nutraceuticals.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the Reorganization described above, LifeVantage owned 81% of the outstanding
common stock of Lifeline Nutraceuticals. Subsequent to the Reorganization, in March&nbsp;2005 we
completed the acquisition of the remaining 19% minority shareholder interest in Lifeline
Nutraceuticals. LifeVantage currently owns 100% of the common stock of Lifeline Nutraceuticals.
As a result of the Reorganization, our fiscal year end became June&nbsp;30. LNC developed and holds the
intellectual property rights to Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Our Product</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We developed our primary product, Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, a proprietary blend of ingredients
that has (through studies on animals and humans) demonstrated the ability to induce production of
multiple protective enzymes including SOD and CAT, in brain, liver, and blood, the primary
battlefields for oxidative stress. Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> combats oxidative stress to the human
body by inducing the production of SOD and CAT. Oxidative stress refers to the cellular and tissue
damage caused by chemically reactive oxygen radicals formed as a natural consequence of cellular
metabolism. Oxidative stress is widely believed to play a key role in the aging process, and the
body&#146;s defenses against oxidative stress and free radicals decrease with age.
Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> is marketed as a &#147;dietary supplement,&#148; as defined in Section&nbsp;3
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">of the Dietary Supplement Health and Education Act of 1994 (&#147;DSHEA&#148;), codified as &#167; 201(ff) of
the Federal Food, Drug, and Cosmetic Act (&#147;FFDCA&#148;) (21 U.S.C. &#167; 321(ff)). The name
Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> is derived from &#147;promoting the tandem&#148; co-regulation of the body&#146;s
antioxidant enzymes including SOD and CAT. Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> and the related intellectual
property are held by our wholly-owned subsidiary LNC.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Oxidative stress results from the fact that we breathe air and utilize oxygen to generate
energy. A small percentage of the oxygen we utilize generates toxic oxygen free radicals that
damage the cells and tissues of the human body and consequently negatively impact our general
health. Oxidative stress refers to the cellular and tissue damage caused by chemically reactive
oxygen radicals formed as a natural consequence of cellular metabolism. These reactive oxygen
species (ROS)&nbsp;and free radicals can be elevated under a wide variety of conditions, including
radiation, UV light, smoking, excessive alcohol consumption, certain medical conditions such as
neurodegenerative diseases and diabetes, and advancing age.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Elevated ROS levels inflict structural damage to nucleic acid, lipid and carbohydrate and
protein components of cells, thereby directly contributing to or exacerbating tissue dysfunction,
disease, and age-related debilitation. Normally, cellular antioxidant enzymes serve to inactivate
ROS and maintain their levels at those compatible with normal cell function. Important among these
enzymes are SOD and CAT. However, the levels of these protective antioxidant enzymes decrease with
age and also decrease in a number of disease conditions.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SOD is the body&#146;s most effective natural antioxidant. SOD works in conjunction with CAT, and
under some circumstances, the balance may be important. A by-product of SOD&#146;s potent antioxidant
activity is hydrogen peroxide, a dangerous substance that needs to be subsequently converted into
water and oxygen by CAT. Together, these two enzymes constitute the first line of defense and
repair for the body. Scientists have long realized that increasing levels of SOD and CAT is the
key to fighting oxidative stress, disease, and aging, however, SOD and CAT oral supplements by
themselves can neither be absorbed or work in conjunction with each other in one safe,
orally-available pill.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The role of oxidative stress in the body is very significant, as illustrated by the following
excerpts from a recent scientific journal article:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&#147;Oxidative damage is, if not the key factor, certainly a major factor in Alzheimer Disease. As
such, therapeutic modalities encompassing antioxidants may be an effective approach to the
treatment of neurodegenerative diseases and delay the aging process.&#148;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&#147;...it is clear that oxidative damage is not simply a byproduct or end product of neuronal
degenerative process but, more likely, the direct initiation factor in neurodegeneration&#148;.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">Alzheimer Disease (&#147;AD&#148;) affects &#147;...4&nbsp;million diseased persons in the United States and 18&nbsp;million
worldwide...&#148; &#147;AD affects 10-15% of individuals 65&nbsp;years old and up, and up to 47% of individuals
over the age of 80&#148;.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&#147;A wide range of major diseases closely related to free radical damage, such as cancer,
heart/artery disease, essential hypertension, AD, cataracts, diabetes, Parkinson&#146;s disease,
arthritis and inflammatory disease, as well as aging itself, are now believed to be caused in part
or entirely by free radical damage.&#148;
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">Source: Prevention and treatment of Alzheimer Disease and Aging: Antioxidants, Quan Liu, Fang Xie,
Raj Rolston, Paula I. Moreira, Akihiko Numomura, Xiongvie Zhu, Mark A. Smith and George Perry,
<I>Mini-Reviews in Medicinal Chemistry</I>, 2007, Vol. 7, No.&nbsp;2, 171-180.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Protandim<B><SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP></B> is a unique antioxidant therapy. The patented dietary supplement,
formulated with five widely studied phytonutrients, increases the body&#146;s natural antioxidant
protection by inducing the production of naturally occurring protective enzymes, including SOD and
CAT. Oxidative stress occurs as a person ages, when subjected to environmental stresses, or as an
associated factor in certain illnesses. Thiobarbituric acid-reacting substances (&#147;TBARS&#148;) are
laboratory markers for oxidative stress in the body. Data from a scientific study, sponsored by
LifeVantage, shows in men and women that after 30&nbsp;days of taking Protandim<B><SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP></B>, the level
of circulating TBARS decreased an average of 40&nbsp;percent. With continued use, the decrease was
maintained at 120&nbsp;days. For more information, please visit our website at
<U>www.protandim.com</U>; however, information found on our website is not incorporated by
reference into this Report. Our web site address is included in this Report as an inactive textual
reference only.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Our Business Model</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The primary manufacturing, fulfillment, and shipping components of our business are outsourced
to companies we believe possess a high degree of expertise. One advantage of outsourcing is a more
direct correlation of the costs we incur to our level of product sales versus the relatively high
fixed costs of building our own infrastructure to accomplish these same tasks. Another advantage
of this structure is to minimize our commitment of resources to human capital required to manage
these operational components successfully. Outsourcing also provides additional capacity without
significant advance notice and often at an incremental price lower than the unit prices for the
base service.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Manufacturing</I>. We retained Nexgen Pharma/Anabolic Laboratories of Colorado Springs, Colorado
(&#147;Nexgen&#148;), formerly The Chemins Company prior to Chemins&#146; acquisition by Nexgen in August&nbsp;2007, to
produce Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> under a contract manufacturing agreement dated February&nbsp;2004 and
amended January&nbsp;17, 2005.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nexgen has significant experience in manufacturing dietary supplements and is one of the
leading contract manufacturers in the country. Its plant follows strict current good manufacturing
practices (&#147;cGMP&#148;) regulations for foods in general. The Company continues to evaluate other
manufacturing options to keep costs low and quality high.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We paid Nexgen a deposit of $1,190,000 in Third Quarter of fiscal year 2005 to procure
sufficient raw materials to manufacture one million bottles of Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, to acquire
packing and shipping materials and to commence the manufacturing and packaging process for 500,000
bottles of Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>. The deposit with Nexgen is reduced as product is sold. As of
June&nbsp;30, 2007, the Company&#146;s deposit with Nexgen was $388,791 and as of June&nbsp;30, 2008, the deposit
was $277,979.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nexgen delivers product to us based on our purchase orders. Through June&nbsp;30, 2008, Nexgen had
shipped or delivered approximately 85,000 bottles of Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> to our fulfillment
center and retail distributors. As of June&nbsp;30, 2008, a total of 446,000 bottles have been shipped
and an additional 54,000 bottles remain to be shipped from the initial 500,000-bottle order.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Through June&nbsp;30, 2008, we have paid Nexgen approximately $2,400,000 for the above delivered
bottles, which includes the deposit for the purchase of raw materials and packaging materials for a
total of one million bottles of Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Marketing</I>. We market Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> through TV, radio, print and internet
advertising.&nbsp; In the past, the Company and Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> have been discussed on a
nationally-televised news program, which was received with great response.&nbsp; During fiscal 2008, we
engaged a nationally recognized creative consultant to build the marketing message and to launch a
direct response television campaign for the Company to recreate the excitement and response that
resulted from Primetime. We also initiated public relations efforts and contracted with a
prominent marketing and
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">communications expert with significant industry experience. &nbsp;In addition, we regularly train
and educate customer service representatives to correctly and appropriately represent the product
to consumers.&nbsp; We have a sales, marketing, public relations and customer service group consisting
of three full-time employees and three outside contractors. We also utilize a number of retail
sales brokers throughout the United States.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Sales</I>. Protandim&#174; is sold direct to consumers through telephone and web site orders, and
through retailers including General Nutrition Distribution, LP (&#147;GNC&#148;), Super Supplements,
drugstore.com, Vitamin Shoppe, Vitamin Cottage, Akin&#146;s Natural Foods Markets, and Chamberlin&#146;s
Natural Foods Markets. For retail customers, the Company analyzes its contracts to determine the
appropriate treatment for its recognition of revenue on a customer by customer basis.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We accept orders for our product through the Company&#146;s product website and an internal
customer service department utilizing a toll-free number. The website and customer service
department direct shipping orders to our fulfillment center, AtLast Fulfillment (&#147;AtLast&#148;), where
orders are filled and shipped either by AtLast or by United States Postal Service (&#147;USPS&#148;). AtLast
offers package tracking by toll-free number or online so that our customers or our customer service
department can determine the shipping status for each order of our product.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We offer a toll-free number to our customers to order product or ask questions. Our customer
service representatives answer customer calls and place orders in the Company&#146;s web order
processing system. The customer service representatives receive extensive training and are
particularly adept at &#147;up-selling&#148; customers to our auto-ship purchasing option, which is
attractive to us as this option allows us to realize recurring revenue on a monthly basis with no
further action required by the customer.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is our desire to serve our customers directly concerning sales orders and issues or
questions they may have with our product. Our customer service representatives are available to
respond to our customers&#146; needs, answer questions, track packages, provide refunds, and process
sales orders.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The operational backbone of the Company is our web order processing system, Heavy Metal -
Business Software for e-Commerce, which we developed with the services of Make-A-Store, Inc.
(&#147;MAS&#148;). The MAS system we have developed accepts and authorizes credit card submissions for both
online sales order requests as well as telephone order sales. Upon authorization, the MAS system
interacts with the operational system at AtLast, notifying the fulfillment center of sales shipping
needs through a web enabled application. The operational system at AtLast responds to MAS when the
shipment of the product has occurred, allowing MAS to &#147;capture&#148; the cost of the shipment from the
customer&#146;s credit card. MAS is maintained on an array of servers, with load balancers, firewalls,
and database server backups at MAS&#146; secure hosted facility. This facility provides a full-service,
managed hosting environment with approximately 80,000 square feet of total space, closed circuit
monitoring of all areas and entrances, coded access and 24-hour video security.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We commenced sales of Protandim&#174; in February&nbsp;2005. For the fiscal years ended June&nbsp;30, 2005,
2006, 2007 and 2008, we generated revenues of $2,353,795, $7,165,819, $5,050,988 and $3,200,174
respectively. For the fiscal year ended June&nbsp;30, 2005, we incurred a net loss of $5,822,397; for
the fiscal year ended July&nbsp;30, 2006, we incurred a net loss of $2,734,501; for the fiscal year
ended June&nbsp;30, 2007, we incurred a net loss of $3,693,578 and for the fiscal year ended June&nbsp;30,
2008 we incurred a net loss of $2,054,439. We have expended in excess of $21,000,000 in research
and development activities and overhead expenses since the incorporation of Lifeline Nutraceuticals
in July&nbsp;2003.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Research and Development</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A significant portion of our time, effort, and financial resources have been dedicated toward the
continuing research and development of our intellectual property and the development of Protandim&#174;.
As of July&nbsp;10, 2007, the United States Patent and Trademark Office (&#147;USPTO&#148;) granted patent number
7,241,461 to the Protandim&#174; formula. On June&nbsp;10, 2008 the USPTO granted a second patent for
alleviating inflammation and oxidative stress. In fiscal years ended 2008 and 2007, we spent about
$324,000 and $246,000 in Company-sponsored research and development. Several research and
development projects involving Protandim&#174; are currently ongoing with several institutions including
the University of Colorado at Denver Health Science Center (&#147;UCDHSC&#148;), University of Minnesota&#146;s
Masonic Cancer Center, Ohio State University, University Hospital in Brno, Czech Republic,
University of Michigan and Louisiana State University.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>The U.S. Dietary Supplement Market</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;According to the <I>Nutrition Business Journal</I>, the U.S. supplement market was estimated to be
over $23.7&nbsp;billion in 2007 as reflected in the following charts:
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<IMG src="d60449d6044901.gif" alt="(PERFORMANCE GRAPH)">
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Source: <I>Nutrition Business Journal</I>, June/July, 2008
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><I>2007 U.S. Nutrition Industry Revenues</I></B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt; font-weight: bold" valign="bottom">
    <TD nowrap align="left">2007</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Retail-Nat/Spec</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Retail-MM</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Mail Order</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">MLM</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Practitioner</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Internet</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Total</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Supplements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,526</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,370</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,844</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">747</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,718</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Natural &#038; Organic
Food</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,088</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,491</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,661</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Functional Foods</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,449</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">255</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">158</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,338</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">N&#038;OPC, Household</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,360</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">267</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">336</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">196</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,232</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="29" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff; font-weight: bold">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31,017</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,783</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,695</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,112</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,220</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">93,949</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><i>Source:</i>
Nutrition Business Journal <i>primary research includes</i> NBJ <i>survey of natural food,
supplement and NPC manufacturers, distributors, MLM firms, mail order, Internet and raw material
companies and numerous interviews with major retailers (Wal-Mart, Costco, etc.), manufacturers,
suppliers and industry experts. Secondary sources include Information
Resources Inc.,</i> The Natural
Foods Merchandiser, Whole Foods Magazine, OTC Update, <i>SPINS, The
Nielsen Co., company data and
others. Note: To avoid double counting,</i> NBJ <i>classifies soymilk and nutrition bars as
functional,
not as natural &#038; organic, foods and beverages, although both are included in natural &#038;
organic
totals cited in NBJ elsewhere. Nat/Spec represents natural, health food, supplement and specialty
retail outlets, including Whole Foods, GNC, sports nutrition stores,
etc. MM represents mass market
or FDMCC or food/grocery, drug, mass merchandise, club and convenience stores, including Wal-Mart,
Costco, etc. Mail order represents catalogs, direct mail and direct
response TV and radio.
Practitioners represent conventional and alternative health
practitioners selling to their patients,
athletic trainers, beauticians, etc. ($mil, consumer sales)</i>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Source: <I>Nutrition Business Journal</I>, June/July, 2008
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2007, supplement companies were faced with two of the most important pieces of federal
regulation that the industry has seen in more than a decade: the publication of the final good
manufacturing practice (&#147;GMP&#148;) rules and the implementation of the serious adverse event reporting
(&#147;SAER&#148;) law. Both of these regulations give the government the power to expose problematic
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">companies and will potentially improve both consumers&#146; and the medical-establishment&#146;s
perceptions of the industry.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">The
Natural Marketing Institute&#146;s
<i>9<SUP style="font-size: 85%; vertical-align: text-top">th</SUP>
Edition Health and Wellness Trends Report</i> confirms
that the growth in the supplement market is driven by a number of factors, including:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">o</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>increased awareness of the health benefits of dietary supplements;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">o</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a trend toward preventive health care;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">o</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an increase in the number of older Americans; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">o</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>health care consumers&#146; interest in managing their own health needs.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Source: <I>Nutrition Business Journal</I>, June/July, 2008
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><B>Target Market</B>

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We analyzed the Protandim&#174; direct customer base to profile our customers. As a result of the
analysis, we found that the Protandim&#174; direct customers tend to be college educated, 45 to 74&nbsp;years
old, have a household income of over $75,000, own a home, reside in the coastal areas, and have a
net worth of over $250,000.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This profile is very similar to the Protandim&#174; target market: the health and wellness or core
wellness market segment. This segment fits the profile of the baby boomer market, but it is more
specifically focused on those that care about their health and have both a desire and the means to
do something about it, and includes some people that are older and younger than the baby boomers.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Just under 11,000 Americans turn 50 every day, and Americans now expect longer life-spans and
a better quality of life. Americans over the age of 50 represent over $525&nbsp;billion per year in
direct healthcare spending. These individuals are time crunched, creating high expectations for
convenience, balance, and control.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Women in the core wellness segment tend to be proactive about their health, and do things to
lower health risks and prevent disease. They also tend to be engaged in a healthy, active
lifestyle, consume organic or natural foods, are positively pre-disposed to and/or are currently
taking natural supplements, and they are more in tune with their body and do not wait until they
get sick before they adjust any aspect of their lifestyle. Men are also part of this group and
men&#146;s attitude toward aging is rapidly changing. In the past men were content to let the aging
process happen, but now men are showing a greater willingness to be proactive about maintaining
good health.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Pricing</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LifeVantage has established the direct sale price of Protandim&#174; at $49.95 for a month&#146;s supply
of thirty caplets and $89.95 for a three-month&#146;s supply of ninety caplets. Price discounts are
used for monthly and quarterly auto-ship options and other promotions. Products sold through the
retail channels are sold to retailers at a discount.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Competition</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although we believe that Protandim&#174; reflects a unique product in the nutraceutical industry,
there are a number of potential Protandim&#174; competitors.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vitamin C, Vitamin E, Coenzyme Q-10, and other sources of exogenous antioxidants are often
considered competitors of Protandim&#174;. We do not consider these substances to be competitors
because they are non-enzymatic oxygen radical scavengers and do not increase the body&#146;s enzymatic
elimination of oxidants. Our research indicates that Protandim&#174; increases production of natural
antioxidant enzymes, such as SOD and CAT, within the cells of the body. Oxygen is consumed by the
mitochondria, which is where oxidative stress is at its worst. We
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">believe that the body&#146;s internal antioxidant enzymes, produced at homeostatic levels, provide
a better defense against oxidative stress than exogenous sources of antioxidants.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are many companies performing research into antioxidants, and these companies are
intensely competitive. At least one entity is currently marketing a direct competitor to
Protandim<I><SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP></I>, and it is highly likely that one or more additional entities will develop, purchase or
license from a third party, competitive products along the lines of our focus. Thus, we expect
that we will be subject to significant competition that will intensify as these markets develop.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Many of our actual and potential competitors have longer operating histories and possess
greater name recognition, larger customer bases, and significantly greater financial, technical,
and marketing resources than we do. As the dietary supplement industry grows and changes,
retailers may align themselves with larger suppliers who may be more financially stable, market a
broad portfolio of products or offer better customer service. Competition with companies of this
nature could materially adversely affect our business, operating results, or financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Product Liability and Other Insurance</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have product liability insurance coverage for Protandim&#174; that we believe is adequate to
protect us. We have also obtained commercial property and liability coverage, as well as
directors&#146; and officers&#146; liability insurance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Intellectual Property, Patents, and Royalty Agreements</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> is a proprietary, patented dietary supplement formulation for enhancing
antioxidant enzymes including SOD and CAT. The patent and patent applications protecting this
formulation are held by our wholly-owned subsidiary, Lifeline Nutraceuticals.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We use commercially reasonable efforts to protect our intellectual property and license rights
through patent protection, trade secrets, and contractual protections, and intend to continue to
develop a strong brand identity in the Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> mark. Although we do not currently
license our intellectual property to any third parties, we may choose to provide such licensing
arrangements in the future to provide a potential new revenue source.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our intellectual property is covered, in part, by U.S. Patent No.&nbsp;U.S. 7,241,461
&#147;Preparation of composition to alleviate inflammation and oxidative stress on a mammal&#148; issued on
July&nbsp;10, 2007 and, most recently, U.S. patent No.&nbsp;7,384,655 a continuation of U.S. patent No.
7,241,461, issued on June&nbsp;10, 2008 An additional U.S. Utility Patent application is on file with
the U.S. Patent and Trademark Office. A PCT International Patent Application is also on file. The
Company&#146;s patents and patent applications claim the benefit of priority of seven U.S. provisional
patent applications and are directed to compositions, methods, and methods of manufacture. The
earliest filing date for this family of patent applications is March&nbsp;23, 2004. The term of the
granted patent is through March&nbsp;23, 2025. The expected term of the outstanding patent applications
is through March&nbsp;23, 2025 assuming there are no term extensions.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> is a registered trademark in the United States, Canada and Taiwan. We
have applied for protection of the Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> trademark in China, and the European
Community. We do not know with reasonable certainty the timing of the final grant or denial of the
applications for registration of the Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> mark in these countries.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have applied for the trademark LifeVantage in the United States, Canada and through the
World Intellectual Property Organization (WIPO). We have registered the mark LifeVantage through
WIPO in Australia, China, Japan and Korea.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->10<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Governmental Approval and Regulations</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The formulation, manufacturing, packaging, labeling, and advertising of Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
are subject to regulation by federal agencies, including the Food and Drug Administration (&#147;FDA&#148;),
the Federal Trade Commission (&#147;FTC&#148;), and also by various state and local agencies. Although the
Company is not currently required to obtain FDA or FTC approval to sell Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP><I>, </I>the
FDA, pursuant to the Federal Food, Drug, and Cosmetic Act (&#147;FFDCA&#148;), which includes the Dietary
Supplement Health and Education Act (&#147;DSHEA&#148;), primarily regulates the formulation, manufacturing,
packaging, and labeling of the product, while the FTC primarily regulates the advertising and
marketing of the product.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> is marketed as a &#147;dietary supplement&#148; as defined in the DSHEA. The
DSHEA is intended to promote access to safe, quality dietary supplements, and information about
dietary supplements. The U.S. Congress has amended the FFDCA several times with respect to dietary
supplements, in particular by the DSHEA. In 1994, the DSHEA established a new framework governing
the composition and labeling of dietary supplements. With respect to composition, the DSHEA
defined &#147;dietary supplements&#148; as including vitamins, minerals, herbs, other botanicals, amino
acids, and other dietary substances for human use to supplement the diet, as well as concentrates,
constituents, extracts, or combinations of such dietary ingredients. Under the DSHEA, a dietary
supplement that contains a &#147;new dietary ingredient&#148; (defined as a dietary ingredient not marketed
in the United States before October&nbsp;15, 1994) must have a history of human use or other evidence of
safety establishing that it is &#147;reasonably expected&#148; by the manufacturer to be safe prior to
marketing the product. The manufacturer of a dietary supplement must notify the FDA at least 75
days before marketing products containing new dietary ingredients and provide the FDA with the
information upon which the manufacturer based its conclusion that the product has a reasonable
expectation of safety. The FDA may not accept the evidence of safety for any new dietary
ingredient, and the FDA&#146;s refusal to accept such evidence could prevent the marketing of such
dietary ingredients.
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><U>FDA Regulations Applicable to the Formulation, Manufacturing, Packaging, and Labeling of
Protandim&#174; </U>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The DSHEA permits statements of nutritional support to be included in labeling for dietary
supplements without FDA pre-approval. Such statements may describe how a particular dietary
ingredient may affect the structure, function, or general well-being of the body or the mechanism
of action by which dietary ingredients affect the foregoing. Such statements may not state that a
dietary supplement will diagnose, cure, mitigate, treat, or prevent a disease unless such claim has
been reviewed and approved by the FDA, either as a &#147;health claim&#148; or as a claim for an approved
drug. A company that uses a statement of nutritional support in labeling must possess evidence
substantiating that the statement is truthful and not misleading. The FDA may determine that a
particular statement of nutritional support that a company wants to use is an illegal claim for an
unapproved new drug or an unauthorized version of a health claim. Such a determination might
prevent a company from making the claim.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The DSHEA also permits certain third-party literature, for example a reprint of a
peer-reviewed scientific publication, to be used &#147;in connection with the sale of a dietary
supplement to consumers&#148; without the literature being subject to regulation as labeling. However,
such literature must not be false or misleading, the literature may not promote a particular
manufacturer, or brand of dietary supplement and it must include a balanced view of the available
scientific information on the subject matter, among other requirements. While we exercise care in
the dissemination of all such third party literature in connection with Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, we
cannot assure you that all third party literature would be found by the FDA to satisfy all of these
requirements. If we fail to satisfy any of
these applicable requirements, the FDA could prevent the use of certain literature and subject
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->11<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> to regulation as an unapproved new drug. We could also be subject to adverse
actions by other third parties.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to the risk that the FDA may take enforcement action against us for one or more
violations of the FFDCA. We have to comply with the FFDCA, including the DSHEA, and all applicable
FDA regulations. Any allegations of non-compliance may result in time-consuming and expensive
defense of our activities. An enforcement action could include a warning letter that informs us of
alleged violations, such as selling a misbranded product, an adulterated product, or an unapproved
new drug. Although we would be entitled to take corrective action in response to any such warning
letter, the fact that a warning letter had been issued to us from the FDA would be made available
to the public. That information could affect our relationships with our investors, vendors, and
consumers. The FDA could also initiate many additional types of enforcement actions that would be
far more detrimental to our business than the issuance of a warning letter, including actions for
product seizure, inspection, and/or criminal prosecution. Because we are not required to submit
all product labeling to the FDA before we sell our dietary supplement, we cannot give any assurance
that FDA enforcement action will not occur.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>FTC Regulations Applicable to the Advertising and Marketing of Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP></U>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advertising and marketing of products is subject to regulation by the FTC under the Federal
Trade Commission Act (&#147;FTC Act&#148;). Section&nbsp;5 of the FTC Act prohibits unfair methods of competition
and unfair or deceptive acts or practices in or affecting commerce. Section&nbsp;12 of the FTC Act
provides that disseminating any false advertisement pertaining to drugs or foods, which would
include dietary supplements, is an unfair or deceptive act or practice. Under the FTC&#146;s
Substantiation Doctrine, an advertiser is required to have a &#147;reasonable basis&#148; for all express and
implied product claims before the claims are made. Failure to adequately substantiate claims may
be considered either deceptive or unfair practices. Pursuant to this FTC requirement, we are
required to have adequate substantiation for all material advertising claims made for our products.
The FTC routinely reviews advertising and websites to identify significant questionable
advertising claims and practices, and competitors often inform the FTC when they believe other
competitors are violating the FTC Act. If the FTC initiates an investigation to determine the
support for a claim, the FTC can initiate pre-complaint discovery that may be nonpublic in nature.
Such an investigation may (i)&nbsp;be very expensive to defend, (ii)&nbsp;be lengthy, and (iii)&nbsp;result in one
or more adverse rulings by a court, administrative law judge, or in a publicly disclosed consent
decree.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our telemarketing activities must comply with the FTC&#146;s Telemarketing Sales Rule, 16 CFR Part
310, and additional telemarketing and marketing statutes and regulations of the FTC and of various
states. Because these activities, in general, are in the public eye and because it may be
difficult to ensure compliance with these laws and regulations by the individuals who actually make
and receive such calls, there is a risk that we could be the subject of investigation and other
enforcement activities that may be brought by the FTC and state agencies. We regularly train and
educate telemarketing representatives to correctly and appropriately represent our product.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to federal regulation in the U. S., each state has enacted its own &#147;Little FTC
Act&#148; to regulate sales and advertising and each state has enacted its own food and drug laws. We
may receive requests to supply information regarding our sales or advertising to state regulatory
agencies. We remain subject to the risk that, in one or more of our present or future markets, our
products, sales, and advertising could be found not to be in compliance with applicable laws and
regulations. If we fail to comply with these laws and regulations, it could have a material
adverse effect on our
business in a particular market or in general. In addition, these laws and regulations could
affect our ability to enter new markets.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->12<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>The Bioterrorism Act</U>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June&nbsp;2002, Congress enacted the Public Health Security and Bioterrorism Preparedness and
Response Act of 2002 (the &#147;Bioterrorism Act&#148;). The Bioterrorism Act contained new requirements
with regard to the sale and importation of food products in the United States:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Mandatory registration with the FDA of all food manufacturers.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Prior notice to regulators of inbound food shipments.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Recordkeeping requirements, and grant of access to the FDA of applicable
records.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Grant of detention authority to the FDA of food products in certain
circumstances.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the record keeping requirements, LifeVantage is considered to be a &#147;nontransporter&#148; of
Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> and must maintain certain records required of nontransporters. We are in the
process of ensuring that we keep all appropriate records required by the Bioterrorism Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Potential FDA and Other Regulation</U>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We could become subject to additional laws or regulations administered by the FDA, FTC, or by
other federal, state, or local regulatory authorities, to the repeal of laws or regulations that we
consider favorable, such as the DSHEA, or to more stringent interpretations of current laws or
regulations. For example, the FDA is currently developing guidance for the industry to clarify the
FDA&#146;s interpretation of the new dietary ingredient notification requirements, which may raise new
and significant regulatory barriers for new dietary ingredients. Increased FDA enforcement could
lead the FDA to challenge dietary ingredients already on the market as illegal under the FFDCA
because of the failure to file a new dietary ingredient notification.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2007, the FDA issued final rules for cGMP regulations for the dietary supplement industry.
The final cGMPs require quality control provisions that are similar to cGMPs for drugs and
over-the-counter products. Our contract manufacturer, Nexgen, is a medium sized company. Medium
sized companies have been granted two years to comply with the new cGMP requirements. Nexgen is on
track to meet the requirements for dietary supplements within the two-year period.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, in 2007 the FDA implemented the serious adverse event reporting (&#147;SAER&#148;) law.
This law gives the federal government the power to expose problematic companies and will
potentially improve both consumers&#146; and the medical establishment&#146;s perceptions of the industry.
SAER requires manufacturers, packers, or distributors whose name appears on a nonprescription drug
or dietary supplement product label to notify the FDA of any serious adverse event report
associated with the product&#146;s use within 15 business days of receipt of such information.&nbsp; &nbsp;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Employees</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of June&nbsp;30, 2008, we had eight full time employees, including two officers, all of whom
are leased through Administaff. We outsource our manufacturing and distribution operations to
minimize the number of employees we have. We may in the future hire additional employees for
marketing, customer service and accounting.
</DIV>
<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM&nbsp;2 &#150; DESCRIPTION OF PROPERTIES</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><B>Corporate Office</B>

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The lease for the Greenwood Village office expired July&nbsp;31, 2008 and the Company entered a
five (5)&nbsp;year lease in San Diego, California. Pursuant to the agreement, we prepaid rent of
$7,850. Monthly rent payments began July&nbsp;1, 2008 and are as follows: $7,850 for July&nbsp;2008; rent is
abated during the months of August, September and October&nbsp;2008, $7,850 per month from November&nbsp;2008
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->13<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">through June&nbsp;2009; $8,125 per month from July&nbsp;2009 through June&nbsp;2010; $8,409 per month from July
2010 through June&nbsp;2011; $8,073 per month from July&nbsp;2011 through June&nbsp;2012; and $9,008 per month
from July&nbsp;2012 through June&nbsp;2013.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the Company entered into a six-month sublease for office space in Littleton,
Colorado at a rate of $842 per month effective July&nbsp;7, 2008, renewable on a month-to-month basis
following the initial term. Effective July&nbsp;16, 2008, the Company entered into a lease agreement
for additional adjoining space in Littleton, Colorado for three months at a rate of $630 per month,
renewable on a month-to-month basis following the initial term.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Warehouse Facility</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective December&nbsp;2007, our warehouse facility agreement with UPS expired. We entered into
an agreement effective January&nbsp;2008 with AtLast Fulfillment, pursuant to which we lease warehouse
space in their climate-controlled warehouse in Denver, Colorado pursuant to a renewable agreement
expiring in December&nbsp;2010.
</DIV>
<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM&nbsp;3 &#150; LEGAL PROCEEDINGS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.
</DIV>
<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 4 &#150; SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->14<!-- /Folio -->
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART II</B>
</DIV>

<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 5
&#150; MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES
OF EQUITY SECURITIES</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><B>Market Information and Holders</B>

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since February&nbsp;2, 2007, our common stock has been traded on the OTC Bulletin Board in the
United States under the symbol &#147;LFVN&#148;. From October&nbsp;5, 2004 to February&nbsp;1, 2007, our common stock
was traded on the OTC Bulletin Board in the United States under the symbol &#147;LFLT.&#148;
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below sets forth for the fiscal quarters indicated the reported high and low sale
prices of our common stock, as reported on the OTC Bulletin Board. These prices were reported by
an online service, reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not represent actual transactions. Our fiscal year-end is June&nbsp;30.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000">2007</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">High</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Low</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">High</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Low</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">First Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1.40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.69</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Second Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Third Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fourth Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.16</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our common stock is issued in registered form and the following information is taken from the
records of our current transfer agent, Computershare Trust Company, Inc. located in Golden,
Colorado. As of June&nbsp;30, 2008, we had 249 shareholders on record and 24,766,117 shares of common
stock outstanding. This does not include an unknown number of persons who hold shares through
brokers and dealers in street name and who are not listed on our shareholder records.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Dividends</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have not declared any dividends on any class of our equity securities since incorporation
and we do not anticipate that we will declare any dividends in the foreseeable future. Our present
policy is to retain future earnings (if any) for use in our operations and the expansion of our
business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Securities Authorized for Issuance under Equity Compensation Plans</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(c) Number of securities</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(b) Weighted-</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>remaining available for</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(a) Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>average exercise</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>future issuance under</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>securities to be issued</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>price of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>equity compensation</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>upon exercise of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>outstanding</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>plans (excluding</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>outstanding options,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>options, warrants</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>securities reflected in</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Plan Category</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>warrants and rights</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>and rights</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>column (a))</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Equity compensation
plans approved by
security holders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,634,365</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,365,635</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Equity compensation
plans not approved
by security holders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,187,088</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,821,453</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,365,635</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>Consultant Warrants. </I>We granted compensation-based warrants to various consultants for services
rendered to the Company during the fiscal year ended June&nbsp;30, 2008. As of June&nbsp;30, 2008, unexpired
compensation-based warrants to purchase 3,187,088 shares of the Company&#146;s common stock were
outstanding.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->15<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 6
&#150; MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>You should read the following discussion and analysis in connection with our financial statements
and related notes beginning on page F-1 following Part&nbsp;III of this annual report.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><B>Overview</B>

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This management&#146;s discussion and analysis discusses the financial condition and results of
operations of LifeVantage (the &#147;Company&#148;, &#147;LifeVantage&#148; or &#147;we&#148;, &#147;us&#148; or &#147;our&#148;) and its
wholly-owned subsidiary, Lifeline Nutraceuticals Corporation (&#147;Lifeline Nutraceuticals&#148; or &#147;LNC&#148;).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At present, we primarily have a single product, Protandim&#174;. We developed Protandim&#174;, a
proprietary blend of ingredients that has (through studies on animals and humans) demonstrated the
ability to increase the production of antioxidant enzymes including Superoxide Dismutase (&#147;SOD&#148;)
and Catalase (&#147;CAT&#148;) in brain, liver, and blood, the primary battlefields for oxidative stress.
Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> is designed to induce the human body to produce more of its own catalytic
antioxidants, and to decrease the process of lipid peroxidation, an indicator of oxidative stress.
Each component of Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> was selected for its ability to meet these criteria. Low,
safe doses of each component help prevent unwanted additional effects that might be associated with
one or another of the components, none of which have been seen with the formulation.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We commenced sales of an Omega 3 fish oil product containing EPA and DHA during the fiscal
year, but to date sales have been negligible. In the future, we expect to explore additional
natural products that fit within our business model.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We sell Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> directly to individuals as well as to retail stores. We began
significant sales of Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> in the fourth quarter ended June&nbsp;30, 2005. Since June
2005, sales of Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> have declined on a monthly basis as we have not been
successful in developing a marketing message that has resonated with the target audience.
Beginning in May, 2008, monthly sales of Protandim appear to have stabilized. Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
net sales totaled approximately $3,200,000 for the fiscal year ended June&nbsp;30, 2008.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the first quarter of fiscal year 2009, the Company will recognize all deferred revenue and
expenses from GNC, as the Company has determined it has sufficient history to reasonably estimate
returns and meets the retail sales recognition requirements pursuant to Staff Accounting Bulletin
No.&nbsp;104, <I>Revenue Recognition, corrected copy </I>(&#147;SAB 104&#148;).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In July&nbsp;2006, LifeVantage entered into an agreement with CVS for the sale of
Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> throughout the CVS store network. During fiscal year June&nbsp;30, 2008, the
Company agreed to accept, pursuant to a return authorization, a portion of Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
from CVS stores that was not sold. Sufficient bottles were returned by CVS to the Company to offset
the receivable from CVS, both parties agreed to waive any further obligations of the other and the
supply arrangement was terminated.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our research efforts to date have been focused on investigating various aspects and
consequences of the imbalance of oxidants and antioxidants, an abnormality which is a central
underlying feature in many disorders. We intend to continue our research, development, and
documentation of the efficacy of Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> to provide credibility to the market. We
also anticipate undertaking research, development, testing, and licensing efforts to be able to
introduce additional products in the future, although we cannot offer any assurance that we will be
successful in this endeavor.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->16<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ongoing research and development projects involving Protandim&#174; are currently in various stages
of completion with several institutions including the University of Colorado at Denver Health
Science Center, University of Minnesota&#146;s Masonic Cancer Center, Ohio State University, University
Hospital in Brno, Czech Republic, University of Michigan and Louisiana State University. The
studies relate to various conditions including pulmonary hypertension, non-alcoholic fatty liver
disease, Duchenne muscular dystrophy, coronary artery bypass graft failure, renal failure,
diabetes, and photoaging of the skin. Another study, conducted by a prominent dermatologist using
Protandim&#174; and LP Derma Complex, is examining the relationship between anti-aging and the skin&#146;s
natural ability to rejuvenate at the cellular level.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The primary manufacturing, fulfillment, and shipping components of our business are outsourced
to companies we believe possess a high degree of expertise. Through outsourcing, we hope to
achieve a more direct correlation between the costs we incur and our level of product sales, versus
the relatively high fixed costs of building our own infrastructure to accomplish these same tasks.
Outsourcing also helps to minimize our commitment of resources to human capital required to manage
these operational components successfully. Outsourcing also provides additional capacity without
significant advance notice and often at an incremental price lower than the unit prices for the
base service.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our expenditures have consisted primarily of marketing expenses, operating expenses, payroll
and professional fees, customer service, research and development and product manufacturing for the
marketing and sale of Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We began a turn-around strategy in January&nbsp;2007 to reduce our cash drain by cutting spending
and lowering our operational expenses to a more appropriate level. This effort was successful in
decreasing the cash expenses of the Company until a new marketing strategy could be developed and
implemented. As part of the Company&#146;s new marketing strategy, a direct to consumer test of radio
and TV commercials commenced during the fourth quarter of fiscal 2008 and advertising costs in the
fourth quarter have risen as a result.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An additional part of this turnaround strategy has been to reduce the erosion of our direct
sales, which has continued since our direct sales first began in June&nbsp;2005. Through the addition
of key personnel and implementation of new, more effective customer service retention and recapture
programs, we will attempt to reduce the direct sales erosion experienced during fiscal 2007 and
2008.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also began to focus on building the sales and re-establishing positive sales momentum. In
this regard, we have taken steps that we believe will help to increase sales. Such steps include
the addition of new marketing personnel and industry experts, entering into license agreements,
expanding distribution, re-vamping our internet strategy and launching a direct response TV
campaign. In addition, we also are working on developing and improving investor relations. These
new strategies are being executed by David W. Brown, our new President and Chief Executive Officer,
who was hired in January&nbsp;2008, and who possesses significant industry experience.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Other Developments</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><U>Departure of Chief Executive Officer</U>

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective August&nbsp;31, 2007, James J. Krejci&#146;s positions as Chief Executive Officer and as Vice
Chairman and a member of our Board of Directors terminated.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><U>Hiring of Chief Executive Officer</U>

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company hired David Brown as its new President and Chief Executive Officer effective
January&nbsp;10, 2008. Mr.&nbsp;Brown has vast nutraceutical experience and was most recently the Managing
Director and Co-Founder of Nutrition Business Advisors, a firm founded in 2003 to provide strategic
consulting services, capital raising and full-service business development focused on the $130
billion Global Nutrition Industry. Prior to co-founding Nutrition Business Advisors, Mr.&nbsp;Brown was
President and Chief Executive Officer of Metabolife International. From 1994 to 2000, Mr.&nbsp;Brown
served as the President of Natural Balance, Inc., a Colorado-based dietary supplement company. Mr.
Brown began his career as a corporate attorney, first at the Los Angeles based firm of Kindel &#038;
Anderson, then at the Philadelphia based firm of Ballard, Spahr, Andrews &#038; Ingersoll. Mr.&nbsp;Brown
holds a Juris Doctorate from Cornell University and a Bachelors of Arts from Brigham Young
University.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with his appointment as President and Chief Executive Officer, Mr.&nbsp;Brown entered
into an Employment Agreement with the Company effective January&nbsp;10, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Changes in Certifying Accountant</U>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company dismissed Gordon, Hughes &#038; Banks, LLP as the Company&#146;s independent registered
public accounting firm effective as of January&nbsp;30, 2008. The Company appointed Ehrhardt Keefe
Steiner &#038; Hottman PC on January&nbsp;30, 2008 as its independent registered public accounting firm for
the fiscal year ended June&nbsp;30, 2008, beginning for the three months ended December&nbsp;31, 2007. The
decision to change accountants was recommended and approved by the Company&#146;s Board of Directors and
its Audit Committee on January&nbsp;30, 2008. There have been no disagreements with the Company&#146;s
accountants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>2007 Private Placement</U>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;26, and October&nbsp;31, 2007, the Company issued convertible debentures in a private
placement offering. The convertible debentures are convertible into the Company&#146;s common stock at
$0.20 per share during their term and at maturity, at the Company&#146;s option the debentures may be
repaid in full or converted into common stock at the lower $0.20 per share or the average trading
price for the 10&nbsp;days immediately prior to the maturity date. The Convertible Debentures bear
interest at 8&nbsp;percent per annum, and have a term of three years. Gross proceeds of $1,490,000 and
net proceeds of approximately $1,233,000, were distributed to the Company pursuant to the issuance
of convertible debentures in the private placement offering. The Company also issued warrants to
purchase shares of the Company&#146;s common stock at $0.30 per share in the private placement offering.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are using the proceeds from the offering for marketing, scientific research, development
and testing of Protandim&#174;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Re-Pricing of 2005 Private Placement Warrants </U>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective as of June&nbsp;28, 2007, we offered to reprice warrants to purchase 6,001,866 shares of
our common stock issued to investors in 2005 pursuant to a private placement offering (the &#147;2005
warrants&#148;). The 2005 warrants were originally exercisable at $2.00 and $2.50 per share by the
warrant holder and were repriced to be exercisable at $0.30 per share upon the execution of a
warrant amendment by the Company and the warrant holder. As of March&nbsp;31, 2008, holders of the
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">2005 warrants to purchase 3,395,706 shares of our common stock had executed a warrant
amendment, and 2005 warrants to purchase 3,395,706 shares of our common stock had been repriced to
be exercisable at $0.30 per share. The 2005 warrants expired on April&nbsp;18, 2008. As of the April
18, 2008 expiration date of the 2005 warrants, 1,283,083 were exercised.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><U>Nutranomics, Inc.</U>

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective January&nbsp;21, 2008, the Company entered into a marketing and licensing agreement with
Nutranomics, Inc. (&#147;Nutranomics&#148;) for the representation and distribution of Protandim into the
multi-billion dollar Asian market.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nutranomics has a proven record of accomplishment in obtaining wide distribution with leading
companies in the Asian market, including Miki Shoji, Japan&#146;s largest direct marketing company with
over 500,000 distributors. In addition, the company has strong relationships with Mitsui Busan,
Watakura, and Kanebo, through which Nutranomics distributes products in the Asian retail sector.
Sales through Nutranomics are expected to commence once regulatory approvals for the sale of our
product in Japan are received.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Year ended June&nbsp;30, 2008 Compared to the Year ended June&nbsp;30, 2007</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Sales. </I>We generated net sales of approximately $3,200,000 during the year ended June&nbsp;30, 2008
and approximately $5,051,000 during the year ended June&nbsp;30, 2007 from the sale of our primary
product, Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June&nbsp;2005, the Company and Protandim&#174; were discussed nationally on Primetime, which led to
substantial fiscal year 2006 sales. Since June&nbsp;2005, sales of Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> have declined
on a monthly basis as we have not been successful in developing a marketing message that has
resonated with the target audience. We sold approximately 84,000 units of Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
for the year ended June&nbsp;30, 2008, and approximately 118,000 units in the year ended June&nbsp;30, 2007.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Gross Margin. </I>Cost of sales were approximately $695,000 for the year ended June&nbsp;30, 2008, and
approximately $1,023,000 for the year ended June&nbsp;30, 2007, resulting in a gross margin of
approximately $2,505,000, or 78%, and approximately $4,028,000, or 80%, respectively. The slight
decrease in margin is due to the recognition of slightly higher direct cost of sales during the
year.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Operating Expenses. </I>Total operating expenses for the fiscal year ended June&nbsp;30, 2008 were
approximately $4,308,000 as compared to operating expenses of approximately $7,791,000 for the
fiscal year ended June&nbsp;30, 2007. Operating expenses consist of marketing and customer service
expenses, general and administrative expenses, research and development, and depreciation and
amortization expenses. Cost containment programs initiated during fiscal year 2007 and maintained
through 2008 contributed toward the decrease in operating expenses.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Marketing and Customer Service Expenses. </I>Marketing and customer service expense decreased
from approximately $2,991,000 in fiscal year 2007 to approximately $1,655,000 in fiscal year 2008.
This decrease was due to cost containment programs and a more targeted approach to marketing and
advertising.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>General and Administrative Expenses. </I>Our general and administrative expense decreased from
approximately $4,356,000 in fiscal year 2007 to $2,108,000 in fiscal year 2008. The decrease is
due to cost containment programs that had been implemented and the recognition of significant
non-cash compensation expense from the issuance of options and warrants under SFAS 123(R) during
fiscal 2007.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Research and Development. </I>Our research and development expenditures increased from
approximately $246,000 in fiscal year 2007 to approximately $324,000 in fiscal year 2008 as a
result of an increase in our research, development, and documentation of the efficacy of
Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Depreciation and Amortization Expense. </I>Depreciation and amortization expense increased from
approximately $92,000 in fiscal year 2007 to approximately $220,000 in fiscal year 2008. The
increase is primarily due to the commencement of the amortization of the Company&#146;s U.S. Patent
granted July&nbsp;10, 2007.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Net Other Income and Expense. </I>We recognized net other income of approximately $69,000 in
fiscal year 2007 as compared to net other expense of approximately $252,000 in fiscal year 2008.
The increase in other expense is largely the result of interest expense related to the 2007 private
placement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Net Loss. </I>As a result of lower expenses our net loss of approximately $(3,694,000) for the
fiscal year ended June&nbsp;30, 2007 decreased to a net loss of approximately $(2,054,000) for the
fiscal year ended June&nbsp;30, 2008.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our ability to finance future operations will depend on our existing liquidity (discussed in
more detail below) and, ultimately, on our ability to generate additional revenues and profits from
operations. However, even if we generate revenues at increasing levels, the revenues generated may
not be greater than the expenses we incur. Operating results will depend on several factors,
including the selling price of Protandim&#174;, the number of units of Protandim&#174; sold, the costs of
manufacturing and distributing Protandim&#174;, the costs of marketing and advertising, and other costs,
including corporate overhead, which we will incur.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Liquidity and Capital Resources</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our primary liquidity and capital resource requirements are to finance the cost of our planned
marketing efforts, the manufacture and sale of
Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> and to pay our general and
administrative expenses. Our primary sources of liquidity are cash flow from the sales of our
product and funds raised from our 2007 private placement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At June&nbsp;30, 2008, our available liquidity was approximately $1,297,000, including available
cash and cash equivalents and marketable securities. This represented an increase of approximately
$1,136,000 from the approximately $161,000 in cash, cash equivalents and marketable securities as
of June&nbsp;30, 2007. During the fiscal year ended June&nbsp;30, 2008, our net cash used by operating
activities was approximately $748,000 as compared to net cash used by operating activities of
approximately $2,920,000 during the fiscal year ended June&nbsp;30, 2007. The Company&#146;s cash used by
operating activities during the fiscal year ended June&nbsp;30, 2008 decreased primarily as a result of
cost savings initiatives implemented during the prior fiscal year.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the fiscal year ended June&nbsp;30, 2008, our net cash used by investing activities was
approximately $1,170,000 primarily due to the purchase of available-for-sale marketable securities.
The marketable securities include auction rate preferred securities (&#147;ARPS&#148;) of AA and AAA rated
closed-end funds. These marketable securities which historically have been extremely liquid have
been adversely affected by the broader national liquidity crisis. The Company considers these
securities as current, however, future economic events could cause a portion of these to be
classified as long term in nature. During the fiscal year ended June&nbsp;30, 2007, our net cash
provided by investing activities was approximately $2,855,000, primarily due to the sale and
redemption of available-for-sale marketable securities.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->20<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash provided by financing activities during the fiscal year ended June&nbsp;30, 2008 was
approximately $1,954,000, compared to cash used in financing activities of approximately $1,800
during the fiscal year ended June&nbsp;30, 2007. Cash provided in financing activities during the
fiscal years ended June&nbsp;30, 2008 was due to the proceeds from the Company&#146;s private placement of
convertible securities and proceeds from a revolving line of credit borrowed against the Company&#146;s
marketable securities. Cash used by financing activities during the fiscal year ended June&nbsp;30,
2007 was due to payments made under a capital lease obligation.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At June&nbsp;30, 2008, we had working capital (current assets minus current liabilities) of
approximately $817,000, compared to working capital of approximately ($46,000) at June&nbsp;30, 2007.
The increase in working capital was due to cash provided by the 2007 private placement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;26, and October&nbsp;31, 2007, the Company issued convertible debentures in a private
placement offering, which resulted in net proceeds received by the Company of approximately
$1,328,000. Based on the cost reduction initiatives that we have undertaken to conserve our cash
resources and the net proceeds received by the Company on September&nbsp;26 and October&nbsp;31, 2007, we
currently anticipate that our cash resources will be sufficient to fund our anticipated working
capital and capital expenditure needs through at least June&nbsp;30, 2009.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We maintain an investment portfolio of marketable securities that is managed by a professional
financial institution. The portfolio includes auction rate preferred securities (&#147;ARPS&#148;) of AA and
AAA rated closed-end funds. These marketable securities which historically have been extremely
liquid have been adversely affected by the broader national liquidity crisis. Based upon recent
redemptions, we believe the ARPS will be redeemed within the next twelve months.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We base our spending in part on our expectations of future revenue levels from the sale of
Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>. If our revenue for a particular period is lower than expected, we will take
further steps to reduce our cash operating expenses accordingly. Cash generated from operations has
been insufficient to satisfy our long-term liquidity requirements, which led us to seek additional
financing. Additional financing may be dilutive to our existing shareholders. In an effort to
conserve our cash resources, we initiated reductions in personnel, consulting fees, advertising,
and other general and administrative expenses. These measures have reduced the scope of our
planned operations during the later part of fiscal 2007 and the first nine months of fiscal 2008 by
reducing our advertising budget to promote Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We plan to use the proceeds received from the 2007 private placement offering to expand
marketing efforts, scientific studies, intellectual property protection and working capital in
effort to grow direct to consumer and retail revenue. However, our cash resources may run out
sooner than expected if our future revenue is lower than expected or our operating or other
expenses are higher than expected. If we are unable to increase revenues as planned or secure
additional financing, we may be required to further reduce the scope of our planned operations,
which could harm our business, financial condition and operating results. We may seek additional
financing to expedite our sales and marketing programs. Ant such additional financing may be
dilutive to our existing shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Critical Accounting Policies</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We prepare our financial statements in conformity with accounting principles generally
accepted in the United States of America. As such, we are required to make certain estimates,
judgments, and assumptions that we believe are reasonable based upon the information available.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->21<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">These estimates and assumptions affect the reported amounts of assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses during the periods
presented. Actual results could differ from these estimates. Our significant accounting policies
are described in Note 2 to our financial statements. Certain of these significant accounting
policies require us to make difficult, subjective, or complex judgments or estimates. We consider
an accounting estimate to be critical if (1)&nbsp;the accounting estimate requires us to make
assumptions about matters that were highly uncertain at the time the accounting estimate was made,
and (2)&nbsp;changes in the estimate that are reasonably likely to occur from period to period, or use
of different estimates that we reasonably could have used in the current period, would have a
material impact on our financial condition or results of operations.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are other items within our financial statements that require estimation, but are not
deemed critical as defined above. Changes in estimates used in these and other items could have a
material impact on our financial statements. Management has discussed the development and
selection of these critical accounting estimates with our board of directors, and the audit
committee has reviewed the following disclosures.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><U>Allowances for Product Returns</U>

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We record allowances for product returns at the time we ship the product. We base these
accruals on the historical return rate since the inception of our selling activities, and the
specific historical return patterns of the product. Our return rate is approximately 1&nbsp;percent of
sales.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We offer a 30-day, money back unconditional guarantee to all customers. As of June&nbsp;30, 2008,
our shipments of approximately $252,000 were subject to the money back guarantee. We replace
returned product damaged during shipment wholly at our cost, which historically has been
negligible.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We monitor our return estimate on an ongoing basis and revise the allowances to reflect our
experience. Our allowance for product returns was $97,700 on June&nbsp;30, 2008, compared with
approximately $112,600 on June&nbsp;30, 2007. To date, product expiration dates have not played any
role in product returns, and we do not expect they will in the future because it is unlikely that
we will ship product with an expiration date earlier than the latest allowable product return date.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><U>Inventory Valuation </U>

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We state inventories at the lower of cost or market on a first-in first-out basis. From time
to time we maintain a reserve for inventory obsolescence and we base this reserve on assumptions
about current and future product demand, inventory whose shelf life has expired, and market
conditions. From time to time we may be required to make additional reserves in the event there is
a change in any of these variables. We recorded no reserves for obsolete inventory as of June&nbsp;30,
2008 because our product has a shelf life of at least 3&nbsp;years based upon testing performed
quarterly in an accelerated aging chamber at our manufacturer&#146;s facility.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><U>Revenue Recognition </U>

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We ship the majority of our product directly to the consumer via UPS and receive substantially
all payment for these sales in the form of credit card charges. Revenue from direct product sales
to customers is recognized upon passage of title and risk of loss to customers when product is
shipped from the fulfillment facility. Sales revenue and estimated returns are recorded when
product is shipped. The Company&#146;s direct customer return policy is to provide a 30-day money back
guarantee on orders placed by customers. After 30&nbsp;days, the Company does not issue refunds to
direct sales customers for returned product. To date, the Company has experienced monthly returns
of approximately 1% of sales. As of June&nbsp;30, 2008 and June&nbsp;30, 2007, the
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">Company&#146;s reserve balance for returns and allowances was approximately $97,700 and $112,600, respectively.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For retail customers, the Company analyzes its contracts to determine the appropriate
accounting treatment for its recognition of revenue on a customer by customer basis. Where the
right of return exists beyond 30&nbsp;days, revenue and related cost of sales is deferred until
sufficient sell-through information is received to reasonably estimate the amount of future
returns.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the first quarter of fiscal year 2009, the Company will recognize all deferred revenue and
expenses from GNC, as the Company has determined it has sufficient history to reasonably estimate
returns and meets the retail sales recognition requirements pursuant to SAB 104. As a result,
approximately $510,000 of revenue and $72,000 of expense will be recognized during fiscal 2009.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In July&nbsp;2006, LifeVantage entered into an agreement with CVS/pharmacy (&#147;CVS&#148;) for the sale of
Protandim&#174; throughout the CVS store network. During the three months ended March&nbsp;31, 2008, the
Company agreed to accept, pursuant to a return authorization, a portion of the product from CVS
stores that had not been sold through this retail channel. During fiscal year ended June&nbsp;30, 2008,
sufficient bottles were received from CVS to offset the receivable from CVS and both parties agreed
to waive any further obligations from the other party and the supply arrangement was terminated.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below shows the effect of the change in the Company&#146;s deferred revenue and expense
by quarter through fiscal year ended June&nbsp;30, 2008 including the impact of the reversal of the CVS
deferred revenue and receivable:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Deferred</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Deferred</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Revenue</TD>
    <TD style="border-bottom: 1px solid #000000" >&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000" >&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Expense</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Deferred revenue and expense as of June&nbsp;30, 2007</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">818,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">117,807</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Additions to deferred revenue / expense for the
three months ended September&nbsp;30, 2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">120,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,770</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Recognition of revenue due to retail
sell-through in the three months ended September
30, 2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(142,770</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(23,324</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Deferred revenue and expense as of September&nbsp;30,
2007</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">796,290</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">114,253</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Additions to deferred revenue / expense for the
three months ended December&nbsp;31, 2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">154,260</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,510</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Reduction of deferred revenue from product return</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(303,300</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(45,899</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Recognition of revenue due to retail
sell-through in the three months ended December
31, 2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(139,800</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(22,839</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Deferred revenue / expenses as of December&nbsp;31,
2007</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">507,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">71,025</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Additions to deferred revenue / expense for the
three months ended March&nbsp;31, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">148,590</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,562</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->23<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Deferred</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Deferred</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Revenue</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Expense</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Recognition of revenue due to retail
sell-through in the three months ended March&nbsp;31,
2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(137,010</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(22,383</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Deferred revenue / expenses as of March&nbsp;31, 2008</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">519,030</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">73,204</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Additions to deferred revenue / expense for the
three months ended June&nbsp;30, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">112,740</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,445</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Recognition of revenue due to retail
sell-through in the three months ended June&nbsp;30,
2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(121,005</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(19,600</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Deferred revenue / expenses as of June&nbsp;30, 2008</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">510,765</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">72,049</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Intangible
Assets - Patent Costs</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We review the carrying value of our patent costs periodically to determine whether the patents
have continuing value.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>Stock-Based Compensation</I>

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We use the fair value approach to account for stock-based compensation in accordance with the
modified version of prospective application as prescribed by SFAS 123(R).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>Research and Development Costs</I>

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have expensed all of our payments related to research and development activities.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>Derivative Instruments</I>

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the sale of debt or equity instruments, we may sell options or warrants to
purchase our common stock. In certain circumstances, these options or warrants may be classified as
derivative liabilities, rather than as equity. Additionally, the debt or equity instruments may
contain embedded derivative instruments, such as conversion options, which in certain circumstances
may be required to be bifurcated from the associated host instrument and accounted for separately
as a derivative instrument liability.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The identification of, and accounting for, derivative instruments is complex. For options,
warrants and any bifurcated conversion options that are accounted for as derivative instrument
liabilities, we determine the fair value of these instruments using the Black-Scholes option
pricing model. That model requires assumptions related to the remaining term of the instruments and
risk-free rates of return, our current common stock price and expected dividend yield, and the
expected volatility of our common stock price over the life of the instruments. Because of the
limited trading history for our common stock, we have estimated the future volatility of our common
stock price based on not only the history of our stock price but also the experience of other
entities considered comparable to us. The identification of, and accounting for, derivative
instruments and the assumptions used to value them can significantly affect our financial
statements.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><B>Recently Issued Accounting Standards</B>

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In September&nbsp;2006, the FASB issued Statement of Financial Accounting Standards No.&nbsp;157, <I>Fair
Value Measurements</I>, (&#147;SFAS 157&#148;), which is effective for financial statements for fiscal years
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">beginning after November&nbsp;15, 2007. SFAS 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles (&#147;GAAP&#148;), and expands disclosures
about fair value measurements. This Statement applies under other accounting pronouncements that
require or permit fair value measurements, the FASB having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement
does not require any new fair value measurements. However, for some entities, the application of
this Statement will change current practice. The Company will adopt SFAS 157 and follow its
disclosure requirements beginning in the first quarter of fiscal 2009.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December&nbsp;2007, the FASB revised Statement of Financial Accounting Standards No.&nbsp;141,
<I>Business Combinations (revised 2007), </I>(&#147;SFAS 141(R)&#148;). SFAS 141(R) replaces FASB Statement No.&nbsp;141,
<I>Business Combinations, </I>(&#147;SFAS 141&#148;)<I>. </I>This Statement retains the fundamental requirements in
Statement 141 that the acquisition method of accounting (which SFAS 141 called the <I>purchase method</I>)
be used for all business combinations and for an acquirer to be identified for each business
combination. The scope of SFAS 141(R) is broader than that of SFAS 141, which applied only to
business combinations in which control was obtained by transferring consideration. By applying the
same method of accounting&#151;the acquisition method&#151;to all transactions and other events in which
one entity obtains control over one or more other businesses, SFAS 141(R) improves the
comparability of the information about business combinations provided in financial reports. We
anticipate that SFAS 141(R) will not have a material impact on our financial statements.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December&nbsp;2007, the FASB issued Statement of Financial Accounting Standards No.&nbsp;160
<I>Noncontrolling Interest in Consolidated Financial Statements-an amendment of ARB No.&nbsp;51</I>, (&#147;SFAS
160&#148;). SFAS 160 states that accounting and reporting for minority interests will be recharacterized
as noncontrolling interests and classified as a component of equity. SFAS 160 also establishes
reporting requirements that provide disclosures that identify and distinguish between the interests
of the parent and the interests of the noncontrolling owners. SFAS 160 is effective beginning
January&nbsp;1, 2009, and early adoption is prohibited. SFAS 160 requires retroactive adoption of the
presentation and disclosure requirements for existing minority interests. We anticipate that SFAS
160 will not have a material impact on our financial statements.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In March&nbsp;2008, the FASB issued Statement of Financial Accounting Standards No.&nbsp;161, <I>Disclosures about
Derivative Instruments and Hedging Activities an amendment of FASB Statement No.&nbsp;133</I>, (&#147;SFAS 161&#148;).
SFAS 161 requires disclosures of how and why an entity uses derivative instruments, how derivative
instruments and related hedged items are accounted for and how derivative instruments and related
hedged items affect an entity&#146;s financial position, financial performance, and cash flows. SFAS 161
is effective for fiscal years beginning after November&nbsp;15, 2008, with early adoption permitted. We
anticipate that SFAS 161 will not have a material impact on our financial statements.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have reviewed all other recently issued, but not yet effective, accounting pronouncements
and do not believe any such pronouncements will have a material impact on our financial statements.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Risk Factors</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>An investment in our common stock involves a high degree of risk, and should be considered
only by persons who can afford the loss of their entire investment. You should carefully consider
each of the following risk factors and all of the other information provided in this Annual Report,
including our financial statements and the related notes, before purchasing our common stock. The
risks described below are those we currently believe may materially affect us. The future
development of LifeVantage and Protandim</I><I><SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP></I><I> is and will continue to be dependent upon a
number of factors, many of which we cannot predict or anticipate. Accordingly, the following risk
factors are not necessarily all of the important factors that could cause actual results of
operations to differ materially from those expressed in the forward-looking statements in this
Annual Report. Other unknown or unpredictable factors also could have material adverse effects on
our business, future results of operations or financial condition. We have no obligation and do
not undertake to update or revise the following risk factors to reflect events or circumstances
after the date of this Report.</I>
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><U>Risk Factors Relating to the Company, our Limited Operating History, our Management, and our
Financial Condition</U>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>We have a limited operating history and lack of sufficient revenues from operations.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We did not generate any significant revenues from the sale of Protandim<I><SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> </I>until the
last six months of fiscal 2005. For the fiscal years ended June&nbsp;30, 2007 and 2008, we generated
revenues of $5,050,988 and $3,200,174, respectively. Even though we have expended in excess of
$21,000,000 in research and development activities and overhead expenses since July&nbsp;2003, we do not
have a long operating history with revenue in excess of these costs to date. We commenced sales of
our primary product, Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, in February&nbsp;2005. For our fiscal year ended June&nbsp;30,
2007, we incurred a net loss of $3,693,578 and for fiscal year ended June&nbsp;30, 2008, we incurred a
net loss of $2,054,439. If cash generated from operations is insufficient to satisfy our liquidity
requirements, we may need to raise additional financing. Additional financing may be dilutive to
our existing shareholders. If we are unable to obtain sufficient financing, or increase our
revenues, we will be required to reduce the scope of our planned operations, which could harm our
business, financial condition and operating results.
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>There is no assurance that we will be successful in expanding our operations and, if successful,
managing our future growth.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we are unable to generate revenues that are sufficient to cover our costs, our results of
operations will be materially and adversely affected, and we will be unable to expand our
operations and may be required to further reduce the scope of our planned operations. If we are
able to expand our operations in the future, we may experience periods of rapid growth, including
increased staffing levels. Any such growth will place a substantial strain on our management,
operational, financial and other resources, and we will need to train, motivate, and manage
employees, as well as attract sales, technical, and other professionals. Any failure to expand
these areas and implement appropriate procedures and controls in an efficient manner and at a pace
consistent with our business objectives would have a material adverse effect on our business,
financial condition, and results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Government regulators and regulations could adversely affect our business.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The formulation, manufacturing, packaging, labeling, advertising, distribution, and sale of
our product, as well as other dietary supplements, are subject to regulation by a number of
federal, state, and local agencies, including but not limited to the Food and Drug Administration
(&#147;FDA&#148;) and the Federal Trade Commission (&#147;FTC&#148;).
See &#147;Business &#150; Government Approval and
Regulations.&#148; These agencies have a variety of procedures and enforcement remedies available to
them, including but not limited to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Initiating investigations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Issuing warning letters and cease and desist orders;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Demanding recalls;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Initiating adverse publicity;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Requiring corrective labeling or advertising;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Requiring consumer redress and/or disgorgement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Seeking injunctive relief or product seizures;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Initiating judicial actions; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Imposing civil penalties or commencing criminal prosecution.</TD>
</TR>

</TABLE>
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">Federal and state agencies have in the past used these types of remedies in regulating participants
in the dietary supplement industry, including the imposition by federal agencies of monetary
redress in the millions of dollars. Adverse publicity related to dietary supplements may result in
increased regulatory scrutiny, undermine or eliminate the acceptance of our product by consumers
and lead to the initiation of private lawsuits. Product recalls could result in unexpected expense
of the recall and any legal proceedings that might arise in connection with the recall.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our failure to comply with applicable laws could also subject us to severe legal sanctions
that could have a material adverse effect on our business and results of operations. Specific
action taken against us could result in a material adverse effect on our business and results of
operations. Furthermore, a state could interpret product claims that are presumptively valid under
federal law are nonetheless illegal under that state&#146;s regulations.
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>Future laws or regulations may hinder or prohibit the production or sale of our existing product
and any future products.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may be subject to additional laws or regulations in the future, such as those administered
by the FDA, FTC, or other federal, state, or local regulatory authorities. See Government Approval
and Regulations. Laws or regulations that we consider favorable may be modified or repealed.
Current laws or regulations may be amended or interpreted more stringently. The FDA has proposed
extensive good manufacturing practice regulations for dietary supplements. We are unable to
predict the nature of such future laws, regulations, or interpretations, nor can we predict what
effect they may have on our business. Possible effects or requirements could include, but are not
limited to, the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The reformulation of products to meet new standards;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Additional ingredient restrictions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Additional claim restrictions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The recall or discontinuance of products unable to be reformulated;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Imposition of additional good manufacturing practices and/or record keeping
requirements;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Expanded documentation of the properties of products; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Expanded or different labeling or scientific substantiation.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">Any such requirements could have material adverse effects on our business, financial condition, or
results of operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Unfavorable publicity could materially hurt our business and the value of your investment.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are highly dependent upon consumers&#146; perceptions of the safety, quality, and efficacy of
our products, as well as products distributed by other companies. Future scientific research or
publicity may not be favorable to our industry or any particular product, or consistent with
earlier research or publicity. Future reports or research that are perceived less favorably or
that question such earlier research could have a material adverse effect on us. Because of our
dependence upon consumer perceptions, adverse publicity associated with illness or other adverse
effects resulting from the consumption of our product or any similar products distributed by other
companies could have a material adverse impact on us. Such adverse publicity could arise even if
the adverse effects
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">associated with such products resulted from failure to consume such products as directed. We
may be unable to counter the effects of negative publicity concerning the efficacy of our product.
Adverse publicity could also increase our product liability exposure.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>We are and will continue to be subject to the risk of investigatory and enforcement action by the
FTC, which could have a negative impact upon the price of our stock.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will always be subject to the risk of investigatory and enforcement action by the FTC based
on our advertising claims and marketing practices. The FTC routinely reviews product advertising,
including websites, to identify significant questionable advertising claims and practices. The FTC
has brought many actions against dietary supplement companies based upon allegations that
applicable advertising claims or practices were deceptive and/or not substantiated. If the FTC
initiates an investigation, the FTC can initiate pre-complaint discovery that may be nonpublic in
nature. Such an investigation: (i)&nbsp;may be very expensive to defend, (ii)&nbsp;may be lengthy, and (iii)
may result in an adverse ruling by a court, administrative law judge, or in a publicly disclosed
consent decree.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>The dietary supplement market is highly competitive.</I>

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The market for the sale of dietary supplements is highly competitive. Our competitors could
have greater financial and other resources available to them and possess better manufacturing,
distribution and marketing capabilities. As the dietary supplement industry grows and changes,
retailers may align themselves with larger suppliers who may be more financially stable, market a
broad portfolio of products or offer better customer service. Increased competition or increased
pricing pressure could have a material adverse effect on our results of operations and financial
condition. Among other factors, competition among manufacturers, distributors, and retailers of
dietary supplements is based upon price. Because of the high degree of price competition, we may
not be able to pass on increases in raw material prices to our customers. If a competitor reduces
their price in order to gain market share or if raw material prices increase and we are unable to
pass along the cost to our customers, our results of operations and financial condition could be
materially adversely affected.
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>Our business is susceptible to product liability claims, which could adversely affect our results
of operations and financial condition.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The manufacture and sale of any product for human consumption raises the risk of product
liability claims if a customer alleges an adverse reaction after using the product. These claims
may derive from the product itself or a contaminant found in the product from the manufacturing,
packaging, sales process or even due to tampering by unauthorized third parties. Even with the
product liability/completed operations insurance we have obtained, there will be a risk that
insurance will not cover our potential exposure completely or would fail to cover a particular
claim, in which case we may not have the financial resources to satisfy such claims. In addition,
certain damages in litigation, such as punitive damages, are not covered by our insurance policy.
The payment of claims would require us to use funds that are otherwise needed to conduct our
business and make our products. In the event that we do not have adequate insurance or other
indemnification coverage, product liability claims and litigation could have a material adverse
effect on our results of operation and financial condition.
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>Consumers of our products may not feel readily noticeable physiological differences after taking
Protandim</I><I><SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP></I><I>.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Apart from the changes to oxidative stress levels that may be occurring at the cellular level,
consumers of our product may not feel readily noticeable physiological differences after taking
Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>. One of our marketing challenges is educating consumers about
Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>&#146;s benefits
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">and encouraging continued use of the product despite the lack of readily noticeable
physiological differences. Consequently, consumers may not continue to purchase our product, which
would have a material adverse affect on our business, financial condition, and results of
operation.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>We have no manufacturing capabilities and we are dependent upon a third party to manufacture our
product.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are dependent upon our relationship with an independent manufacturer to fulfill our product
needs. We currently only use one manufacturer for our product. Accordingly, we are dependent on
the uninterrupted and efficient operation of this manufacturer&#146;s facility. Our ability to market
and sell our product requires that our product be manufactured in commercial quantities, without
significant delay and in compliance with applicable federal and state regulatory requirements. In
addition, we must be able to have our product manufactured at a cost that permits us to charge a
price acceptable to the customer while also accommodating any distribution costs or third-party
sales compensation. If our current manufacturer is unable for any reason to fulfill our
requirements, or seeks to impose unfavorable terms, we will have to seek out other contract
manufacturers which could disrupt our operations and have a material adverse effect on our results
of operation and financial condition. Competitors who perform their own manufacturing may have an
advantage over us with respect to pricing, availability of product, and in other areas through
their control of the manufacturing process.
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>Raw material for our product may be difficult to obtain or expensive.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our third party manufacturer acquires the raw materials necessary for the manufacture of
Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>. We cannot assure you that suppliers will provide the raw materials our
manufacturer needs in the quantities requested, at a price we are willing to pay, or that meet our
quality standards. The failure to supply raw materials or changes in the material terms of raw
material supply arrangements could have a material adverse effect on our results of operations and
financial condition. We are also subject to potential delays in the delivery of raw materials
caused by events beyond our control, including labor disputes, transportation interruptions,
weather-related events, natural disasters or other catastrophic events, and changes in government
regulations. Any significant delay in or disruption of the supply of raw materials could, among
other things, substantially increase the cost of such materials, require reformulation or
repackaging of products, require the qualification of new suppliers, or result in our inability to
meet customer demands. Raw materials account for a significant portion of our manufacturing costs.
Significant increases in raw material prices could have a material adverse effect on our results
of operations and financial condition.
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>We depend on a limited number of significant customers and the loss of any of them could negatively
affect our business.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our largest customer is GNC, which accounts for over 17% of our revenue, and the loss of GNC
as a customer, or a significant reduction in purchase volume by GNC, would have a material adverse
effect on our financial condition. The loss of GNC could adversely affect our financial condition.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, pursuant to our agreement with GNC, sales are made on a &#147;sale or return&#148; basis
whereby product can be returned by GNC customers for a full refund. We have sufficient history
with GNC to reasonably estimate the rate of product returns and we recognize revenue associated
with sales to GNC when product is sold by GNC to the consumer with an allowance for future product
returns based on historical product return information. However, GNC&#146;s return policy could permit
consumers to return a greater percentage of our product than historically experienced which could
negatively impact our revenues and results of operation.
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Product returns may adversely affect our business.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Product returns are part of our business. In addition to the &#147;sale or return&#148; policy
applicable to sales through GNC described above and certain other retailers, we offer a 30-day,
money back unconditional guarantee to all customers.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We record allowances for product returns at the time we ship the product. We base these
accruals on the historical return rate since the inception of our selling activities, and the
specific historical return patterns of the product. Our return rate since the inception of selling
activities is approximately 1% of sales. We replace returned product damaged during shipment
wholly at our cost, which historically has been negligible. We cannot guarantee, however, that
future return rates or costs associated with returns do not increase.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To date, product expiration dates have not played any role in product returns; however, it is
possible they will increase in the future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>We primarily depend on a single product for our revenue.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> is the primary product we sell and, as such, we cannot rely on a broad
portfolio of other products to support our operations in the event we experience any difficulty
with the manufacture, marketing, sale, or distribution of Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>. We cannot assure
you that Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> will maintain or increase its popularity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Worsening economic conditions may adversely affect our business.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The demand for dietary supplements tends to be sensitive to consumers&#146; disposable income.
Therefore, a decline in general economic conditions may lead to our consumers having less
discretionary income with which to purchase such products. This could cause a reduction in our
projected revenues and have a material adverse effect on operating results.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>We may face limited availability of additional capital.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Should we need to borrow money from financial institutions or other third parties, or raise
additional capital in the future, the cost of capital may be high. Traditional debt financing may
be unavailable and we may have to seek alternative sources of financing, including the issuance of
new shares of stock or preferential stock that could dilute current shareholders. There can be no
guarantee that we could successfully complete such a stock issuance or otherwise raise additional
capital.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>We are subject to the lack of liquidity of our marketable securities investment portfolio.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We maintain an investment portfolio of marketable securities that is managed by a professional
financial institution. The portfolio includes auction rate preferred securities (&#147;ARPS&#148;) of AA and
AAA rated closed-end funds. These marketable securities which historically have been extremely
liquid have been adversely affected by the broader national liquidity crisis. Due to the economic
downturn as a result of <I>&#147;sub-prime mortgage&#148; </I>problems and overall lack of liquidity in the markets,
our investment portfolio could become impaired. Additionally, our cash flows could be negatively
impacted by the inability to liquidate or fully utilize the portfolio as collateral for borrowing.
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>We may be impacted by the affects of a slow-down of the United States economic environment and
potential for recession.</I>
</DIV>


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<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The majority of our customer base is comprised of individuals dispersed throughout the United
States that will be directly and negatively impacted by increased mortgage payments, foreclosures
and other factors arising out of a recessionary economy, and the results of the sub-prime mortgage
crisis, that restrict disposable income that is expended on our products. Should current
expectations of a looming recession become fiscal fact, we could be materially and adversely
affected by reductions in revenue, and the corresponding negative impact on results of operations
and financial condition.
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>The requirements of the Sarbanes-Oxley act, including section 404, are burdensome, and our failure
to comply with them could have a material adverse affect on our business and stock price.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective internal control over financial reporting is necessary in order to provide reliable
financial reports and effectively prevent fraud. Section&nbsp;404 of the Sarbanes-Oxley Act of 2002
requires us to evaluate and report on our internal control over financial reporting beginning with
our Annual Report on Form 10-KSB for the fiscal year ended June&nbsp;30, 2008. Our independent
registered public accounting firm will need to annually attest to our evaluation, and issue their
own opinion on our internal control over financial reporting beginning with our Annual Report on
Form 10-K for the fiscal year ending June&nbsp;30, 2010. The process of complying with Section&nbsp;404 is
expensive and time consuming, and requires significant management attention. We cannot be certain
that the measures we will undertake will ensure that we will maintain adequate controls over our
financial processes and reporting in the future. Furthermore, if we rapidly grow our business, the
internal controls over financial reporting that we will need will become more complex, and
significantly more resources will be required to ensure that our internal controls over financial
reporting remain effective. Failure to implement required controls, or difficulties encountered in
their implementation, could harm our operating results or cause us to fail to meet our reporting
obligations. If we, or our auditors, discover a material weakness in our internal control over
financial reporting, the disclosure of that fact, even if the weakness is quickly remedied, could
diminish investors&#146; confidence in our financial statements and harm our stock price. In addition,
non-compliance with Section&nbsp;404 could subject us to a variety of administrative sanctions,
including the suspension of trading, ineligibility for listing on one of the NASDAQ Stock Markets
or national securities exchanges, and the inability of registered broker-dealers to make a market
in our common stock, which would further reduce our stock price.
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>We could be exposed to certain environmental liabilities due to our past operations and property
ownership.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Between 1993 and 1999, we owned mining properties in the Yaak River mining district of
Montana. The Company maintained these mining properties pursuant to Montana law, but never
conducted any mining operations or ore processing. Prior to completing the acquisition of Lifeline
Nutraceuticals Corporation, our management and consultants reviewed the records of this prior
ownership and certain publicly available records relating to the properties. The State of Montana
Department of Environmental Quality (&#147;DEQ&#148;) believed that the properties may contain residues from
past mining. Since we have not performed on-site environmental studies to evaluate the
environmental circumstances of these properties, there is a risk that there may be material
environmental liabilities associated with our former property interests in Montana for which we may
be liable, however we cannot provide a reasonable estimate of such risk.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, until November&nbsp;10, 2004, we owned 91 lots in Lawrence, Colorado. We are not
aware of any environmental liabilities with respect to these lots as the party acquiring the
property assumed any environmental liability to which the property might be subject. Nonetheless,
there is a risk that a governmental agency or a private individual may assert liability against us
for violation of environmental laws related to the ownership of this property.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Risks Related to Our Intellectual Property and Obsolescence</U>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>Our intellectual property rights are valuable, and any inability to protect them could reduce the
value of our products and brand.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have attempted to protect our intellectual property rights in Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> through
a combination of confidentiality agreements, patent applications, and other contractual provisions.
The original inventors of Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, William Driscoll and Paul Myhill, assigned all
patent filings to LNC, our wholly owned subsidiary, and the assignment has been filed with the
United States Patent and Trademark Office (&#147;USPTO&#148;). Our intellectual property is covered by two
U.S. Patents granted on July&nbsp;10, 2007 and June&nbsp;10, 2008 and a U.S. utility patent application on
file with the USPTO. A PCT International Patent Application is also on file. These patent
applications claim the benefit of priority of seven U.S. provisional patent applications. There is
no guarantee that these patent applications will be approved or that patents will be issued, or if
they are, that the patents will contain all of the original claims. The loss of our intellectual
property rights in our Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> product could permit our competitors to manufacture
their own version of our product which could have a materially adverse effect on our revenues.
Even if our existing patent applications are approved and patents are issued, patents only provide
limited protection against infringement claims, and patent infringement suits are complex,
expensive, and not always successful.
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>If we do not continue to innovate and provide products that are useful to consumers, we may not
remain competitive, and our revenues and operating results could suffer.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Scientists, research institutions, and commercial institutions are making advances and
improvements in nutritional supplements and issues relating to oxidative stress and aging very
quickly, both domestically and internationally. It is possible that future developments may occur,
and these developments may render Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> non-competitive. We believe that our
future success will depend in large part upon our ability to develop, commercialize, and market
products that address issues relating to aging and oxidative stress, and to anticipate successfully
or to respond to technological changes in manufacturing processes on a cost-effective and timely
basis. The development and commercialization process, particularly relating to innovative
products, is both time-consuming and costly and involves a high degree of business risk. The
success of new products or product enhancements is subject to a number of variables, including
developing products that will appeal to customers, accurately anticipating consumer needs, pricing
a product competitively and complying with laws and regulations. The failure to successfully
develop or launch or gain distribution for new product offerings or product enhancements could have
a material adverse effect on our results of operations and financial condition.
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>If we are unable to protect our proprietary information against unauthorized use by others, our
competitive position could be harmed.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our proprietary information is critically important to our competitive position and is a
significant aspect of our product. We generally enter into confidentiality or non-compete
agreements with our employees and consultants, and control access to, and distribution of, our
documentation and other proprietary information. Despite these precautions, these strategies may
not be adequate to prevent misappropriation of our proprietary information. Therefore, we could be
required to expend significant amounts to defend our rights to proprietary information in the
future if a breach were to occur.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Other parties might claim that we infringe on their intellectual property rights.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although the dietary supplement industry has historically been characterized by products with
naturally occurring ingredients in capsule or tablet form, recently it is becoming more common for
suppliers and competitors to apply for patents or develop proprietary technologies and processes.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">We cannot assure you that third parties will not assert intellectual property infringement claims
against us despite our efforts to avoid such infringement. To the extent that these developments
prevent us from offering competitive products in the marketplace, or result in litigation or
threatened litigation against us related to alleged or actual infringement of third-party rights,
these developments could have a material adverse effect on our results of operations and financial
condition.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Risk Factors Relating to our Common Stock</U>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>Our management and large shareholders exercise significant control over our Company and may approve
or take actions that may be adverse to your interests.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of June&nbsp;30, 2008, our named executive officers, directors, and 5% stockholders beneficially
owned approximately 27% of our voting power. For the foreseeable future, to the extent such
shareholders vote all their shares in the same manner, they will be able to exercise control over
many matters requiring approval by the board of directors or our shareholders. As a result, they
will be able to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Control the composition of our board of directors;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Control our management and policies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Determine the outcome of significant corporate transactions, including changes
in control that may be beneficial to shareholders; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Act in each of their own interests, which may conflict with, or be different
from, the interests of each other or the interests of the other shareholders.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>Our common stock could be classified as penny stock and is extremely illiquid, so investors may not
be able to sell as much stock as they want at prevailing market prices.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our common stock is subject to additional disclosure requirements for penny stocks mandated by
the Penny Stock Reform Act of 1990. The SEC Regulations generally define a penny stock to be an
equity security that is not traded on the Nasdaq Stock Market and has a market price of less than
$5.00 per share. Depending upon our stock price, we may be included within the SEC Rule&nbsp;3a-51
definition of a penny stock, with trading of our common stock covered by Rule&nbsp;15g-9 promulgated
under the Exchange Act. Under this rule, broker-dealers who sell or effect the purchase of penny
stock to persons other than established customers or in certain exempted transactions, must make a
special written disclosure to, and suitability determination for, the purchaser and receive the
purchaser&#146;s written agreement to a transaction prior to sale. The regulations on penny stocks
limit the ability of broker-dealers to sell our common stock and thus may limit the ability of
purchasers of our common stock to sell their securities in the secondary market. Our common stock
will also be considered penny stock if our net tangible assets do not exceed $5,000,000 or our
average revenue is not at least $6,000,000 in a prior three year period.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The average daily trading volume of our common stock on the over-the-counter market was
approximately 45,600 shares per day over the fiscal year ended June&nbsp;30, 2008. If limited trading
in our stock continues, it may be difficult for investors to sell their shares in the public market
at any given time at prevailing prices.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Our stock price may experience future volatility.</I>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The trading price of our common stock has historically been subject to wide fluctuations. The
price of our common stock may fluctuate in the future in response to quarter-to-quarter variations
in operating results, material announcements by us or competitors, governmental regulatory action,
conditions in the dietary supplement industry, or other events or factors, many of which are beyond
our control. In addition, the stock market has historically experienced significant price and
volume fluctuations which have particularly affected the market prices of many dietary supplement
companies and which have, in certain cases, not had a strong correlation to the operating
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->33<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">performance of such companies. In addition, our operating results in future quarters may be below
the expectations of securities analysts and investors. In such events, the price of our common
stock would likely decline.
</DIV>
<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 7 &#150; FINANCIAL STATEMENTS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information required by this item begins on page F-1 following Part&nbsp;III of this Report on
Form&nbsp;10-KSB and is incorporated into this Item&nbsp;7 by reference.
</DIV>
<DIV align="left">
<A name="110"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 8 &#150; CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company dismissed Gordon, Hughes &#038; Banks, LLP as the Company&#146;s independent registered
public accounting firm effective as of January&nbsp;30, 2008. The Company appointed Ehrhardt Keefe
Steiner &#038; Hottman PC on January&nbsp;30, 2008 as its independent registered public accounting firm for
the fiscal year ended June&nbsp;30, 2008, beginning for the three months ended December&nbsp;31, 2007. The
decision to change accountants was recommended and approved by the Company&#146;s Board of Directors and
its Audit Committee on January&nbsp;30, 2008. There was no disagreement or event in connection with the Company&#146;s
change in accountants.
</DIV>
<DIV align="left">
<A name="111"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 8A(T) &#150; CONTROLS AND PROCEDURES</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><B>Evaluation of Disclosure Controls and Procedures</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The SEC defines the term <I>&#147;disclosure controls and procedures&#148; </I>to mean a company&#146;s controls and
other procedures that are designed to ensure that information required to be disclosed in the
reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported, within the time periods specified in the Commission&#146;s rules and forms.
The Company&#146;s management maintains disclosure controls and procedures that are designed to ensure
that information required to be disclosed in the Company&#146;s reports is recorded, processed,
summarized, and reported within the time periods specified in the Securities and Exchange
Commission&#146;s rules and forms, and that such information is accumulated and evaluated by the
Company&#146;s management to allow management to make timely decisions regarding required disclosure.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">Members of the Company&#146;s management, including our Chief Executive Officer, David Brown, and Chief
Financial Officer, Bradford Amman, have evaluated the effectiveness of our disclosure controls and
procedures, as defined by Exchange Act Rules&nbsp;13a-15(e) or 15d-15(e), as of June&nbsp;30, 2008, the end
of the period covered by this report. Based upon that evaluation, Messrs.&nbsp;Brown and Amman concluded
that our disclosure controls and procedures were effective as of June&nbsp;30, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Internal Control over Financial Reporting</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><U>Management&#146;s Report on Internal Control over Financial Reporting</U>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our management is responsible for establishing and maintaining effective internal control over
financial reporting (as defined in Rule&nbsp;13a-15(f)&nbsp;or Rule&nbsp;15d-(f) under the Securities Exchange Act
of 1934). Because of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our management assessed the effectiveness of our internal control over financial reporting as
of the end of the period covered by this report. Management utilized guidance provided by the
Committee of Sponsoring Organizations (&#147;COSO&#148;) in evaluating, testing and assessing its internal
controls. COSO is a voluntary private-sector organization dedicated to guiding executive
management and governance entities toward the establishment of more effective, efficient, and
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->34<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">ethical business operations on a global basis. It sponsors and disseminates frameworks and
guidance based on in-depth research, analysis, and best practices. Based on its assessment, our
management determined that, as of the end of the period covered by this report, we maintained
effective internal control over financial reporting.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This report does not include an attestation report of the Company&#146;s registered public
accounting firm regarding internal control over financial reporting. Management&#146;s report was not
subject to attestation by the Company&#146;s registered public accounting firm pursuant to temporary
rules of the Securities and Exchange Commission that permit the Company to provide only
management&#146;s report in this report.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Changes in Internal Control over Financial Reporting</U>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There have been no changes in our internal control over financial reporting that occurred
during our fiscal year ended June&nbsp;30, 2008 that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting.
</DIV>
<DIV align="left">
<A name="112"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 8B &#150; OTHER INFORMATION</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.
</DIV>
<DIV align="left">
<A name="113"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>PART III</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information required by Part&nbsp;III is incorporated by reference to the information to be set
forth in the sections identified below in our definitive Proxy Statement for the 2008 Annual
Meeting of Shareholders (the &#147;Proxy Statement&#148;). The Proxy Statement is to be filed with the SEC
pursuant to Regulation&nbsp;14A of the Exchange Act, no later than 120&nbsp;days after the end of the fiscal
year covered by this annual report.
</DIV>
<DIV align="left">
<A name="114"></A>
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><B>ITEM 9 &#150; DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
16(a) OF THE EXCHANGE ACT</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Incorporated herein by reference to the information to be set forth in the Proxy Statement.
</DIV>
<DIV align="left">
<A name="115"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 10 &#150; EXECUTIVE COMPENSATION</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Incorporated herein by reference to the information to be set forth in the Proxy Statement.
</DIV>
<DIV align="left">
<A name="116"></A>
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><B>ITEM 11 &#150; SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS.</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Incorporated herein by reference to the information to be set forth in the Proxy Statement.
</DIV>
<DIV align="left">
<A name="117"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 12 &#150; CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Incorporated herein by reference to the information to be set forth in the Proxy Statement.
</DIV>
<DIV align="left">
<A name="118"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 13 &#150; EXHIBITS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See the Exhibit&nbsp;Index following the signature page of this annual report.
</DIV>
<DIV align="left">
<A name="119"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ITEM 14 &#150; PRINCIPAL ACCOUNTANT FEES AND SERVICES</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Incorporated herein by reference to the information to be set forth in the Proxy Statement.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->35<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="120"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>SIGNATURES</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">In accordance with Section&nbsp;13 or 15(d) of the Exchange Act, the registrant caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">LifeVantage Corporation.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">a Colorado corporation</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ David W. Brown
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;David W. Brown
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Its:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">September&nbsp;23, 2008</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes
and appoints David W. Brown, as his or her true and lawful attorney-in-fact, with full power of
substitution, for him in any and all capacities, to sign any amendments to this report on
Form&nbsp;10-KSB and to file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that
 said attorney-in-fact or his substitute may do or cause to be done by
virtue hereof. In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="32%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Date</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Title</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ David W. Brown
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
David W. Brown
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;23, 2008
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Chief Executive Officer; Director<BR>
(Principal Executive Officer)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Bradford K. Amman
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Bradford K. Amman
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;23, 2008
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Chief Financial Officer,
Secretary and Treasurer<BR>
(Principal Financial
Officer)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ James D. Crapo
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
James D. Crapo
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;23, 2008
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Chairman of the Board and
Director</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Jack R. Thompson
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Jack R. Thompson
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;23, 2008
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director and Chairman of the
Audit Committee</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Joe M. McCord
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Joe M. McCord
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;23, 2008
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Richard D. Jones
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Richard D. Jones
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;23, 2008
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Garry Mauro
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Garry Mauro
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">September&nbsp;23, 2008
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->36<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="121"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXHIBIT INDEX</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="93%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Title</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<Tr valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agreement and Plan of Reorganization between Lifeline Nutraceuticals
Corporation and Yaak River Resources, Inc. dated September&nbsp;21,
2004<SUP style="font-size: 85%; vertical-align: text-top"> (1)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Settlement and Release Agreement and Plan of Reorganization dated
March&nbsp;10, 2005, among Lifeline Therapeutics, Inc., Lifeline
Nutraceuticals Corporation and Michael Barber <SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Articles of Incorporation of the Registrant, as amended<SUP style="font-size: 85%; vertical-align: text-top"> (9)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Bylaws of the Registrant<SUP style="font-size: 85%; vertical-align: text-top"> (9)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.01
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Warrant<SUP style="font-size: 85%; vertical-align: text-top"> (12)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.02
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Convertible Debenture<SUP style="font-size: 85%; vertical-align: text-top"> (12)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Unit Warrant Certificate <SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Bridge Warrant Certificate <SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Placement Agent Warrant Certificate <SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Secured Indemnification Agreement dated February&nbsp;21, 2005 between
Lifeline Therapeutics, Inc. and William J. Driscoll and Rosemary
Driscoll <SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Interim Executive Services Agreement between Lifeline Therapeutics,
Inc. and Tatum CFO Partners, LLP dated August&nbsp;1, 2005 <SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agreement between Lifeline Therapeutics, Inc. and William Driscoll
dated July&nbsp;1, 2005 <SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Placement Agent Warrant Certificate <SUP style="font-size: 85%; vertical-align: text-top">(5) </SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Selling Agreement dated January&nbsp;14, 2005 between Lifeline
Therapeutics, Inc. and Keating Securities, LLC <SUP style="font-size: 85%; vertical-align: text-top">(5)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Memorandum Agreement dated November&nbsp;16, 2004 between Lifeline
Nutraceuticals Corporation and The Scott Group <SUP style="font-size: 85%; vertical-align: text-top">(5)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lifevantage Corporation 2007 Long-Term Incentive Plan <SUP style="font-size: 85%; vertical-align: text-top">(11)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.11
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Independent Contractor&#146;s Agreement dated September&nbsp;1, 2005 between
Lifeline Therapeutics, Inc. and Robert Sgarlata Associates, Inc.
<SUP style="font-size: 85%; vertical-align: text-top">(6) </SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.12
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Statement regarding Javier Baz Employment Agreement <SUP style="font-size: 85%; vertical-align: text-top">(6)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.13
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement dated November&nbsp;28, 2005 by and between Lifeline
Therapeutics, Inc. and Stephen K. Onody <SUP style="font-size: 85%; vertical-align: text-top">(7)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.14
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement dated January&nbsp;4, 2006 by and between Lifeline
Therapeutics, Inc. and Gerald J. Houston <SUP style="font-size: 85%; vertical-align: text-top">(8)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.15
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Voting Agreement and Irrevocable Proxy dated July&nbsp;1, 2005 between
Lifeline Therapeutics, Inc. and William Driscoll <SUP style="font-size: 85%; vertical-align: text-top">(9)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.16
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Voting Agreement and Irrevocable Proxy dated February&nbsp;9, 2006 among
Lifeline Therapeutics, Inc. Paul Myhill and Lisa Gail Myhill
<SUP style="font-size: 85%; vertical-align: text-top">(9)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.17
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Manufacturing Agreement dated February&nbsp;26, 2004 and amended on
February&nbsp;26, 2004 between Lifeline Therapeutics, Inc. and The Chemins
Company <SUP style="font-size: 85%; vertical-align: text-top">(9)</SUP></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.18
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Lease dated as of August, 2005 between Property Colorado OBJLW One
Corporation and Lifeline Therapeutics, Inc.<SUP style="font-size: 85%; vertical-align: text-top"> (9)</SUP></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->37<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>




<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="93%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Title</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.19
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><div align="justify">Lease dated July&nbsp;1, 2008 between Bernardo Regency, L.L.C. and
LifeVantage Corporation *</div></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.20
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><div align="justify">Confidential Termination Agreement and General Release of Claims
dated February&nbsp;14, 2007 between Gerald J. Houston and the Company
<SUP style="font-size: 85%; vertical-align: text-top">(10)</SUP></div></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.21
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><div align="justify">Letter Agreement dated June&nbsp;1, 2007 between Aspenwood Capital and
Lifevantage Corporation <SUP style="font-size: 85%; vertical-align: text-top">(12)</SUP></div></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.22
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><div align="justify">Letter Agreement dated September&nbsp;28, 2007 between Bolder Venture
Partners and Lifevantage Corporation <SUP style="font-size: 85%; vertical-align: text-top">(12)</SUP></div></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.23
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><div align="justify">Purchase Agreement between General Nutrition Distribution, LP and
Lifevantage Corporation, dated June&nbsp;21, 2006 <SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></div></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">21.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">List of subsidiaries <SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></TD>
</TR>

<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Ehrhardt Keefe Steiner &#038; Hottman PC *</TD>
</TR>

<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><div align="justify">Certification of Chief Executive Officer pursuant to Section&nbsp;302 of
the Sarbanes-Oxley Act of 2002 *</div></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><div align="justify">Certification of Chief Financial Officer pursuant to Section&nbsp;302 of
the Sarbanes-Oxley Act of 2002 *</div></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><div align="justify">Certification of Chief Executive Officer pursuant to Section&nbsp;906 of
the Sarbanes-Oxley Act of 2002 *</div></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><div align="justify">Certification of Chief Financial Officer pursuant to Section&nbsp;906 of
the Sarbanes-Oxley Act of 2002 *</div></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD><div align="justify">Filed as an exhibit to Yaak River Resources, Inc.&#146;s Current Report of Form 8-K (File
No.&nbsp;000-30489), filed on September&nbsp;28, 2004, and incorporated herein by reference.</div></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD><div align="justify">Filed as an exhibit to LifeVantage Corporation&#146;s Current
Report of Form 8-K (File No.&nbsp;000-30489), filed on March&nbsp;14, 2005, and incorporated herein by reference.</div></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD><div align="justify">Filed as an exhibit to LifeVantage Corporation&#146;s Registration Statement on Form SB-2
(File No.&nbsp;333-126288), filed on June&nbsp;30, 2005, and incorporated herein by reference.</div></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD><div align="justify">Filed as an exhibit to LifeVantage Corporation&#146;s Annual Report on Form 10-KSB (File No.
000-30489), filed on October&nbsp;13, 2005, and incorporated herein by reference.</div></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD><div align="justify">Filed as an exhibit to LifeVantage Corporation&#146;s Registration Statement on Form SB-2/A
(File No.&nbsp;333-126288), filed on February&nbsp;6, 2006, and incorporated herein by reference.</div></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(6)</TD>
    <TD>&nbsp;</TD>
    <TD><div align="justify">Filed as an exhibit to LifeVantage Corporation&#146;s Registration Statement on Form SB-2/A
(File No.&nbsp;333-126288), filed on May&nbsp;26, 2006, and incorporated herein by reference.</div></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(7)</TD>
    <TD>&nbsp;</TD>
    <TD><div align="justify">Filed as an exhibit to LifeVantage Corporation&#146;s Current Report on Form 8-K (File No.
000-30489), filed on November&nbsp;29, 2005, and incorporated herein by reference.</div></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(8)</TD>
    <TD>&nbsp;</TD>
    <TD><div align="justify">Filed as an exhibit to LifeVantage Corporation&#146;s Current Report on Form 8-K (File No.
000-30489), filed on January&nbsp;4, 2006, and incorporated herein by reference.</div></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(9)</TD>
    <TD>&nbsp;</TD>
    <TD><div align="justify">Filed as an exhibit to LifeVantage Corporation&#146;s Annual Report on Form 10-KSB (file No.
000-30489), filed on September&nbsp;28, 2006, and incorporated herein by reference.</div></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(10)</TD>
    <TD>&nbsp;</TD>
    <TD><div align="justify">Filed as an exhibit to Lifevantage Corporation&#146;s Quarterly Report on Form 10-QSB (file
No.&nbsp;000-30489), filed on May&nbsp;14, 2007, and incorporated herein by reference.</div></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(11)</TD>
    <TD>&nbsp;</TD>
    <TD><div align="justify">Filed with the LifeVantage Proxy on Form 14-A (File No.&nbsp;000-30489) dated October&nbsp;20, 2006,
and incorporated herein by reference.</div></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(12)</TD>
    <TD>&nbsp;</TD>
    <TD><div align="justify">Filed as an exhibit to Lifevantage Corporation&#146;s Registration Statement on Form SB-2
(File No.&nbsp;333-148119), filed December&nbsp;17, 2007, and incorporated herein by reference.</div></TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Filed herewith.</TD>
</TR>

</TABLE>




<P align="center" style="font-size: 10pt"><!-- Folio -->38<!-- /Folio -->
</DIV>




<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LIFEVANTAGE CORPORATION</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Index to Consolidated Financial Statements</B>
</DIV>

<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="86%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px"><A href="#300">Report of Independent Registered Public Accounting Firms</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">F-2 &#150; F-3</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Consolidated Financial Statements:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px"><A href="#301">Consolidated Balance Sheets as of June&nbsp;30, 2008 and 2007</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">F-4</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px"><A href="#302">Consolidated Statements of Operations for the years ended
June&nbsp;30, 2008 and 2007</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">F-5</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px"><A href="#303">Consolidated Statements of Stockholders&#146; Equity and
Comprehensive Income for the years ended June&nbsp;30, 2008 and
2007</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">F-6 &#150; F-7</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px"><A href="#304">Consolidated Statements of Cash Flows for the years ended
June&nbsp;30, 2008 and 2007</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">F-8 &#150; F-9</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px"><A href="#305">Notes to Consolidated Financial Statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">F-10 &#150; F-26</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="300"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">To the Board of Directors<BR>
LifeVantage Corporation<BR>
San Diego, California

</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">We have audited the accompanying consolidated balance sheet of LifeVantage Corporation and
subsidiary as of June&nbsp;30, 2008 and the related consolidated statements of operations, stockholders&#146;
equity and comprehensive income, and cash flows for the year then ended. These financial
statements are the responsibility of the Company&#146;s management. Our responsibility is to express an
opinion on these financial statements based on our audit.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">We conducted our audit in accordance with 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 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 audit provides a reasonable basis for our opinion.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">In our opinion, the consolidated financial statements referred to above present fairly, in all
material respects, the consolidated financial position of LifeVantage Corporation and subsidiary as
of June&nbsp;30, 2008, and the results of their operations and their cash flows for the year then ended
in conformity with accounting principles generally accepted in the United States of America.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="55%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap><B>/s/ </B><B><I>Ehrhardt Keefe Steiner &#038; Hottman PC</I></B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">Denver, Colorado<BR>
September&nbsp;19, 2008
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">To the Board of Directors<BR>
Lifevantage Corporation<BR>
Greenwood Village, Colorado

</DIV>
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">We have audited the accompanying consolidated balance sheet of Lifevantage Corporation as of
June&nbsp;30, 2007 and the related consolidated statements of operations, stockholders&#146; equity and
comprehensive income, and cash flows for the year then ended. These financial statements are the
responsibility of the Company&#146;s management. Our responsibility is to express an opinion on these
financial statements based on our audit.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">We conducted our audit in accordance with 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 of the effectiveness of the Company&#146;s internal control
over financial reporting. Accordingly, we express no 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
audit provides a reasonable basis for our opinion.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">In our opinion, the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Lifevantage Corporation as of June&nbsp;30, 2007 and the
results of its operations and its cash flows for the year then ended in conformity with accounting
principles generally accepted in the United States of America.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>/</B><B><I>s</I></B><B>/ </B><B><I>Gordon, Hughes &#038; Banks, LLP</I></B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">Greenwood Village, Colorado<BR>
October&nbsp;10, 2007

</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">LIFEVANTAGE CORPORATION AND SUBSIDIARY
</DIV>

<DIV align="left">
<A name="301"></A>
</DIV>
<DIV align="center" style="font-size: 10pt">CONSOLIDATED BALANCE SHEETS</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">June 30, 2008</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">June 30, 2007</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">ASSETS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">196,883</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">160,760</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Marketable securities, available for sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,100,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Accounts receivable, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">98,008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">398,463</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Inventory</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">104,415</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27,834</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Deferred expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">72,049</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">117,807</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Deposit with manufacturer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">277,979</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">388,791</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Prepaid expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">124,049</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,175</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,973,383</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,153,830</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Property and equipment, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63,559</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">108,915</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Intangible assets, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,270,163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,311,110</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Deferred debt offering costs, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">193,484</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48,447</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">340,440</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">TOTAL ASSETS</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,549,036</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,914,295</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">LIABILITIES AND STOCKHOLDERS&#146; EQUITY</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Revolving line of credit and accrued interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">166,620</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Accounts payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">139,803</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">148,699</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Accrued expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">338,268</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">230,811</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Deferred revenue</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">510,765</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">818,250</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Capital lease obligations, current portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">846</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,301</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,156,302</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,200,061</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Capital lease obligations, net of current portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">846</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Convertible debt, net of discount</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">223,484</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,379,786</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,200,907</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Commitments and contingencies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stockholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Preferred
stock - par value $.001, 50,000,000 shares
authorized, no shares issued or outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Common
stock, - par value $.001,
250,000,000 shares authorized
and 24,766,117 and 22,268,034 issued and
outstanding as of June&nbsp;30, 2008 and
2007, respectively</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,766</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,268</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Additional paid-in capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,902,840</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,395,037</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Accumulated (deficit)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(14,758,356</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(12,703,917</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total stockholders&#146; equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,169,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,713,388</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">TOTAL LIABILITIES AND STOCKHOLDERS&#146; EQUITY</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">4,549,036</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,914,295</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">The accompanying notes are an integral part of these consolidated statements.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-4<!-- /Folio -->
</DIV>



















<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">LIFEVANTAGE CORPORATION AND SUBSIDIARY
</DIV>

<DIV align="left">
<A name="302"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">CONSOLIDATED STATEMENTS OF OPERATIONS
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="77%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000">For the years ended</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">June 30, 2008</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">June 30, 2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sales, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,200,174</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,050,988</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cost of sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">695,386</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,022,792</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,504,788</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,028,196</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating expenses:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Marketing and customer service</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,655,461</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,991,302</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">General and administrative</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,108,338</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,355,803</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Research and development</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">324,106</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">245,561</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Depreciation and amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">219,690</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">92,433</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loss on disposal of assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">105,621</TD>
    <TD nowrap>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total operating expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,307,595</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,790,720</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Operating (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,802,807</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,762,524</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other income and (expense):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,315</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">71,105</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest (expense)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(296,947</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other (expense)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,159</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total other (expense)&nbsp;income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(251,632</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">68,946</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(2,054,439</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(3,693,578</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD colspan="3" nowrap align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net (loss)&nbsp;per share, basic and diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(0.09</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(0.17</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average shares outstanding, basic and diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,710,096</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,268,034</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">The accompanying notes are an integral part of these consolidated statements.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-5<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">LIFEVANTAGE CORPORATION AND SUBSIDIARY
</DIV>

<DIV align="left">
<A name="303"></A>
</DIV>
<DIV align="center" style="font-size: 10pt">CONSOLIDATED STATEMENTS OF STOCKHOLDERS&#146; EQUITY AND COMPREHENSIVE INCOME<br>
For the years ended June&nbsp;30, 2008 and 2007</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Accumulated</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Common Stock</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Additional</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Other Comprehensive</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Accumulated</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Comprehensive</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Shares</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Amount</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Paid In Capital</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Income/(loss)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Deficit</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Income</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B>Balances, July&nbsp;1, 2006</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>22,117,992</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>22,118</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" nowrap><B>*           $14,018,487</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>$</B></TD>
    <TD align="right"><B>(55,607</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>$</B></TD>
    <TD align="right"><B>(9,010,339</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>4,974,659</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unrealized (gain)&nbsp;on
securities available for
sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55,607</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55,607</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55,607</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Options/Warrants issued for
services</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,345,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,345,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Stock issued for services</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">150,042</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31,350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-0px">Net (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,693,578</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,693,578</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,693,578</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B>Balances, June&nbsp;30, 2007</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>22,268,034</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>22,268</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>15,395,037</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>0</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>$</B></TD>
    <TD align="right"><B>(12,703,917</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>2,713,388</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>$</B></TD>
    <TD align="right"><B>(3,637,971</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Restated</TD>
</TR>

</TABLE>



<DIV align="center" style="font-size: 10pt; margin-top: 18pt">The accompanying notes are an integral part of these consolidated statements.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">LIFEVANTAGE CORPORATION AND SUBSIDIARY<BR>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS&#146; EQUITY AND COMPREHENSIVE INCOME<BR>
For the years ended June&nbsp;30, 2008 and 2007
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Common</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Stock</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Additional</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Accumulated</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Comprehensive</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Shares</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Amount</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Paid In Capital</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Deficit</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Income</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B>Balances, July&nbsp;1, 2007</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>22,268,034</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>22,268</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>15,395,037</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>$</B></TD>
    <TD align="right"><B>(12,703,917</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>2,713,388</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Options/Warrants issued for
services</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">436,104</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">436,104</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Exercise of options and
warrants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,548,083</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,548</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">452,023</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">453,571</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Stock issued for services</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">150,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,849</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-0px">Net (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,054,439</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,054,439</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,054,439</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Warrants
issued pursuant to Private Placement </DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">681,067</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">681,067</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">
Beneficial Conversion
Feature</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">737,560</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">737,560</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Conversion of debt to equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">800,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">800</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">159,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">160,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px"><B>Balances, June&nbsp;30, 2008</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>24,766,117</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>24,766</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>17,902,840</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>$</B></TD>
    <TD align="right"><B>(14,758,356</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left"><B>$</B></TD>
    <TD align="right"><B>3,169,250</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>$</B></TD>
    <TD align="right"><B>(2,054,439</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">The accompanying notes are an integral part of these consolidated statements.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-7<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>



<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">LIFEVANTAGE CORPORATION AND SUBSIDIARY
</DIV>

<DIV align="left">
<A name="304"></A>
</DIV>
<DIV align="center" style="font-size: 10pt">CONSOLIDATED STATEMENTS OF CASH FLOWS</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="77%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="8" style="border-bottom: 1px solid #000000">For the years ended</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">June 30, 2008</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">June 30, 2007</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash Flows from Operating Activities:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(2,054,439</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(3,693,578</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Adjustments to reconcile net (loss)&nbsp;to net cash (used)&nbsp;by
operating activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="top"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Depreciation and amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">219,690</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">92,432</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Loss on disposition of assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">103,819</TD>
    <TD nowrap>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Stock based compensation to employees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">322,150</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,199,440</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Stock based compensation to non-employees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">155,953</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">177,110</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Non-cash interest expense from convertible debentures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">209,230</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Changes in operating assets and liabilities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Decrease/(increase) in accounts receivable, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">300,455</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(290,571</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">(Increase)/decrease in inventory</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(76,581</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,167</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Decrease in deposits to manufacturer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">110,812</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">166,510</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">(Increase)/decrease in prepaid expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(63,874</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">256,484</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Decrease/(increase) in deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">291,993</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(23,819</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">(Decrease) in accounts payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(8,896</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(465,134</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Increase/(decrease) in accrued expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107,457</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(168,494</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">(Decrease) in deferred revenue</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(307,485</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(326,700</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Decrease in deferred expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,758</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,870</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net Cash (Used) by Operating Activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right"><B>(747,777</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right"><B>(2,920,464</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="top"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash Flows (Used)/Provided by Investing Activities:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">(Purchase) of marketable securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,525,000</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Redemption of marketable securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">425,000</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,064,180</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">(Purchase) of equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(11,808</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(60,166</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">(Purchase) of intangible assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(58,490</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(149,068</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net Cash (Used)/Provided by Investing Activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right"><B>(1,170,298</B></TD>
    <TD nowrap><B>)</B></TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>2,854,946</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="top"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash Flows from Financing Activities:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net proceeds from revolving line of credit and accrued interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">166,620</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Principal payments under capital lease obligation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,301</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(1,984</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from margin debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,093,101</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Repayment from margin debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(2,093,101</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Issuance of common stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">453,571</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">150</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Private placement fees</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(153,692</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from issuance of private placement of convertible
debentures &#038; warrants</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,490,000</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Net Cash Provided/(Used) by Financing Activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>1,954,198</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right"><B>(1,834</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="top"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Increase/(decrease) in cash and cash equivalents</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>36,123</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right"><B>(67,352</B></TD>
    <TD nowrap><B>)</B></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and
Cash Equivalents &#150; beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">160,760</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">228,112</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Cash and
Cash Equivalents &#150; end of period</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>$</B></TD>
    <TD align="right"><B>196,883</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>$</B></TD>
    <TD align="right"><B>160,760</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">The accompanying notes are an integral part of these consolidated statements.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-8<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">LIFEVANTAGE CORPORATION AND SUBSIDIARY<BR>
CONSOLIDATED STATEMENTS OF CASH FLOWS
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="77%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="8" style="border-bottom: 1px solid #000000">For the years ended</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">June 30, 2008</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">June 30, 2007</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Non Cash Investing and Financing Activities:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Conversion of long-term debt to equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">160,000</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Warrants issued for private placement
fees for convertible debentures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">94,488</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Cash paid for interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">87,718</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Cash paid for income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">The accompanying notes are an integral part of these consolidated statements.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-9<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LIFEVANTAGE
CORPORATION AND SUBSIDIARY</B>
</DIV>

<DIV align="left">
<A name="305"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 0pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 1
- - Organization and Basis of Presentation:</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lifevantage Corporation (&#147;LifeVantage&#148; or the &#147;Company&#148;) was formed under Colorado law in June
1988, under the name Andraplex Corporation. The Company amended its name to Yaak River Resources,
Inc. in January&nbsp;1992, to Lifeline Therapeutics, Inc. in October&nbsp;2004 and to Lifevantage Corporation
in November&nbsp;2006. The Company is in the business of marketing and selling its primary product
Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> to individuals throughout the United States of America and certain foreign
countries. The Company began selling to individuals during the fiscal year ended June&nbsp;30, 2005 and
to retail stores beginning in fiscal year 2006. The Company&#146;s principal operations are located in
San Diego, California.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October&nbsp;26, 2004, the Company consummated an Agreement and Plan of Reorganization with
Lifeline Nutraceuticals Corporation (&#147;LNC&#148;), a privately held Colorado corporation, formed on July
1, 2003. The shareholders of LNC exchanged 81% of their outstanding shares of common stock for
15,385,110 shares of common stock of the Company, which represented 94% of the then issued and
outstanding shares of the Company. The Company assumed the obligations of LNC note holders as part
of the transaction. The financial statements presented reflect the consolidated operations of both
LifeVantage and LNC for the two years ended June&nbsp;30, 2008 and June&nbsp;30, 2007.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Liquidity and management&#146;s plans for operations</B>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As shown in the accompanying financial statements, the Company incurred net losses of
($2,054,439) and ($3,693,578) for the years ended June&nbsp;30, 3008 and 2007 respectively. In addition,
the Company reported net cash used by operating activities of ($739,389) for the year ended June
30, 2008 compared with cash used by operations of ($3,128,090) during fiscal year ended June&nbsp;30,
2007.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To address these losses, management began a turn-around strategy in January&nbsp;2007 to reduce
operating expenses while implementing new customer service retention and recapture programs.
Management&#146;s cost containment and reduction measures and new plans under this strategy include the
following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">The Company re-evaluated its marketing programs and has either cancelled or allowed
to expire various marketing and positioning contracts, replacing them with a more
targeted advertising plan. The marketing plan can be expanded or contracted according
to available cash flows. Cash flow savings from changing from the Company&#146;s previous
national print and radio marketing programs to the Company&#146;s more targeted marketing
approach were approximately $1,600,000 per year.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Beginning during fiscal 2007, in effort to cut expenses, several employees were
terminated and consultant contracts were allowed to expire without renewal and
management has balanced corporate responsibilities among remaining personnel. Cash flow
savings from changes to the Company&#146;s current personnel were approximately $1,100,000
per year.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">The Company re-evaluated its consultant contracts including web hosting and call
center operations and has either cancelled various contracts or allowed them to expire
and replaced them with more cost-efficient contracts. Cash flow savings from the
expiration or termination of the Company&#146;s consultant contracts were approximately
$400,000 per year.</div></TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->F-10<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">In January&nbsp;2008, the Company hired David Brown as its President and CEO in an effort
to grow sales and add new revenue streams. Mr.&nbsp;Brown has vast nutraceutical industry
experience and a proven track record of strong revenue growth with other companies he
has previously led.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">The Company has adopted new marketing promotions as well as new customer service
retention and recapture programs. Such programs are not expected to increase sales
immediately but are expected to reduce direct sales erosion experienced in fiscal 2007.
Sales increases are expected to result from the redesign of Company&#146;s product website
and enhanced direct to consumer marketing, as well as expansion into the natural
product market with contracts with several well-known natural foods retailers and
brokers.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">The Company has retained the services of Peter Baloff, an award winning producer and
director, who has produced over 200 commercials and sales films for companies including
Princess Cruises, Hallmark, Colombia Pictures, Universal Pictures, CBS, NBC and Capitol
Records. Mr.&nbsp;Baloff produced 1-minute, 2-minute and 5-minute spots for LifeVantage,
which have been aired on the Biography Channel, Fit-TV, Food-TV, The Learning Channel,
and the Travel Channel.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective September&nbsp;26, 2007 and October&nbsp;31, 2007, the Company issued debentures convertible
into the Company&#146;s common stock in a private placement offering. The net proceeds received by the
Company of approximately $1,328,000 are being used to expand marketing efforts, scientific studies,
intellectual property protection, as well as to provide the Company with additional working
capital. The additional funding improved the Company&#146;s liquidity position from June&nbsp;30, 2007 levels
and allowed the Company to pursue plans for generating additional revenue while monitoring cash
outflow. However, there can be no assurance that these cost reduction and containment measures
will result in positive cash flow.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 2
- - Summary of Significant Accounting Policies</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><B>Consolidation</B>

</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying financial statements include the accounts of the Company and its wholly-owned
subsidiary, LNC. All inter-company accounts and transactions between the entities have been
eliminated in consolidation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Use of Estimates</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management of the Company has made a number of estimates and assumptions relating to the
reporting of revenues, expenses, assets and liabilities and the disclosure of contingent assets and
liabilities to prepare these consolidated financial statements. Actual results could differ from
those estimates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Revenue Recognition</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We ship the majority of our product directly to the consumer via UPS and receive substantially
all payment for these sales in the form of credit card charges. Revenue from direct product sales
to customers is recognized upon passage of title and risk of loss to customers when product is
shipped from the fulfillment facility. Sales revenue and estimated returns are recorded when
product is shipped. The Company&#146;s direct customer return policy is to provide a 30-day money back
guarantee on orders placed by customers. After 30&nbsp;days, the Company does not issue refunds to
direct sales customers for returned product. To date, the Company has experienced
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-11<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">monthly returns of approximately 1% of sales. As of June&nbsp;30, 2008 and June&nbsp;30, 2007, the
Company&#146;s reserve balance for returns and allowances was approximately $97,700 and $112,600,
respectively.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For retail customers, the Company analyzes its contracts to determine the appropriate
accounting treatment for its recognition of revenue on a customer by customer basis.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We entered into an agreement with General Nutrition Distribution, LP (&#147;GNC&#148;) for the sale of
Protandim<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> pursuant to which GNC has the right to return any and all product shipped to
GNC, at any time, for any reason. In July&nbsp;2006, the Company began the recognition of revenue
under the agreement with GNC due to the accumulation of historical sell-through and return data.
The Company recognizes revenue and its related costs when it obtains sufficient information to
reasonably estimate the amount of future returns. Accordingly, the Company recognizes revenue
associated with sales to GNC when the product is sold by GNC with an allowance for future returns
based on historical product return information. Prior to July&nbsp;2006, all revenue and related costs
from GNC were deferred.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In July&nbsp;2006, LifeVantage entered into an agreement with CVS/pharmacy (&#147;CVS&#148;) for the sale of
Protandim&#174; throughout the CVS store network. The Company agreed to accept, pursuant to a return
authorization, a portion of the product from CVS stores that had not been sold through this retail
channel. During fiscal year ended June&nbsp;30, 2008, sufficient bottles were received from CVS to
offset the receivable from CVS and both parties agreed to waive any further obligations from the
other party and the supply arrangement was terminated.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Accounts Receivable</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s accounts receivable primarily consist of receivables from retail distributors.
Management reviews accounts receivable on a regular basis to determine if any receivables will
potentially be uncollectible. The Company had one national retail distributor, GNC, and several
regional natural products distributors as of June&nbsp;30, 2008. Two of the Company&#146;s retail
distributors comprise 13% and 27% of the Company&#146;s accounts receivable balance as of June&nbsp;30, 2008.
Based on the current aging of its accounts receivable, the Company believes that it is not
necessary to maintain an allowance for doubtful accounts.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For credit card sales to direct sales customers, the Company verifies the customer&#146;s credit
card prior to shipment of product. Payment not yet received from credit card sales is treated as a
deposit in transit and is not reflected as a receivable on the accompanying balance sheet. Based
on the Company&#146;s verification process and historical information available, management does not
believe that there is justification for an allowance for doubtful accounts on credit card sales
related to its direct sales as of June&nbsp;30, 2008. For direct sales, there is no bad debt expense
for the fiscal years ended June&nbsp;30, 2008 or June&nbsp;30, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Inventory</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory is stated at the lower of cost or market value. Cost is determined using the
first-in, first-out method. The Company has capitalized payments to its contract manufacturer for
the acquisition of raw materials and commencement of the manufacturing, bottling and labeling of
the Company&#146;s product. The contract with the manufacturer can be terminated by either party with
90&nbsp;days written notice. As of June&nbsp;30, 2008 and June&nbsp;30, 2007, inventory consisted of:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 0px solid #000000">June 30,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Finished goods</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">87,393</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,947</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Packaging supplies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,022</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,887</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total inventory</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">104,415</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27,834</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-12<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Earnings per share</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic loss per share is computed by dividing the net income or loss by the weighted average
number of common shares outstanding during the period. Diluted earnings per common share are
computed by dividing net income by the weighted average common shares and potentially dilutive
common share equivalents. The effects of approximately 48.7&nbsp;million common shares issuable
pursuant to the convertible debentures and warrants issued in the Company&#146;s private placement
offerings, compensation based warrants issued by the Company and the Company&#146;s 2007 Long-Term
Incentive Plan are not included in computations when their effect is antidilutive. Because of the
net loss for years ended June&nbsp;30, 2008 and June&nbsp;30, 2007, the basic and diluted average outstanding
shares are the same, since including the additional potential common share equivalents would have
an antidilutive effect on the loss per share calculation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Research and Development Costs</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company expenses all costs related to research and development activities as incurred.
Research and development expenses for the years ended June&nbsp;30, 2008 and June&nbsp;30, 2007 were $324,106
and $245,561, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Advertising Costs</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company expenses advertising costs as incurred. The Company expensed the cost of
producing commercials when the first commercial ran. Advertising expense for the years ended June
30, 2008 and June&nbsp;30, 2007 were $742,989 and $1,264,872, respectively. The lower fiscal 2008
advertising costs were a result of cost containment measures taken.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Cash and Cash Equivalents</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company considers only its monetary liquid assets with original maturities of three months
or less as cash and cash equivalents in accordance with Statement of Financial Accounting Standards
No.&nbsp;115, <I>Accounting for Certain Investments in Debt and Equity Securities</I>, (&#147;SFAS 115&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Marketable Securities</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From time to time, the Company has invested in marketable securities, including auction rate
preferred securities of closed-end funds (&#147;ARPS&#148;) to maximize interest income. As the auction
process for resetting interest rates has ceased as of mid-February&nbsp;2008, we have been notified by
several of the Corporate entities that have issued ARPS of plans to refinance these instruments.
The Company considered its investment in these instruments as marketable securities available for
sale. Based upon the most current information, we believe that these securities will settle
within the next twelve months. As such, these securities have been classified as current. In
accordance with SFAS 115, the Company classified the investment as &#147;<I>available for sale</I>&#148; securities.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These marketable securities which historically have been extremely liquid have been adversely
affected by the broader national liquidity crisis. As noted above, the Company considers these
securities as current assets, however, future economic events could cause a portion of these to
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-13<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">be classified as long-term. The Company continues to consider these holdings as having an
insignificant risk of change in value due to their underlying issuers, and the Company is currently
taking advantage of higher interest yields as a result of the failed auctions.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company did not record any liquidity impairment related to these investments as it does
not believe that the underlying credit quality of the assets has been impacted by the reduced
liquidity of these investments.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the third quarter of our fiscal year 2008, the Company established a margin account to
borrow against marketable securities so that sales of these securities would not have to occur in
order to fund operating needs of the Company. The interest rate on amounts borrowed was
slightly less than the interest being earned.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;Investment in marketable securities are summarized as follows as of fiscal 2008
and 2007:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Unrealized</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Estimated Fair</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">(Loss)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">As of June&nbsp;30, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Available for sale securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,100,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">As of June&nbsp;30, 2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Available for sale securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"></TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Deposit with Manufacturer</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At June&nbsp;30, 2008, the Company had a deposit of $277,979 with its contract manufacturer. At
June&nbsp;30, 2007, the Company had a deposit of $388,791 with its contract manufacturer for acquisition
of raw materials and production of finished product. Throughout fiscal 2008 and 2007, the Company
offset reductions in the deposit against the trade payable to the manufacturer as purchases of
product occurred. As of June&nbsp;30, 2008, the trade payable to the contract manufacturer was
approximately $14,600.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Shipping and Handling</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shipping and handling costs associated with inbound freight and freight out to customers are
included in cost of sales. Shipping and handling fees charged to customers are included in sales.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->F-14<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Property and Equipment</B>
</DIV>



<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property, software, and equipment are recorded at cost. Depreciation of property and
equipment is expensed in amounts sufficient to relate the expiring costs of depreciable assets to
operations over estimated service lives, principally using the straight-line method. Estimated
service lives range from three to seven years. When such assets are sold or otherwise disposed of,
the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss
is reflected in operations in the period of disposal. The cost of normal maintenance and repairs
is charged to expense as incurred. Significant expenditures that increase the useful life of an
asset are capitalized and depreciated over the estimated useful life of the asset. Property and
equipment consist of:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">June 30,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">159,490</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">148,899</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Software</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60,925</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">59,708</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accumulated depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(156,856</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(99,692</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Property and equipment, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">63,559</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">108,915</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Goodwill and Other Intangible Assets</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has adopted the provisions of Statement of Financial Accounting Standards No.&nbsp;142,
<I>Goodwill and Other Intangible Assets</I>, (&#147;SFAS 142&#148;). SFAS 142 establishes standards for accounting
for goodwill and other intangibles acquired in business combinations. Goodwill and other
intangibles with indefinite lives are not amortized.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">As of June&nbsp;30, 2008 and June&nbsp;30, 2007 intangible assets consisted of:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000">June 30,</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">2007</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Patent costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,246,074</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,203,659</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Trademark costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">123,526</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107,451</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amortization of
patents &#038;
trademarks</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(99,437</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Intangible assets, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,270,163</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,311,110</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Patents</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The primary purpose of purchasing the remaining interest in the Company&#146;s subsidiary, LNC, was
to gain control over the Company&#146;s intellectual property, i.e. patents. As a result, the
$2,000,000 purchase price has been allocated entirely to patent costs.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the $2,000,000 cost of acquiring the remaining interest in LNC, the costs of
applying for patents are also capitalized and, once the patent is granted, will be amortized on a
straight-line basis over the lesser of the patent&#146;s economic or legal life. Capitalized costs will
be expensed if patents are not granted. The Company reviews the carrying value of its patent costs
periodically to determine whether the patents have continuing value and such reviews could result
in impairment of the recorded amounts. As of June&nbsp;30, 2008, two U.S. patents have been granted and
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-15<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">amortization of these commenced upon the date of the grant and will continue over their
remaining legal lives.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Impairment of Long-Lived Assets</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to guidance established in Statement of Financial Accounting Standards No.&nbsp;144,
<I>Accounting for the Impairment or Disposal of Long-Lived Assets</I>, (&#147;SFAS 144&#148;), the Company assesses
impairment whenever events or changes in circumstances indicate that the carrying amount of a
long-lived asset may not be recoverable. When an assessment for impairment of long-lived assets,
long-lived assets to be disposed of, and certain identifiable intangibles related to those assets
is performed, the Company is required to compare the net carrying value of long-lived assets on the
lowest level at which cash flows can be determined on a consistent basis to the related estimates
of future undiscounted net cash flows for such properties. If the net carrying value exceeds the
net cash flows, then impairment is recognized to reduce the carrying value to the estimated fair
value, generally equal to the future discounted net cash flow.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The recurring losses experienced by the Company have resulted in management&#146;s assessment of
impairment with respect to the capitalized patent costs. Analysis generated for this assessment
concluded that sales volumes, less the cost of manufacturing the product sold and less the
marketing and sales cost of generating the revenues, support management&#146;s conclusion that no
impairment to the capitalized patent costs has occurred as of June&nbsp;30, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Income Taxes</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes are accounted for under the asset and liability method. Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are
measured using statutory tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on deferred tax assets
and liabilities from a change in tax rates is recognized in income in the period that includes the
effective date of the change.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Concentration of Credit Risk</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statement of Financial Accounting Standards No.&nbsp;105, <I>Disclosure of Information About Financial
Instruments with Off-Balance Sheet Risk and Financial Instruments with Concentrations of Credit
Ris</I>k, (&#147;SFAS 105&#148;), requires disclosure of significant concentrations of credit risk regardless of
the degree of such risk. Financial instruments with significant credit risk include cash and
marketable securities. At June&nbsp;30, 2008, the Company had approximately $1,100,000 with one
financial institution in an investment management account.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Stock-Based Compensation</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company began using the fair value approach, effective beginning in the first quarter of
fiscal 2007, to account for stock-based compensation, in accordance with the modified version of
prospective application as prescribed by Statement of Financial Accounting Standards No.&nbsp;123(R),
<I>Share-Based Payment</I>, (&#147;SFAS 123(R)&#148;).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective July&nbsp;1, 2006, the Company adopted SFAS 123(R) for all options and warrants granted
to employees and directors. In accordance with SFAS 123(R), payments in equity instruments for
goods or services are accounted for by the fair value method. For the year ended June&nbsp;30, 2008,
stock based compensation of $478,103, was reflected as an increase to additional paid in capital.
Of the total $478,103 stock based compensation, $322,150 was employee related and $155,953 was
non-employee related.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-16<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In an effort to advance the interests of the Company and its shareholders, the Company adopted
and the shareholders approved the Company&#146;s 2007 Long-Term Incentive Plan (the &#147;Plan&#148;), effective
November&nbsp;21, 2006, to provide incentives to certain eligible employees who contribute significantly
to the strategic and long-term performance objectives and growth of the Company. A maximum of
6,000,000 shares of the Company&#146;s common stock can be issued under the Plan in connection with the
grant of awards. Awards to purchase common stock have been granted pursuant to the Plan and are
outstanding to various employees, officers, directors and Scientific Advisory Board (&#147;SAB&#148;) members
at prices between $0.19 and $3.47 per share, vesting over one- to three-year periods. Awards
expire in accordance with the terms of each award and the shares subject to the award are added
back to the Plan upon expiration of the award. Awards outstanding as of June&nbsp;30, 2008, net of
awards expired, is for the purchase of 3,634,365 shares of the Company&#146;s common stock.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Options granted prior to November&nbsp;21, 2006, the effective date of the Plan, were terminated
and new options on substantially identical terms and provisions (i.e., identical number of
underlying shares, exercise price, vesting schedule, and expiration date as the original options)
were granted under the Plan. As no modifications to the terms and provisions of the previously
granted options occurred, the Company accounted for the related compensation expense under SFAS
123(R) as it did prior to the effective date of the Plan.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In certain circumstances, the Company issued common stock for invoiced services, to pay
contractors and vendors and in other similar situations. In accordance with Emerging Issues Task
Force Issue No.&nbsp;96-18, <I>Accounting for Equity Instruments That Are Issued to Other Than Employees
for Acquiring, or in Conjunction with Selling, Goods or Services</I>, (&#147;EITF 96-18&#148;), payments in
equity instruments to non-employees for goods or services are accounted for by the fair value
method, which relies on the valuation of the service at the date of the transaction, or public
stock sales price, whichever is more reliable as a measurement.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation expense was calculated using the fair value method during the fiscal years ended
June&nbsp;30, 2008 and 2007 using the Black-Scholes option pricing model. The following assumptions were
used for options and warrants granted during the years ended June&nbsp;30, 2008 and 2007:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>risk-free interest rate of between 2.31 and 4.26&nbsp;percent in fiscal 2008
and between 4.54 and 4.97 in fiscal year 2007.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>dividend yield of -0- percent in fiscal 2008 and 2007;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>expected life of 3 - 6&nbsp;years in fiscal 2008 and 2007;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a volatility factor of the expected market price of the Company&#146;s common stock
of 74&nbsp;percent in fiscal 2008 and 2007.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because of the limited historical trading period of our common stock, the expected volatility
of our common stock was estimated at 74&nbsp;percent, based on a review of the volatility of entities
considered by management as most comparable to our business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Derivative financial instruments</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We do not use derivative instruments to hedge exposures to cash flow, market, or foreign
currency risks.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We analyze convertible debentures under the guidance provided by Emerging Issues Task Force
Issue No.&nbsp;00-19, <I>Accounting for Derivative Financial Instruments Indexed to, and Potentially</I>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-17<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="justify" style="font-size: 10pt; margin-top: 6pt"><I>Settled in, a Company&#146;s Own Stock, </I>(&#147;EITF 00-19&#148;) and Emerging Issues Task Force Issue No.
05-02, <I>Meaning of &#147;Conventional Convertible Debt Instrument&#148; in Issue No.&nbsp;00-19</I>, (&#147;EITF 05-02&#148;) and
review the appropriate classification under the provisions of Statement of Financial Accounting
Standards No.&nbsp;133, <I>Accounting for Derivative Instruments and Hedging Activities</I>, (&#147;SFAS 133&#148;), and
EITF 00-19.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We review the terms of convertible debt and equity instruments we issue to determine whether
there are embedded derivative instruments, including the embedded conversion option, that are
required to be bifurcated and accounted for separately as derivative instrument liabilities. Also,
in connection with the sale of convertible debt and equity instruments, we may issue freestanding
options or warrants that may, depending on their terms, be accounted for as derivative instrument
liabilities, rather than as equity. For option-based derivative financial instruments, we use the
Black-Scholes option pricing model to value the derivative instruments.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain instruments, including convertible debt and equity instruments and the freestanding
warrants issued in connection with those convertible instruments, may be subject to registration
rights agreements, which impose penalties for failure to register the underlying common stock by a
defined date. These potential penalties are accounted for in accordance with Statement of Financial
Accounting Standards No.&nbsp;5, <I>Accounting for Contingencies</I>, (&#147;SFAS 5&#148;)<I>.</I>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the embedded conversion option in a convertible debt instrument is not required to be
bifurcated and accounted for separately as a derivative instrument, we review the terms of the
instrument to determine whether it is necessary to record a beneficial conversion feature, in
accordance with Emerging Issues Task Force Issue No.&nbsp;98-05, <I>Accounting for Convertible Securities
with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, </I>(&#147;EITF 98-05&#148;),
and Emerging Issues Task Force Issue No.&nbsp;00-27, <I>Application of Issue No.&nbsp;98-5 to Certain
Convertible Instruments</I>, (&#147;EITF 00-27&#148;). When the effective conversion rate of the instrument at
the time it is issued is less than the fair value of the common stock into which it is convertible,
we recognize a beneficial conversion feature, which is credited to equity and reduces the initial
carrying value of the instrument.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When convertible debt is initially recorded at less than its face value as a result of
allocating some or all of the proceeds received in accordance with Accounting Principles Board
(&#147;APB&#148;) Opinion No.&nbsp;14, <I>Accounting for Convertible Debt and Debt Issued with Stock Purchase
Warrants</I>, (&#147;APB 14&#148;), to derivative instrument liabilities, to a beneficial conversion feature or
to other instruments, the discount from the face amount, together with the stated interest on the
convertible debt, is amortized over the life of the instrument through periodic charges to income,
using the effective interest method.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Reclassification</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain prior period amounts have been reclassified to comply with current period
presentation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Segments of an Enterprise and Related Information</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statement of Financial Accounting Standards No.&nbsp;131, <I>Disclosures about Segments of an
Enterprise and Related Information, </I>(&#147;SFAS 131&#148;) replaces the industry segment approach under
previously issued pronouncements with the management approach. The management approach designates
the internal organization that is used by management for allocating resources and
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-18<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">assessing performance as the source of the Company&#146;s reportable segments. SFAS 131 also requires
disclosures about products and services, geographic areas and major customers. At present, the
Company only operates in one segment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Comprehensive Income</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statement of Financial Accounting Standards No.&nbsp;130, <I>Reporting Comprehensive Income</I>, (&#147;SFAS
130&#148;), requires the presentation and disclosure of all changes in equity from non-owner sources as
&#147;Comprehensive Income&#148;. The Company had comprehensive income/(loss) for the years ended June&nbsp;30,
2008 and 2007 of ($2,054,439) and ($3,637,971), respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Effect of New Accounting Pronouncements</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In September&nbsp;2006, the FASB issued Statement of Financial Accounting Standards No.&nbsp;157, <I>Fair
Value Measurements</I>, (&#147;SFAS 157&#148;), and is effective for financial statements for fiscal years
beginning after November&nbsp;15, 2007. SFAS 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles (&#147;GAAP&#148;), and expands disclosures
about fair value measurements. This Statement applies under other accounting pronouncements that
require or permit fair value measurements, the Board having previously concluded in those
accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this
Statement does not require any new fair value measurements. However, for some entities, the
application of this Statement will change current practice. The Company will adopt SFAS 157 and
follow its disclosure requirements beginning first quarter of fiscal 2009.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December&nbsp;2007, the FASB revised Statement of Financial Accounting Standards No.&nbsp;141,
<I>Business Combinations (revised 2007), </I>(&#147;SFAS 141(R)&#148;). SFAS 141(R) replaces FASB Statement No.&nbsp;141,
<I>Business Combinations, </I>(&#147;SFAS 141&#148;)<I>. </I>This Statement retains the fundamental requirements in
Statement 141 that the acquisition method of accounting (which SFAS 141 called the <I>purchase method</I>)
be used for all business combinations and for an acquirer to be identified for each business
combination. The scope of SFAS 141(R) is broader than that of SFAS 141, which applied only to
business combinations in which control was obtained by transferring consideration. By applying the
same method of accounting&#151;the acquisition method&#151;to all transactions and other events in which one
entity obtains control over one or more other businesses, SFAS 141(R) improves the comparability of
the information about business combinations provided in financial reports. We anticipate that SFAS
141(R) will not have a material impact on our financial statements.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In December&nbsp;2007, the FASB issued Statement of Financial Accounting Standards No.&nbsp;160,
<I>Noncontrolling Interest in Consolidated Financial Statements-an amendment of ARB No.&nbsp;51</I>, (&#147;SFAS
160&#148;). SFAS 160 states that accounting and reporting for minority interests will be recharacterized
as noncontrolling interests and classified as a component of equity. SFAS 160 also establishes
reporting requirements that provide disclosures that identify and distinguish between the interests
of the parent and the interests of the noncontrolling owners. SFAS 160 is effective beginning
January&nbsp;1, 2009, and early adoption is prohibited. SFAS 160 requires retroactive adoption of the
presentation and disclosure requirements for existing minority interests. We anticipate that SFAS
160 will not have a material impact on our financial statements.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In March&nbsp;2008, the FASB issued Statement of Financial Accounting Standards No.&nbsp;161,
<I>Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No.
133</I>, (&#147;SFAS 161&#148;). SFAS No.&nbsp;161 requires disclosures of how and why an entity uses derivative
instruments, how derivative instruments and related hedged items are accounted for and
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-19<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">how derivative instruments and related hedged items affect an entity&#146;s financial position,
financial performance, and cash flows. SFAS No.&nbsp;161 is effective for fiscal years beginning after
November&nbsp;15, 2008, with early adoption permitted. We anticipate that SFAS 161 will not have a
material impact on our financial statements.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have reviewed all other recently issued, but not yet effective, accounting pronouncements
and do not believe any such pronouncements will have a material impact on our financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 3
&#150; Accounting for Intellectual Property</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-lived assets of the Company are reviewed as to whether their carrying value has become
impaired, pursuant to guidance established in Statement of Financial Accounting Standards No.&nbsp;144,
<I>Accounting for the Impairment or Disposal of Long-Lived Assets</I>, (&#147;SFAS 144&#148;). The Company assesses
impairment whenever events or changes in circumstances indicate that the carrying amount of a
long-lived asset may not be recoverable. When an assessment for impairment of long-lived assets,
long-lived assets to be disposed of, and certain identifiable intangibles related to those assets
is performed, the Company is required to compare the net carrying value of long-lived assets on the
lowest level at which cash flows can be determined on a consistent basis to the related estimates
of future undiscounted net cash flows for such properties. If the net carrying value exceeds the
net cash flows, then impairment is recognized to reduce the carrying value to the estimated fair
value, generally equal to the future discounted net cash flow.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The recurring losses experienced by the Company have resulted in management&#146;s assessment of
impairment with respect to the capitalized patent costs. Analysis generated for this assessment
concluded that sales volumes, less the cost of manufacturing the product sold and less the
marketing and sales cost of generating the revenues, support management&#146;s conclusion that no
impairment to the capitalized patent costs has occurred.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 4
&#150; Convertible Debentures</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;26, and October&nbsp;31, 2007, the Company issued convertible debentures in a private
placement offering that bear interest at 8&nbsp;percent per annum and have a term of three years. The
convertible debentures are convertible into the Company&#146;s common stock at $0.20 per share during
their term and at maturity, at the Company&#146;s option, may be repaid in full or converted into common
stock at the lower $0.20 per share or the average trading price for the 10&nbsp;days immediately prior
to the maturity date.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross proceeds of $1,490,000 were distributed to the Company pursuant to the issuance of
convertible debentures in the private placement offering. The Company also issued warrants to
purchase shares of the Company&#146;s common stock at $0.30 per share in the private placement offering.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to conversion or repayment of the convertible debentures, if (i)&nbsp;the Company fails to
remain subject to the reporting requirements under the Exchange Act for a period of at least 45
consecutive days, (ii)&nbsp;the Company fails to materially comply with the reporting requirements under
the Exchange Act for a period of 45 consecutive days, (iii)&nbsp;the Company&#146;s common stock is no longer
quoted on the Over the Counter Bulletin Board or listed or quoted on a securities exchange, or (iv)
a Change of Control (as defined in the convertible debentures) is consummated, the Company will be
required upon the election of the holder to redeem the convertible debentures in an amount
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-20<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">equal to 150&nbsp;percent of the principal amount of the convertible debenture plus any accrued or
unpaid interest.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company determined that the convertible debentures did not satisfy the definition of a
conventional convertible instrument under the guidance provided in EITF Issues 00-19 and 05-02, as
an anti-dilution provision in the convertible debentures reduces the conversion price dollar for
dollar if the Company issues common stock with a price lower than the conversion price of the
convertible debentures. However, the Company has reviewed the requirements of EITF Issue 00-19 and
concluded that the embedded conversion option in the convertible debentures qualifies for equity
classification under EITF Issue 00-19, and thus, is not required to be bifurcated from the host
contract. The Company also determined that the warrants issued in the private placement offering
qualify for equity classification under the provisions of SFAS 133 and EITF Issue 00-19.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the Company has reviewed the terms of the convertible debentures to determine
whether there are any other embedded derivative instruments that may be required to be bifurcated
and accounted for separately as derivative instrument liabilities. Certain events of default
associated with the convertible debentures, including the holder&#146;s right to demand redemption in
certain circumstances, have risks and rewards that are not clearly and closely associated with the
risks and rewards of the debt instruments in which they are embedded. The Company has reviewed
these embedded derivative instruments to determine whether they should be separated from the
convertible debentures. However, the Company does not believe that the value of these derivative
instrument liabilities is material.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with the provisions of APB Opinion No.&nbsp;14, the Company allocated the proceeds
received in the private placement to the convertible debentures and warrants to purchase common
stock based on their relative estimated fair values. In accordance with EITF Issues 98-5 and 00-27,
management determined that the convertible debentures contained a beneficial conversion feature
based on the effective conversion price after allocating proceeds of the convertible debentures to
the common stock purchase warrants. As a result, the Company allocated $174,255 to the convertible
debentures, $578,185 to the common stock warrants, which was recorded in additional
paid-in-capital, and $737,560 to the beneficial conversion feature. The discount from the face
amount of the convertible debentures represented by the value initially assigned to any associated
warrants and to any beneficial conversion feature is amortized over the period to the due date of
each convertible debenture, using the effective interest method.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective interest associated with the convertible debentures totaled $296,948, of which
$159,443 related to the amortization of the debt discount and $137,505 related to acceleration of
the beneficial conversion feature from the conversion of debt to equity for the fiscal year June
30, 2008, and none for the fiscal year June&nbsp;30, 2007. Effective interest is accreted to the
balance of convertible debt until maturity. A total of $256,567 was paid for commissions and
expenses incurred in the private placement offering which is being amortized over the term of the
convertible debentures on a straight-line basis. As of June&nbsp;30, 2008, the Company had recorded
amortization expense of $63,083.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 5
&#150; Line of Credit</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the fiscal year, the Company established a line of credit of approximately $550,000 to
borrow against its marketable securities. The interest rate charged through June&nbsp;30, 2008, 4.47
percent, is 0.53&nbsp;percentage points below the highest published Wall Street Journal Prime Rate,
which
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-21<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">was 5.0&nbsp;percent as of June&nbsp;30, 2008. As of June&nbsp;30, 2008, the Company has borrowed $166,620 from
the line.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 6
&#150; Stockholders&#146; Equity</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective July&nbsp;1, 2006, the Company adopted SFAS 123(R) for employees and directors. In
accordance with SFAS 123(R), payments in equity instruments for goods or services are accounted for
by the fair value method. For the fiscal year ended June&nbsp;30, 2008 and 2007, stock based
compensation of $478,103 and $1,345,200, respectively, was reflected as an increase to additional
paid in capital. Of the $478,103 stock based compensation for the fiscal year June&nbsp;30, 2008,
$322,150 was employee related and $155,953 was non-employee related. For the fiscal year ended
June&nbsp;30, 2007 stock based compensation of $1,199,440 was employee related and $145,760 was
non-employee related.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the fiscal year ended June&nbsp;30, 2008, the Company granted warrants and options to
consultants for services rendered, under EITF Issue 96-18, &#147;Accounting for Equity Instruments That
Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or
Services.&#148; Warrants to purchase 1,645,000 shares of the Company&#146;s common stock were granted to
various consultants for marketing and advertising services rendered to the Company during the
fiscal year ended June&nbsp;30, 2008.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective as of June&nbsp;28, 2007, the Company offered to reprice warrants to purchase 6,001,866
shares of our common stock issued to investors in 2005 pursuant to a private placement offering
(&#147;2005 warrants&#148;). The 2005 warrants were originally exercisable at $2.00 and $2.50 per share by
the warrant holder and were repriced to be exercisable at $0.30 per share upon the execution of a
warrant amendment by the Company and the warrant holder. As of June&nbsp;30, 2008, holders of 2005
warrants to purchase 3,395,706 shares of the Company&#146;s common stock had executed a warrant
amendment, and 2005 warrants to purchase 3,395,706 shares of the Company&#146;s common stock had been
repriced to be exercisable at $0.30 per share. As of June&nbsp;30, 2008, 2005 warrants to purchase
1,283,083 shares of the Company&#146;s common stock had been exercised at $0.30 per share. The
unexercised 2005 warrants expired on April&nbsp;18, 2008.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s Articles of Incorporation authorize the issuance of preferred shares. However,
as of June&nbsp;30, 2008, none have been issued nor have any rights or preferences been assigned to the
preferred shares by the Board of Directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 7
&#150; Stock Option Grants and Warrants</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Stock
Option Grants</U> &#150; During the year ended June&nbsp;30, 2008, the Company granted stock
options to various employees and directors of the Company. The options granted the right to
purchase shares of the Company&#146;s common stock at prices between $0.21 and $0.75 per share. The
options are not transferable and expire on various dates through June&nbsp;27, 2018. The Company
adopted SFAS 123(R) effective July&nbsp;1, 2006 under the modified prospective method and values stock
option compensation using the fair value method.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the year ended June&nbsp;30, 2007, the Company granted stock options to various employees
and directors of the Company. These options granted the right to purchase shares of the Company&#146;s
common stock at prices between $0.19 and $0.76 per share.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-22<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Warrants</U>
&#150; At June&nbsp;30, 2008, 11,275,080 warrants to purchase the Company&#146;s common
stock were outstanding. The warrants granted during year ended June&nbsp;30, 2008 are at exercise
prices ranging between $0.23 and $0.35 with a weighted average exercise price of $0.30 and
expiration dates ranging from April&nbsp;17, 2011 to February&nbsp;21, 2013. The warrants granted during
year ended June&nbsp;30, 2007 are at exercise prices ranging between $0.18 and $6.00 with a weighted
average exercise price of $0.58 and expiration dates ranging from July&nbsp;31, 2008 to February&nbsp;22,
2012.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">The following is a summary of stock options and warrants granted for the years ended June
30, 2008 and 2007.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="66%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Options</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Warrants</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Exercise Price</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding and exercisable, June&nbsp;30, 2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,716,000</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,169,294</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2.55</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,518,321</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,512,088</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.59</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cancelled</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Exercised</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Expired</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,334,290</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2.78</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding and exercisable, June&nbsp;30, 2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,900,031</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,681,382</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2.01</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,805,000</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,882,992</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cancelled</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Exercised</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(115,000</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,433,083</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.29</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Expired</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,955,666</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4,856,211</TD>
    <TD nowrap>)</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.68</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding and exercisable, June&nbsp;30, 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,634,365</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,275,080</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 3px double #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 8pt">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Options</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Warrants</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Year ended June&nbsp;30, 2007:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average exercise price</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.66</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.89</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average remaining contractual life (years)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.7</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.4</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average fair value of options and
warrants granted during 2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.66</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.89</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Year ended June&nbsp;30, 2008:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average exercise price</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.45</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.35</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average remaining contractual life (years)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.2</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.9</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average fair value of options and
warrants granted during 2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.38</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.30</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 8
&#150; Fair Value of Financial Instruments</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statement of Financial Accounting Standards No.&nbsp;107, <I>Disclosures about Fair Value of Financial
Instruments, </I>requires disclosures about the fair value for all financial instruments, whether or
not recognized, for financial statement purposes. Disclosures about fair value of financial
instruments are based on pertinent information available to management as of June&nbsp;30, 2008 and
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-23<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>



<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">2007. Accordingly, the estimates presented in these statements are not necessarily indicative of
the
amounts that could be realized on disposition of the financial instruments.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management has estimated the fair values of cash, marketable securities, accounts receivable,
accounts payable, and accrued expenses to be approximately their respective carrying values
reported in these financial statements because of their short maturities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 9
&#150; Income Taxes</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of June&nbsp;30, 2008, the Company had a net operating loss (&#147;NOL&#148;) carry-forward of
approximately $7,500,000. At June&nbsp;30, 2007, the Company had an NOL carry-forward of approximately
$5,900,000. The NOL may be offset against future taxable income, if any, through the year ended
June&nbsp;30, 2028. A portion of the net operating loss carryforward begins to expire in 2011, are
subject to review by the Internal Revenue Service, and may be subject to U.S. Internal Revenue Code
Section&nbsp;382 limitations. During fiscal year 2009, $658,000 of the Company&#146;s $673,000 charitable
contributions carryforward begins to expire.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The income tax expense (benefit)&nbsp;for the years ended June&nbsp;30 consists of the following:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(880,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: valuation allowance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(46,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">880,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income tax provision (benefit)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">The effective income tax rate for the years ended June&nbsp;30, 2008 and 2007 differs from the U.S.
Federal statutory income tax rate due to the following:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Federal statutory income tax rate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(34.00</TD>
    <TD nowrap>%)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(34.00</TD>
    <TD nowrap>%)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">State income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3.06</TD>
    <TD nowrap>%)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3.06</TD>
    <TD nowrap>%)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tax return to provision true-up</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">36.13</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD nowrap>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Permanent
differences &#150; interest on convertible debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.18</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">14.25</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:120px; text-indent:-0px">&#150; other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1.03</TD>
    <TD nowrap>%)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Increase in valuation allowance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2.25</TD>
    <TD nowrap>%)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">23.84</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income tax provision (benefit)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The components of the deferred tax assets and liabilities as of June&nbsp;30, 2008 and 2007 are as
follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred tax assets:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Federal and state net operating loss carryovers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,767,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,241,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Contribution carryover</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">249,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">260,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred revenue net of deferred expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">163,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">271,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stock option compensation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">148,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued interest &#038; allowance for returns</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">114,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred tax asset</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,441,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,772,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred tax liabilities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred debt offering costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(72,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">State income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(75,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Patents and trademarks</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(720,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Property &#038; equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total deferred liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(792,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(77,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net deferred tax asset</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,649,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,695,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Less: valuation allowance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,649,000</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,695,000</TD>
    <TD nowrap>)</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" nowrap align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred tax liability</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->F-24<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has provided a valuation allowance for the deferred tax asset at June&nbsp;30, 2008, as
the likelihood of the realization of the tax benefit of the net operating loss carryforward cannot
be determined. The valuation allowance decreased by approximately $46,000 for the year ended June
30, 2008 and the valuation allowance increased by approximately $880,000 for the year ended June
30, 2007.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July&nbsp;1, 2007, the Company adopted the provisions of Financial Accounting Standards Board
Interpretation No.&nbsp;48, <I>Accounting for Uncertainty in Income Taxes</I>, (&#147;FIN 48&#148;). Under FIN 48, in
order to recognize an uncertain tax benefit, the taxpayer must be more likely than not of
sustaining the position, and the measurement of the benefit is calculated as the largest amount
that is more than 50% likely to be realized upon recognition of the benefit. We believe the Company
has no uncertain tax positions and have fully reserved against the Company&#146;s future tax benefit
with a valuation allowance and do not expect significant changes in the amount of unrecognized tax
benefits that may occur within the next twelve months. Accordingly, we have not reserved for
interest or penalties. The tax years open for examination by the Internal Revenue Service include
returns for fiscal years June&nbsp;30, 2005, 2006 and 2007 and the open tax years by state tax
authorities include returns for fiscal years June&nbsp;30, 2004, 2005, 2006 and 2007. Adoption of FIN
48 did not have a material impact on LifeVantage&#146;s financial position.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note
10 &#150; Commitments and Contingencies</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In August&nbsp;2005, the Company entered into a 36-month lease for its office facilities. The
terms of the agreement required a $35,688 prepayment of rent for 5,736 square feet, with rents
ranging from $9,560 to $10,038 over the term of the lease. Associated with this lease, the Company
also tendered a $30,144 security deposit for which two-thirds, or $20,096, was returned to the
Company. The remaining one-third of the deposit is expected to be received within the next three
months. The Company was responsible for payments such as maintenance charges, property tax,
bookkeeping, insurance, and management fees. Rent expense totaled $123,457 and $117,235 for the
years ended June&nbsp;30, 2008 and 2007, respectively.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The lease for the Greenwood Village office expired July&nbsp;31, 2008 and the Company entered a
five (5)&nbsp;year lease in San Diego, California. Pursuant to the agreement, we prepaid rent of
$7,850. Monthly rent payments begin July&nbsp;1, 2008 are as follows: $7,850 for July, 2008 rent is
abated during the months of August, September and October&nbsp;2008, $7,850 for November&nbsp;2008 through
June&nbsp;2009; $8,125 from July&nbsp;2009 through June&nbsp;2010; $8,409 from July&nbsp;2010 through June&nbsp;2011; $8,073
from July&nbsp;2011 through June&nbsp;2012; and $9,008 from July&nbsp;2012 through June&nbsp;2013.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future minimum lease payments under the non-cancelable leases are as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Year ending June&nbsp;30, </DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">70,650</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2010</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">97,494</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100,907</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2012</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">104,439</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">108,094</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total future minimum Lease payments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">481,584</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-25<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the Company entered into a six-month sublease for office space in Littleton,
Colorado at a monthly rate of $842 per month effective July&nbsp;7, 2008. Effective July&nbsp;16, 2008, the
Company entered into a lease agreement for additional adjoining space for three months at a rate of
$630 per month. The terms of the agreement provide for month to month rent after the initial lease
term.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note
11 &#150; Interim Financial Results (Unaudited)</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following summarizes selected quarterly financial information for each of the last two
years for the periods ended June&nbsp;30, 2008 and 2007:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">LIFEVANTAGE CORPORATION AND SUBSIDIARY<BR>
CONDENSED CONSOLIDATED QUARTERLY RESULTS<BR>
(in &#145;000&#146;s except per share data)
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Year</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 1px solid #000000">Quarter</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">ended</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">Year ended June 30, 2008</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">First</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Second</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Third</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Fourth</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">June 30, 2008</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sales, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">807.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">796.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">783.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">812.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,200.2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">630.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">610.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">609.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">655.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,504.8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(298.7</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(401.8</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(604.7</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(749.2</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(2,054.4</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Per common share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loss per share, basic
and diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.01</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.02</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.03</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.03</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.09</TD>
    <TD nowrap>)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Year</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15" style="border-bottom: 1px solid #000000">Quarter</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">ended</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">Year ended June 30, 2007</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">First</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Second</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Third</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Fourth</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">June 30, 2007</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sales, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,075.5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,136.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">995.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">843.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">5,051.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,699.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">887.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">781.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">659.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,028.2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(820.2</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(1,765.0</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(582.3</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(526.1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(3,693.6</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Per common share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loss per share, basic
and diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.04</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.08</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.03</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.02</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">(0.17</TD>
    <TD nowrap>)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note
12 &#150; Subsequent Event</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective July&nbsp;1, 2008, the Company entered into a manufacturing and supply agreement with
Cornerstone Research &#038; Development, Inc. (&#147;Cornerstone&#148;). Cornerstone formulates and manufactures
hundreds of dietary supplement products, including single herb and herbal formulas, vitamins,
mineral, homeopathy, and specialty formulas. Cornerstone, which has an objective of bringing
products to its customers that are based on the latest science and are produced to the highest
manufacturing standards, utilizes cutting-edge capabilities in research, packaging, and developing
supplement products.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->F-26<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.19
<SEQUENCE>2
<FILENAME>d60449exv10w19.htm
<DESCRIPTION>LEASE
<TEXT>
<HTML>
<HEAD>
<TITLE>exv10w19</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif"></div>


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;10.19</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SHORT FORM OFFICE LEASE</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>BY
AND BETWEEN</B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">BERNARDO REGENCY, LLC,<BR>
a Delaware limited liability company,<BR>
AS LANDLORD
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>AND</b>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">LIFEVANTAGE CORPORATION<BR>
a Colorado corporation,<BR>
AS TENANT
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>FOR
THAT PROPERTY LOCATED AT</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>11545
W. B<FONT style="font-variant: SMALL-CAPS">ernardo</FONT>
C<FONT style="font-variant: SMALL-CAPS">ourt,</font>
S<FONT style="font-variant: SMALL-CAPS">an</FONT>
D<FONT style="font-variant: SMALL-CAPS">iego,</FONT> C<FONT style="font-variant: SMALL-CAPS">alifornia</FONT></b>
</DIV>

<div><P align="center" style="font-size: 10pt"><!-- Folio -->i<!-- /Folio --></div>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif"></div>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>T</B><FONT style="font-variant: SMALL-CAPS"><B>able of</b></FONT><b> C</B><FONT style="font-variant: SMALL-CAPS"><B>ontents</B></FONT>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="0%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">1.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">BASIC LEASE PROVISIONS
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">PROJECT
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">TERM
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">RENT
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">USE &#038; OCCUPANCY
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">8</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">6.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">SERVICES &#038; UTILITIES
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">9</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">7.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">REPAIRS
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">11</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">8.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">ALTERATIONS
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">11</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">9.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">INSURANCE
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">DAMAGE OR DESTRUCTION
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">13</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">11.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">INDEMNITY
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">14</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">12.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">CONDEMNATION
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">15</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">13.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">TENANT TRANSFERS
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">16</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">14.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">LANDLORD TRANSFERS
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">15.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">DEFAULT AND REMEDIES
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">16.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">SECURITY
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">17.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">MISCELLANEOUS
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">18.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">OPTION TO EXTEND
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left"><B>E</B><FONT style="font-variant: SMALL-CAPS"><B>xhibits</B></FONT><B>:</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">EXHIBIT A &#151; RULES &#038; REGULATIONS</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD  nowrap align="right" valign="top">A-1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">EXHIBIT B &#151; PARKING</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD nowrap align="right" valign="top">B-1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">EXHIBIT C &#151;NOTICE OF LEASE TERM</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD nowrap align="right" valign="top">C-1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">EXHIBIT D &#151; WORK LETTER</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD nowrap align="right" valign="top">D-1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>



<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">EXHIBIT E &#151; TENANT ESTOPPEL CERTIFICATE</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD nowrap align="right" valign="top">ED-1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>




<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->ii<!-- /Folio -->

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>I</B><FONT style="font-variant: SMALL-CAPS"><B>ndex of</b></FONT><b> D</B><FONT style="font-variant: SMALL-CAPS"><B>efined</b></FONT><b> T</B><FONT style="font-variant: SMALL-CAPS"><B>erms</B></FONT>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
<TD width="2%">&nbsp;</TD>
<TD width="1%">&nbsp;</TD>
<TD width="3%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top"></TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Additional Insured
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">12</TD>
<TD></TD>
    <TD align="left" valign="top">Mechanical Systems
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top"></TD>
    <TD align="right" valign="top">2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Additional Rent
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">5</TD>
<TD></TD>
    <TD align="left" valign="top">Month
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Affiliates
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">15</TD>
<TD></TD>
    <TD align="left" valign="top">NLT
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Alterations
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">11</TD>
<TD></TD>
    <TD align="left" valign="top">Notice Addresses
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Amortization Rate
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">6</TD>
<TD></TD>
    <TD align="left" valign="top">Option Rent
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">21</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Approved Working Drawings
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top"><I>Exhibit</I>&nbsp;&nbsp;&nbsp;</TD>
<TD align="right" valign="top"><I>D</I></TD>
<TD></TD>
    <TD align="left" valign="top">Option/Rent/Notice
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">21</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Architect
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top"><I>Exhibit</I>&nbsp;&nbsp;&nbsp;</TD>
<TD align="right" valign="top"><I>D</I></TD>
<TD></TD>
    <TD align="left" valign="top">Option Rent
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">21</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Base Building
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">2</TD>
<TD></TD>
    <TD align="left" valign="top">Options
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">21</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Base Rent
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">5</TD>
<TD></TD>
    <TD align="left" valign="top">Original Tenant
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">21</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Billing Address
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">2</TD>
<TD></TD>
    <TD align="left" valign="top">Outside Agreement Date
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">22</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Brokers
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">2</TD>
<TD></TD>
    <TD align="left" valign="top">Over-Allowance Amount
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top"><I>Exhibit</I></TD>
    <TD align="right" valign="top"><I>D</I></TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Building
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">1</TD>
<TD></TD>
    <TD align="left" valign="top">Parking Allotment
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>



<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Building Standard</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">3</TD>
<TD></TD>
    <TD align="left" valign="top">Parking Facilities</TD><TD>&nbsp;</TD>
<TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD nowrap align="center" valign="top">C-1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Building Structure
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">2</TD>
<TD></TD>
    <TD align="left" valign="top">Patron
</TD><TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD nowrap align="right" valign="top">C-1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Business Hours
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">2</TD>
<TD></TD>
    <TD align="left" valign="top">Permitted Transferee
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">16</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Claims
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">14</TD>
<TD></TD>
    <TD align="left" valign="top">Plans
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top"><I>Exhibit</I></TD>
    <TD align="right" valign="top"><I>D</I></TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Commencement Date
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">4</TD>
<TD></TD>
    <TD align="left" valign="top">Premises
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Common Areas
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">2</TD>
<TD></TD>
    <TD align="left" valign="top">Project
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Construction Allowance
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">2</TD>
<TD></TD>
    <TD align="left" valign="top">Quality Expenses
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">6</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Contractor
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top"><I>Exhibit</I>&nbsp;&nbsp;&nbsp;</TD>
<TD align="right" valign="top"><I>D</I></TD>
<TD></TD>
    <TD align="left" valign="top">Rent <i>Exhibit&nbsp;D</i>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">8</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Cost-Saving Expenses
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">6</TD>
<TD></TD>
    <TD align="left" valign="top">Repair Estimate
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">13</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">1</TD>
<TD></TD>
    <TD align="left" valign="top">Replacement Premises
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Default
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">18</TD>
<TD></TD>
    <TD align="left" valign="top">RSF
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Default Rate
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">19</TD>
<TD></TD>
    <TD align="left" valign="top">Scheduled Commencement Date
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Design Problem
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">11</TD>
<TD></TD>
    <TD align="left" valign="top">Scheduled Term
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Encumbrance
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">17</TD>
<TD></TD>
    <TD align="left" valign="top">Security Deposit
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Estimated Additional Rent
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">7</TD>
<TD></TD>
    <TD align="left" valign="top">Standard Services
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">9</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Expenses
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">5</TD>
<TD></TD>
    <TD align="left" valign="top">Substantial Completion
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top"><i>Exhibit</i></TD>
    <TD align="right" valign="top"><i>D</i></TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Expiration Date
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">4</TD>
<TD></TD>
    <TD align="left" valign="top">Successor Landlord
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Force Majeure
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">19</TD>
<TD></TD>
    <TD align="left" valign="top">Taking
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">15</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Hazardous Materials
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">9</TD>
<TD></TD>
    <TD align="left" valign="top">Taxes
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Holdover
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">4</TD>
<TD></TD>
    <TD align="left" valign="top">Telecommunication Services
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Holidays
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">2</TD>
<TD></TD>
    <TD align="left" valign="top">Tenant
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">HVAC
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">9</TD>
<TD></TD>
    <TD align="left" valign="top">Tenant Delays
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top"><I>Exhibit</I></TD>
    <TD align="right" valign="top"><I>D</I></TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Interest Notice
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">21</TD>
<TD></TD>
    <TD align="left" valign="top">Tenant&#146;s Personal Property
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Interruption Estimate
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">13</TD>
<TD></TD>
    <TD align="left" valign="top">Tenant&#146;s Share
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Land
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">2</TD>
<TD></TD>
    <TD align="left" valign="top">Tenant&#146;s Wiring
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Landlord
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">1</TD>
<TD></TD>
    <TD align="left" valign="top">Tenant&#146;s Acceptance
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">21</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Late Charge
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">8</TD>
<TD></TD>
    <TD align="left" valign="top">Term
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Lease
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">1</TD>
<TD></TD>
    <TD align="left" valign="top">Transfer
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">16</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Leasehold Improvements
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">3</TD>
<TD></TD>
    <TD align="left" valign="top">Untenantable
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">13</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Liability Limit
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">2</TD>
<TD></TD>
    <TD align="left" valign="top">Use
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Mandated Expenses
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">6</TD>
<TD></TD>
    <TD align="left" valign="top">Vehicles
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD nowrap align="center" valign="top">C-1</td>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Market Rent
</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">21</TD>
<TD></TD>
    <TD align="left" valign="top">Working Drawings
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top"><I>Exhibit</I></TD>
    <TD align="right" valign="top"><I>D</I></TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
<TD></TD>
<TD align="right" valign="top">&nbsp;</TD>
<TD></TD>
    <TD align="left" valign="top">Year
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->iii<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><FONT style="font-variant: SMALL-CAPS"><B>Lease</B></FONT>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Landlord and Tenant enter into this Lease (&#147;Lease&#148;) as of the<FONT style="font-variant: SMALL-CAPS"> </FONT>Date on the following
terms, covenants, conditions and provisions:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>BASIC LEASE PROVISIONS</B></TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="62%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>1.1</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Basic Lease Definitions.</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">In this Lease, the following defined terms have the meanings indicated.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(a)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">May&nbsp;5, 2008.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(b)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Landlord:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">BERNARDO REGENCY, LLC, a Delaware limited liability company.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(c)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Tenant:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">LIFEVANTAGE CORPORATION, a Colorado corporation.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(d)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Building:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">11545 W. Bernardo Court, San Diego, California, deemed to contain 48,055 RSF</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(e)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Premises:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Suites 301 and 302 deemed to contain 3,204 RSF (2,818 USF).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(f)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Use:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">General administrative
non-governmental office use consistent with that of a first-class office building.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(g)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Scheduled Term:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Five (5)&nbsp;years and Three (3)&nbsp;months.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(h)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Scheduled
Commencement Date:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">July&nbsp;1, 2008.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(i)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Base Rent:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The following amounts, payable in accordance with Article&nbsp;4:</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="19%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Period</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Monthly Rate</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Annual Base Rent</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Monthly Base Rent</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">Year 1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">2.45</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">94,197.60</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">7,849.80</TD>
    <TD nowrap valign="top">*</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">Year 2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">2.54</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">97,494.52</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">8,124.54</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">Year 3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">2.63</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">100,906.79</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">8,408.90</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">Year 4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">2.72</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">104,438.54</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">8,703.21</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">Year 5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">2.81</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">108,093.87</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">$</TD>
    <TD align="right" valign="top">9,007.82</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>subject to abatement as set forth in Section&nbsp;4.1, below.</TD>
</TR>

</TABLE>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="62%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(j)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Base Year;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The calendar year 2008.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Tenant&#146;s Share:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">6.67%</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(k)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Security Deposit:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$7,849.80</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(l)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Notice Address:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">For each party, the following addresses:</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>To Landlord</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>To Tenant</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bernardo Regency, LLC
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><u><B>Before the Commencement Date:</B></u></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">c/o CABI Developers
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Life Vantage Corporation</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">9911 W. Pico Boulevard, Suite&nbsp;1200
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">6400 S. Fiddler&#146;s Green Circle, Suite&nbsp;1970</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Los Angeles, California 90035
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Greenwood Village, CO 80111</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attn: V.P./Legal
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Attn: David Brown</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(858) 442-4924</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><u><B>After the Commencement Date:</B></u></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Life Vantage Corporation</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Attn: 11545 W. Bernardo Court, Suite&nbsp;301</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">San Diego, California 92127</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="62%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(m)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Billing Address:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">For each party, the following address:</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">

<TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>For Landlord</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>For Tenant</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bernardo Regency, LLC
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">LifeVantage Corporation</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">c/o CABI Developers
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Attn: 11545 W. Bernardo Court, Suite&nbsp;301</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">9911 W. Pico Boulevard, Suite&nbsp;1200
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">San Diego, California 92127</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Los Angeles, California 90035</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attn: V.P./Legal</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="62%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(n)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Brokers:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><div align="justify">CB Richard Ellis, Inc. (for Landlord); and
Corporate Real Estate Consultants (for
Tenant). Brokers will be paid by Landlord in
accordance with a separate agreement with
Landlord.</div></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(o)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Parking Allotment:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><div align="justify">Twelve (12)&nbsp;unreserved parking passes, for
the use and access to the Building&#146;s Parking
Facility subject to the terms set forth in
Exhibit&nbsp;C to this Lease.</div></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(p)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Liability Limit:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">$3&nbsp;million for any one accident or occurrence.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(q)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Construction Allowance:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><div align="justify">None; Landlord shall construct the
Improvements on a &#147;turn key&#148; basis in
accordance with the Work Letter attached to
this Lease as Exhibit&nbsp;E.</div></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(r)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Business Hours:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><div align="justify">From 8:00 a.m. to 6:00 p.m., Monday through
Friday, and from 9:00 a.m. to 1:00 p.m. on
Saturdays, except for the days observed for: excepting New Year&#146;s Day, Martin Luther King
Day, President&#146;s Day, Memorial Day,
Independence Day, Labor Day, Veteran&#146;s Day,
Thanksgiving and the day after Thanksgiving
and Christmas, and in Landlord&#146;s reasonable
discretion, any other holidays recognized by
landlords of comparable projects to the
Building (&#147;Holidays&#148;).</div></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>PROJECT</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.1 Project. </B>The Land, Building, Common Areas and Premises (as defined in &#167;1 and below) are
collectively referred to as the &#147;Project.&#148; As of the Date, the Project is named &#147;Bernardo Regency.&#148;
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.2 Land. </B>&#147;Land&#148; means the real property on which the Building and Common Areas are located,
including easements and other rights that benefit or encumber the real property. Landlord&#146;s
interest in the Land may be in fee or a leasehold. The Land may be expanded or reduced after the
Date.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.3 Base Building. </B>&#147;Base Building&#148; means the Building Structure and Mechanical Systems,
collectively, defined as follows:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Building Structure.</U> &#147;Building Structure&#148; means the structural
components in the Building, including foundations, floor and ceiling slabs, roofs,
exterior walls, exterior glass and mullions, columns, beams, shafts, and emergency
stairwells. The Building Structure excludes the Leasehold Improvements (and similar
improvements to other premises) and the Mechanical Systems.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Mechanical Systems</U>. &#147;Mechanical Systems&#148; means the mechanical,
electronic, physical or informational systems generally serving the Building or Common
Areas, including the sprinkler, plumbing, heating, ventilating, air conditioning,
lighting, communications, security, drainage, sewage, waste disposal, vertical
transportation, and fire/life safety systems.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.4 Common Areas. </B>Tenant will have a non-exclusive right to use the Common Areas subject to
the terms of this Lease. &#147;Common Areas&#148; means those interior and exterior common and public areas
on the Land (and appurtenant easements) and in the Building designated by Landlord for the
non-exclusive use by Tenant in common with Landlord, other tenants and occupants, and their
employees, agents and invitees. The Common Areas includes parking facilities serving the Building
that are owned or leased by Landlord.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.5 Premises. </B>Landlord leases to Tenant the Premises subject to the terms of this Lease. If
Landlord does not deliver possession of the Premises to Tenant on or before the estimated
Commencement Date (as set forth above), Landlord
</DIV>



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<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">shall not be subject to any liability for its failure to do so, and such failure shall not affect
the validity of this Lease nor the obligations of Tenant hereunder, provided that Tenant shall have
no obligation to commence paying Rent payments until the Commencement Date. Notwithstanding the
foregoing, if Landlord fails to deliver the Premises within one hundred eighty (180)&nbsp;days after the
Scheduled Commencement Date (accounting for Tenant Delays, if any and subject to extension for
Force Majeure), Tenant may elect to either (1)&nbsp;terminate this Lease and receive any amounts prepaid
by Tenant hereunder; or (ii)&nbsp;continue this Lease until the Premises are so delivered. Landlord and
Tenant hereby agree that the Premises shall be measured in accordance with BOMA ANSI Z65.1-1996
standards, as modified for the Project pursuant to Landlord&#146;s standard rentable measurements for
the Project, and in the event that Landlord&#146;s architect/space planner determines that the amounts
thereof shall be different from those set forth in this Lease, all amounts, percentages and figures
appearing or referred to in this Lease based upon such incorrect amount (including, without
limitation, the amount of the Base Rent and Tenant&#146;s Share shall be modified in accordance with
such determination. If such determination is made, it will be confirmed in writing by Landlord to
Tenant. Except as provided elsewhere in this Lease, by taking possession of the Premises, Tenant
accepts the Premises in its &#147;as is&#148; condition and with all faults, and the Premises is deemed in
good order, condition, and repair. The Premises includes the Leasehold Improvements and excludes
certain areas, facilities and systems, as follows:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Leasehold Improvements</U>. &#147;Leasehold Improvements&#148; means all
non-structural improvements in the Premises or exclusively serving the Premises, and
any structural improvements to the Building made to accommodate Tenant&#146;s particular use
of the Premises. The Leasehold Improvements may exist in the Premises as of the Date,
or be installed by Landlord or Tenant under this Lease at the cost of either party. The
Leasehold Improvements include: (1)&nbsp;interior walls and partitions (including those
surrounding structural columns entirely or partly within the Premises); (2)&nbsp;the
interior one-half of walls that separate the Premises from adjacent areas designated
for leasing; (3)&nbsp;the interior drywall on exterior structural walls, and walls that
separate the Premises from the Common Areas; (4)&nbsp;stairways and stairwells connecting
parts of the Premises on different floors, except those required for emergency exiting;
(5)&nbsp;the frames, casements, doors, windows and openings installed in or on the
improvements described in the foregoing clauses (1)&nbsp;through (4), or that provide
entry/exit to/from the Premises; (6)&nbsp;all hardware, fixtures, cabinetry, railings,
paneling, woodwork and finishes in the Premises or that are installed in or on the
improvements described in the foregoing clauses (1)&nbsp;through (5); (7)&nbsp;if any part of the
Premises is on the ground floor, the ground floor exterior windows (including mullions,
frames and glass); (8)&nbsp;integrated ceiling systems (including grid, panels and
lighting); (9)&nbsp;carpeting and other floor finishes; (10)&nbsp;kitchen, rest room, laboratory
or other similar facilities that exclusively serve the Premises (including plumbing
fixtures, toilets, sinks and built-in appliances); and (11)&nbsp;the sprinkler, plumbing,
heating, ventilating, air conditioning, electrical, metering, lighting, communications,
security, drainage, sewage, waste disposal, vertical transportation, fire/life safety,
and other mechanical, electronic, physical or informational systems that exclusively
serve the Premises, including the parts of each system that are connected to the
Mechanical Systems from the common point of distribution for each system to and
throughout the Premises (such items in this subsection (11)&nbsp;shall be referred to the
&#147;Systems&#148;).</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Exclusions from the Premises</U>. The Premises does not include: (1)&nbsp;any
areas above the finished ceiling or integrated ceiling systems, or below the finished
floor coverings that are not part of the Leasehold Improvements, (2)&nbsp;janitor&#146;s closets, (3)
stairways and stairwells to be used for emergency exiting or as Common Areas, (4)
rooms for Mechanical Systems or connection of telecommunication equipment, (5)&nbsp;vertical
transportation shafts, (6)&nbsp;vertical or horizontal shafts, risers, chases, flues or
ducts, and (7)&nbsp;any easements or rights to natural light, air or view.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.6 Building Standard. </B>&#147;Building Standard&#148; means the minimum or exclusive type, brand, quality
or quantity of materials Landlord designates for use in the Building from time to time.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.7 Tenant&#146;s Personal Property. </B>&#147;Tenant&#146;s Personal Property&#148; means those trade fixtures,
furnishings, equipment, work product, inventory, stock-in-trade and other personal property of
Tenant that are not permanently affixed to the Project in a way that they become a part of the
Project and will not, if removed, impair the value of the Leasehold Improvements that Tenant is
required to deliver to Landlord at the end of the Term under &#167;3.3.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.8 Rentable Area. </B>&#147;RSF&#148; means rentable square feet or rentable square foot, as the
case may be, as the same may be reasonably modified by Landlord in accordance with BOMA ANSI
Z65.1-1996 standards.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="justify" style="font-size: 10pt; margin-top: 12pt"><B>3. TERM</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.1
</B><B>Term</B><B>. </B>&#147;Term&#148; means the period that begins on the Commencement Date and ends on the
Expiration Date, subject to renewal, extension or earlier termination as may be further provided
in this Lease. &#147;Month&#148; means a full calendar month of the Term. &#147;Year&#148; means a full calendar year
in which all or a part of the Term occurs.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Commencement Date.</U> The<FONT style="font-variant: SMALL-CAPS"> </FONT>&#147;Commencement Date&#148; means the date that is the
earlier of:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The day that Tenant first conducts business in the Premises; or<BR></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The later of:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(A)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Scheduled Commencement Date, or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(B)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">The day that Landlord tenders the Premises to
Tenant with Landlord&#146;s Work substantially complete or that date that
Landlord would have tendered possession of the Premises but for delay
caused by Tenant.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Expiration Date.</U> &#147;Expiration Date&#148; means the date that is the Scheduled
Term (plus that many additional days required for the Expiration Date to be the last
day of a Month) after the later of:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Scheduled Commencement Date, or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Commencement Date.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Early Occupancy.</U> Tenant may not enter the Premises for any purpose
until Landlord tenders the Premises to Tenant. If Tenant conducts business in any part
of the Premises before the Scheduled Commencement Date, Tenant will pay Base Rent for
that period at the rate for the first Month that Base Rent is due, without discount or
excuse. Notwithstanding anything to the contrary provided herein, and provided that
Tenant and its agents do not interfere with Landlord&#146;s Contractor&#146;s work in the
Building and the Premises, Landlord shall allow Tenant access to the Premises ten (10)
days prior to the Substantial Completion of the Premises for the purpose of Tenant
installing overstandard equipment or fixtures (including Tenant&#146;s data and telephone
equipment) in the Premises. Prior to Tenant&#146;s entry into the Premises as permitted by
the terms of this Section, Tenant shall submit a schedule to Landlord and Contractor,
for their approval, which schedule shall detail the timing and purpose of Tenant&#146;s
entry. Tenant shall hold Landlord harmless from and indemnify, protect and defend
Landlord against any loss or damage to the Building or Premises and against injury to
any persons caused by Tenant&#146;s actions pursuant to this Section.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Late Occupancy.</U> If Landlord fails to tender possession of the Premises
to Tenant by the Scheduled Commencement Date due to delay caused by Tenant or Force
Majeure, Landlord will not be in default of this Lease.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Confirmation of Term.</U> If applicable, Landlord shall notify Tenant of
the Commencement Date using a Notice of Lease Term (&#147;NLT&#148;) in the form attached to this
Lease as Exhibit&nbsp;D. Tenant shall execute and deliver to Landlord the NLT within 10
business days after its receipt, but Tenant&#146;s failure to do so will not reduce Tenant&#146;s
obligations or Landlord&#146;s rights under this Lease.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.2
Holdover.</B> If Tenant keeps possession of the Premises after the
Expiration Date (or earlier termination of this
Lease) without Landlord&#146;s prior written consent (a &#147;Holdover&#148;), which may be withheld in its
sole discretion, then in addition to the remedies available elsewhere under this Lease or by
law, Tenant will be a tenant-at-sufferance and must comply with all of Tenant&#146;s obligations
under this Lease (including the payment of Additional Rent), except that for each Month of
Holdover Tenant will pay 150% of the Base Rent payable for the last Month of the Term (or
that would have been payable but for abatement or excuse), without prorating for any partial
Month of Holdover, plus Additional Rent for such period. Tenant shall indemnify and defend
Landlord from and against all claims and damages, both consequential and direct, that
Landlord suffers due to Tenant&#146;s failure to return possession of the Premises to Landlord at
the end of the Term. Landlord&#146;s deposit of Tenant&#146;s Holdover payment will not constitute
Landlord&#146;s consent to a Holdover, or create or renew any tenancy.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.3 Condition on Expiration.</B>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Return of the Premises.</U> At the end of the Term, Tenant will return
possession of the Premises to Landlord vacant, free of Tenant&#146;s Personal Property, in
broom-clean condition, and with all Leasehold Improvements in good working order and
repair (excepting ordinary wear and tear), except that Landlord may require</div></TD>
</TR>

</TABLE>
</DIV>


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</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Tenant, by notice at least 10&nbsp;days before the expiration of the Term, to remove (and
restore the Premises damaged by removal):</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">All Tenant&#146;s Wiring; and</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Any item of Leasehold Improvements (not part of the original
Leasehold Improvements made by Landlord as outlined in the Work Letter or the
Systems) or Alterations (other than Tenant&#146;s Wiring) if either:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(A)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">When Landlord consented to the
installation of the improvement, Landlord reserved Landlord&#146;s right
to have Tenant remove the improvement at the end of the Term; or</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(B)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Tenant failed to obtain Landlord&#146;s
written consent under &#167; 8.1 (a)&nbsp;for an item of Alterations to
become part of the Premises.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Correction by Landlord</U>. If Tenant fails to return possession of the
Premises to Landlord in the condition required under (a), then Tenant shall reimburse
Landlord for the costs incurred by Landlord to put the Premises in the condition
required under (a), plus Landlord&#146;s standard administration fee.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Abandoned Property</U>. Tenant&#146;s Personal Property left behind in the
Premises after the end of the Term will be considered abandoned and Landlord may move,
store, retain or dispose of these items at Tenant&#146;s cost, including Landlord&#146;s standard
administration fee.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="justify"><B>4.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><B>RENT</B></div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.1 Base Rent. </B>Tenant shall prepay one Month&#146;s installment of Base Rent by the Date, to be
applied against Base Rent first due under this Lease. During the Term, Tenant shall pay all other
Base Rent in advance, in equal Monthly installments, on the
1<SUP style="font-size: 85%; vertical-align: text-top">st</SUP> of each Month. Base Rent
for any partial Month will be prorated based on a 30-day month. Notwithstanding anything to the
contrary contained in the Lease, and provided that Tenant faithfully performs all of the terms and
conditions of the Lease, Landlord hereby agrees to abate Tenant&#146;s obligation to pay Monthly Base
Rent for the second (2<SUP style="font-size: 85%; vertical-align: text-top">nd</SUP>), third (3<SUP style="font-size: 85%; vertical-align: text-top">rd</SUP>) and fourth (4<SUP style="font-size: 85%; vertical-align: text-top">th</SUP>) full
months of the Term. During such abatement period, Tenant shall still be responsible for the payment
of all of its other monetary obligations under the Lease.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.2 Additional Rent. </B>Tenant&#146;s obligation to pay Taxes and Expenses under this &#167;4.2 is
referred to in this Lease as &#147;Direct Costs.&#148;
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Taxes</U>. For each full or partial Year Tenant shall pay as in the manner
described below the Tenant&#146;s Share of the Taxes for such Year in
excess of the Taxes for
the Base Year. &#147;Taxes&#148; means the total costs incurred by Landlord for: (1)&nbsp;real and
personal property taxes and assessments (including ad valorem and special assessments)
levied on the Project and Landlord&#146;s personal property used in connection with the
Project; (2)&nbsp;taxes on rents or other income derived from the Building; (3)&nbsp;capital and
place-of-business taxes; (4)&nbsp;taxes, assessments or fees in lieu of the taxes described
in the foregoing clauses (1)&nbsp;through (3); and (5)&nbsp;the reasonable costs incurred to
reduce the taxes described in the foregoing clauses (1)&nbsp;through (4). Taxes excludes net
income taxes and taxes paid under &#167;4.3.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Expenses</U>. For each full or partial Year, Tenant shall pay in the manner
described below the Tenant&#146;s Share of the Expenses for such Year in excess of the
Expenses for the Base Year. &#147;Expenses&#148; means the total costs incurred by Landlord to
operate, manage, administer, equip, secure, protect, repair, replace, refurbish, clean,
maintain, decorate and inspect the Project, including a fee to manage the Project not
to exceed 5% of the gross revenue of the Project. Expenses that vary with occupancy will
be calculated as if the Building is 95% occupied and operating and all such services
are provided to all tenants.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Expenses include:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(A)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Standard Services provided under &#167;6.1 (excluding
electrical service pursuant to Section&nbsp;6.3);</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(B)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Repairs and maintenance performed under &#167;7.2;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(C)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Insurance maintained under &#167;9.2 (including deductibles paid);</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="justify">(D)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Wages, salaries and benefits of personnel to the extent they render
services to the Project;</div></TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
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<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(E)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Costs of operating the Project management office (including reasonable rent);</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(F)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Amortization installments of costs required to be capitalized and incurred:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="14%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">To comply with insurance requirements or laws (&#147;Mandated
Expenses&#148;);</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="14%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">That are reasonably calculated to
reduce other Expenses or the rate of increase in other Expenses
(&#147;Cost-Saving Expenses&#148;); or</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="14%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">That are reasonably calculated to improve or maintain the
safety, health or access of Project occupants, and otherwise maintain the
quality, appearance, or integrity of the Project (&#147;Quality Expenses&#148;).</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Expenses exclude:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(A)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Taxes;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(B)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Mortgage payments (principal and interest), and ground lease rent;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(C)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Commissions, advertising costs, attorney&#146;s fees and costs of
improvements in connection with leasing space in the Building;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(D)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Costs reimbursed by insurance proceeds or tenants of the Building (other
than as Direct
Costs);</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(E)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Depreciation;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(F)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Except for the costs identified in &#167;4.2(b)(1)(F), costs
required to be capitalized according to sound real estate accounting and
management principles, consistently applied;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(G)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Collection costs and legal fees paid in disputes with tenants; and</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(H)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Costs to maintain and operate the entity that is
Landlord (as opposed to operation and maintenance of the Project).</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(I)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Costs incurred by Landlord due to the violation by
Landlord of the terms and conditions of any lease of space in the Project or
any law, code, regulation, ordinance or the like;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(J)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Landlord&#146;s general corporate overhead and general and administrative
expenses; and</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(K)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Costs incurred to (i)&nbsp;comply with laws relating to the
removal of any Hazardous Material, unless caused by Tenant or any Tenant
Parties, and (ii)&nbsp;to remove, remedy, contain, or treat any Hazardous Material,
which Hazardous Material is brought onto the Project after the date hereof by
Landlord or any other tenant of the Project or any other person.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Amortization and Accounting Principles.</U></div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Each item of Mandated Expenses and Quality Expenses will be fully amortized in
equal annual installments, with interest on the principal balance at Amortization Rate,
over the number of years, not to exceed 10, that Landlord projects the item of Expenses
will be productive for its intended use, without replacement, but properly repaired and
maintained.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Each item of Cost-Saving Expenses will be fully amortized in equal annual
installments, with interest on the principal balance at the Amortization Rate, over
the number of years that Landlord reasonably estimates for the present value of the
projected savings in Expenses (discounted at the Amortization Rate<I>) </I>to equal the cost.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Any item of Expenses of significant cost that is not required to be capitalized
but is unexpected or does not typically recur may, in Landlord&#146;s discretion, be
amortized in equal annual installments, with interest on the principal balance at the
Amortization Rate, over a number of years determined by Landlord.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">&#147;Amortization Rate&#148; means the prime rate of Citibank, N.A. (or a comparable
financial institution selected by Landlord), plus 3%.</div></TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>




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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Landlord may allocate Direct Costs for the Project to various components of
the Project on an equitable basis.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(6)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Subject to the specific provisions of this Article&nbsp;4, Landlord will use<FONT style="font-variant: SMALL-CAPS">
</FONT>sound real estate accounting and management principles, consistently applied, to
determine Direct Costs.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Estimates</U>. Landlord will provide to Tenant a reasonably detailed itemization of
estimated Direct Costs for each Year. During the Term, if for any Year, Tenant&#146;s Share exceeds
Tenant Share for the Base Year, Tenant will pay an amount equal to the excess (&#147;Excess&#148;), in
equal Monthly installments, on the first day of each Month. If Landlord has not provided
Tenant with Landlord&#146;s estimate of Direct Costs for a Year, then Tenant will pay the estimated
Excess until the estimate is revised by Landlord. Landlord may reasonably revise its estimate
of Direct Costs for a Year and after receipt of the revised estimate,
Tenant will pay the
monthly installments of Excess based on the revised estimate for the remainder of the Year or
until the estimate is later revised by Landlord. The aggregate estimates of Direct Costs paid
by Tenant in a Year is the &#147;Estimated Direct Costs.&#148;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Settlement</U>. As soon as practicable after the end of each Year, Landlord will give
Tenant a statement of the actual Direct Costs for the Year, and which shall indicate the
amount, if any, of the Excess. Direct Costs for any partial Year will be prorated based on a
365-day calendar year. The statement of Direct Costs is conclusive, binds Tenant, and Tenant
waives all rights to contest the statement, except for items of Direct Costs to which Tenant
objects by notice to Landlord given within 90&nbsp;days after receipt of Landlord&#146;s statement;
however, Tenant&#146;s objection will not relieve Tenant from its obligation to pay Direct Costs
pending resolution of any objection. If the Direct Costs exceed the Estimated Direct Costs for
the Year, then Tenant shall pay any underpayment in Excess to Landlord in a lump sum as Rent
within 30&nbsp;days after receipt of Landlord&#146;s statement of Direct Costs. If the Estimated Direct
Costs exceeds the Direct Costs for the Year, then Landlord shall credit any overpayment in
Excess against Rent next due. However, if the Term ends during a Year, then Landlord may, in
Landlord&#146;s sole discretion, elect either of the following:
(1)&nbsp;to forego the settlement of Excess Direct Costs for the Year that is otherwise required
and accept the payments of estimated Excess for the final Year in satisfaction of Tenant&#146;s
obligations to pay Excess for the final Year, or (2)&nbsp;to have Landlord&#146;s and Tenant&#146;s
obligations under this &#167;4.2(e) survive the end of the Term.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Audit</U>. Tenant shall have the right to review and/or audit Landlord&#146;s books and
records regarding Tenant&#146;s Share of Operating Costs at Landlord&#146;s offices during normal
business hours on ten (10)&nbsp;business days&#146; prior notice (&#147;Review Notice&#148;) for a period of
ninety (90)&nbsp;days following Tenant&#146;s receipt of the Annual Statement (the &#147;Review Period&#148;).
Within a reasonable time after receipt of Tenant&#146;s review/audit notice, Landlord shall make
all pertinent records available for inspection that are reasonably necessary for Tenant to
conduct its review. If any records are maintained at a location other than the office of the
Project, Tenant may either inspect the records at such other location or pay for the
reasonable cost of copying and shipping the records. Any audit shall
be conducted by a
reputable firm of certified public accountants (&#147;Tenant&#146;s
CPA&#148;) which, along with Tenant,
agrees to be bound by a confidentiality agreement, on a noncontingent fee basis. Tenant shall
have no right to contest, review or audit such statement if a Default has occurred and is
continuing, or if Tenant fails to give such written notice during the Review Period. Within
ninety (90)&nbsp;days after the records are made available to Tenant, Tenant shall have the right
to give Landlord written notice (an &#147;Objection Notice&#148;) stating in reasonable detail any
objection to the books and records that Tenant has reviewed. If Tenant fails to give Landlord
an Objection Notice within the 90-day period or fails to provide Landlord with a Review Notice
within the 90-day period described above, Tenant shall be deemed to have approved Landlord&#146;s
statement of Operating Costs for such year and shall be barred from raising any claims
regarding the Operating Costs for that year. Landlord may elect to contest the conclusion of
Tenant&#146;s auditor in the Objection Notice by giving a written contest notice (the &#147;Contest
Notice&#148;) to Tenant within sixty (60)&nbsp;days after receipt of the Objection Notice, such Contest
Notice containing the name of a firm of certified public accountants appointed by Landlord
(&#147;Landlord&#146;s CPA&#148;). Landlord&#146;s CPA and Tenant&#146;s CPA shall meet and confer within forty-five
(45)&nbsp;days after the Contest Notice is given in an attempt to agree on any disputed items. If
Landlord&#146;s CPA and Tenant&#146;s CPA are unable to agree on all disputed items within forty-five
(45)&nbsp;days after the Contest Notice, then each of Landlord&#146;s CPA and Tenant&#146;s CPA shall propose
and deliver to each other in writing an amount to be paid by Tenant to Landlord or Landlord to
Tenant relating to the Operating Costs being audited. Tenant&#146;s CPA and Landlord&#146;s CPA shall
agree on a third CPA experienced in real estate accounting
unaffiliated with</div></TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Landlord, Tenant and their respective CPA&#146;s and who has not worked for Landlord,
Tenant or their respective CPA&#146;s in the last ten (10)&nbsp;years. Such third CPA (the
&#147;Deciding CPA&#148;) shall meet for one day or less with Landlord&#146;s CPA and Tenant&#146;s CAP
within fifteen (15)&nbsp;business days after the appointment of such Deciding CPA, and at
the end of such meeting the Deciding CPA shall choose in writing either Tenant&#146;s
CPA&#146;s proposal or Landlord&#146;s CPA&#146;s proposal, and such decision shall be final,
binding and nonappealable. If Landlord and Tenant determine that Operating Costs for
the calendar year are less than reported, Landlord shall provide Tenant with a credit
against the next installment of Rental in the amount of the overpayment by Tenant.
Likewise, if Landlord and Tenant determine that Operating Costs for
the calendar year
are greater than reported, Tenant shall pay Landlord the amount of any underpayment
within thirty (30)&nbsp;days. Landlord shall pay for Landlord&#146;s CPA, Tenant shall pay for
Tenant&#146;s CPA and the cost of the Deciding CPA shall be divided equally among the
parties. No books and records may be removed from Landlord&#146;s office. Notwithstanding
the foregoing, if it is determined that Operating Costs reflected in the Annual
Statement have been overstated by five percent (5%) or more, than Landlord shall pay
for the reasonable cost of Tenant&#146;s CPA and the Deciding
CPA.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.3 Other Taxes.</B> Upon demand, Tenant will reimburse Landlord for taxes paid by Landlord
on (a)&nbsp;Tenant&#146;s Personal Property, (b)&nbsp;Rent, (c)&nbsp;Tenant&#146;s occupancy of the Premises, or (d)&nbsp;this
Lease. If Tenant cannot lawfully reimburse Landlord for these taxes, then the Base Rent will be
increased to yield to Landlord the same amount after these taxes were imposed as Landlord would
have received before these taxes were imposed.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.4 Terms of Payment. </B>&#147;Rent&#148; means all amounts payable by Tenant under this Lease and the
exhibits, including Base Rent and Additional Rent. If a time for payment of an item of Rent is not
specified in this Lease, then Tenant will pay Rent within 30&nbsp;days after receipt of Landlord&#146;s
statement or invoice. Unless otherwise provided in this Lease, Tenant shall pay Rent without
notice, demand, deduction, abatement or setoff, in lawful U.S. currency, at Landlord&#146;s Billing
Address. Landlord will send invoices payable by Tenant to Tenant&#146;s Billing Address; however,
neither Landlord&#146;s failure to send an invoice nor Tenant&#146;s failure to receive an invoice for Base
Rent (and installments of Estimated Direct Costs) will relieve Tenant of its obligation to timely
pay Base Rent (and installments of Estimated Direct Costs). Any partial payment of Rent by Tenant
will be considered a payment on account. No endorsement or statement on any Rent check or any letter
accompanying Rent will be deemed an accord and satisfaction, affect Landlord&#146;s right to collect the
full Rent due, or require Landlord to apply any payment to any Rent other than Rent earliest due.
No payment by Tenant to Landlord will be deemed to extend the Term or render any notice, pending
suit or judgement ineffective. By notice to the other, each
party may change its Billing Address.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.5 Late Payment. </B>If Landlord does not receive all or part of any item of Rent when due, then
Tenant shall pay Landlord 5% of the overdue Rent (&#147;Late
Charge&#148;) as Additional Rent. Tenant agrees
that the Late Charge is not a penalty, and will compensate Landlord for costs not contemplated
under this Lease that are impracticable or extremely difficult to fix. Landlord&#146;s acceptance of a
Late Charge does not waive Tenant&#146;s default.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>5. USE &#038; OCCUPANCY</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.1 Use.</B> Tenant shall use and occupy the Premises only for the Use. Landlord does not
represent or warrant that the Project is suitable for the conduct of
Tenant&#146;s particular business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.2 Compliance with Laws and Directives.</B>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Tenant&#146;s Compliance</U>. Subject to the remaining terms of this
Lease, Tenant shall comply at Tenant&#146;s expense with all laws and directives of
Landlord&#146;s insurers concerning:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Leasehold Improvements and Alterations,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Tenant&#146;s use or occupancy of the Premises,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Tenant&#146;s employer/employee obligations,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A condition created by Tenant, its Affiliates or their contractors or invitees,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Tenant&#146;s failure to comply with this Lease,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(6)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The negligence of Tenant or its Affiliates or contractors, or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(7)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Any chemical wastes, contaminants, pollutants or substances
that are hazardous, toxic, infectious, flammable or dangerous, or regulated by any
local, state or federal statute, rule, regulation or</div></TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>




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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="justify" style="font-size: 10pt; margin-top: 6pt; margin-left: 10%">ordinance for the protection of health or the environment (&#147;Hazardous
Materials&#148;) that are introduced to the Project, handled or disposed by
Tenant or its Affiliates, or any of their contractors.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Notwithstanding the foregoing, nothing in this Paragraph&nbsp;5.2(a) shall require Tenant
to bear any expenses for any structural changes, modifications or Alterations to the
Premises or the Project or any changes to the Systems unless such changes are
necessitated by Tenant&#146;s particular use of, or improvement to, the Premises or the
Project.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Landlord&#146;s Compliance.</U> The cost of Landlord&#146;s compliance with laws
or directives of Landlord&#146;s insurers concerning the Project, other than those that
are Tenant&#146;s obligation under subsection (a), will be included in Expenses to the
extent allowed under &#167;4.2.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.3 Occupancy. </B>Tenant shall not interfere with Building services or other tenants&#146;
rights to quietly enjoy their respective premises or the Common Areas. Tenant shall not make or
continue a nuisance, including any objectionable odor, noise, fire hazard, vibration, or wireless
or electromagnetic transmission. Tenant will not maintain any Leasehold Improvements or use the
Premises in a way that increases the cost of insurance required under &#167;9.2, or requires insurance
in addition to the coverage required under &#167;9.2.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.4 OFAC Certification. </B>Tenant represents that: (a)&nbsp;Tenant is not now and has never
been listed or named as a Blocked Person, or (b)&nbsp;Tenant is not now and has never been acting
directly or indirectly for, or on behalf of, any Blocked Person. &#147;Blocked Person&#148; means any person,
group, entity or nation designated by the United States Treasury Department as a terrorist or a
&#147;Specially Designated National and Blocked Person,&#148; or that is a banned or blocked person, entity,
nation under any law, order, rule or regulation that is enforced or administered by the Office of
Foreign Assets Control.
</DIV>

<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>6.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>SERVICES &#038; UTILITIES</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>6.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Standard Services.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U>Standard Services Defined.</U> &#147;Standard Services&#148; means:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Heating, ventilation and air-conditioning (&#147;HVAC&#148;) during
Business Hours as reasonably required to comfortably use and occupy the Premises
and interior Common Areas;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Tempered water from the public utility for use in Common Areas
rest rooms, and water from the public utility for use in customary kitchen
facilities located in the Premises;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Janitorial services to the Premises and interior Common Areas 5
days a week, except Holidays, and pest control services in the Common Areas as
needed to keep the Common Areas free from infestation;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Access to the Premises (by at least 1 passenger elevator if not on the ground
floor);</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Labor to replace fluorescent tubes and ballasts in Building Standard light
fixtures in the Premises;<BR>
</div></TD>
</TR>
<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(6)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Access control services; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(7)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Electricity from Landlord&#146;s selected provider(s) for Common Areas lighting;</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Standard Services Provided</U>. During the Term, Landlord shall provide the
Standard Services to Tenant. The cost of the Standard Services is included in Expenses.
Landlord is not responsible for any inability to provide Standard Services due to
either the concentration of personnel or equipment in the Premises; or Tenant&#146;s use of
equipment in the Premises that is not customary office equipment or has special cooling
requirements.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.2 Additional Services. </B>Landlord will provide utilities and services in excess of
the Standard Services subject to the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>HVAC.</U> If Tenant requests HVAC service to the Premises during non-Business
Hours, Tenant will pay as Rent Landlord&#146;s scheduled rate for this service.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Lighting</U>. Landlord will furnish Building Standard lamps, bulbs, ballasts
and starters that are part of the Leasehold Improvements at no cost to Tenant (but shall
be included in Direct Costs), and non Building standard lamps, bulbs, ballasts and
starters that are part of the Leasehold Improvements for purchase by</div></TD>
</TR>



</TABLE>
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Tenant at Landlord&#146;s cost, plus Landlord&#146;s standard administration fee. Landlord
will install non-Building Standard items at Landlord&#146;s scheduled rate for this
service.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Other Utilities and Services.</U> Tenant will pay as Rent the actual cost
of utilities or services (other than HVAC and lighting addressed in (a)&nbsp;and (b), and
subject to Section&nbsp;6.3 below) either used by Tenant or provided at Tenant&#146;s request in
excess of that provided as part of the Standard Services, plus Landlord&#146;s standard
administration fee. Tenant&#146;s excess consumption may be estimated by Landlord unless
either Landlord requires or Tenant elects to install Building Standard meters to
measure Tenant&#146;s consumption.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Additional Systems and Metering.</U> Landlord may require Tenant, at
Tenant&#146;s expense, to upgrade or modify existing Mechanical Systems serving the
Premises or the Leasehold Improvements to the extent necessary to meet Tenant&#146;s excess
requirements (including installation of Building Standard meters to measure the same).</div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.3 Separate Metering and Electrical Billing. </B>Notwithstanding anything to the contrary
in this Article&nbsp;6, Tenant shall contract directly with San Diego Gas and Electric Company
(&#147;Electric Provider&#148;) for all electrical power and services in the Premises. Such services shall
not be included in Landlord&#146;s Standard Services. Tenant&#146;s total consumption of electricity in the
Premises, including lighting and convenience outlets, shall be separately metered and Tenant shall
be solely responsible for the costs thereof. Landlord shall be responsible for (as part of Direct
Costs) the installation of any meters in, on or about the Premises. Tenant shall pay all costs
associated with electrical consumption directly to the Electric Provider or pay as Rent the actual
cost of Tenant&#146;s electricity consumption, plus Landlord&#146;s standard administrative fee, at
Landlord&#146;s election. Notwithstanding the foregoing, the total connected load shall not exceed 4
watts per RSF of the Premises.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.4 Telecommunication Services. </B>Tenant will contract directly with third party providers
and will be solely responsible for paying for all telephone, data transmission, video and other
telecommunication services (&#147;Telecommunication Services&#148;) subject to the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Providers</U>. Each Telecommunication Services provider that does not
already provide service to the Building shall be subject to Landlord&#146;s approval, which
Landlord may withhold in Landlord&#146;s sole discretion. Without
liability to Tenant, the
license of any Telecommunication Services provider servicing the Building may be
terminated under the terms of the license, or not renewed upon the expiration of the
license.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Tenant&#146;s Wiring.</U> Landlord may, in its sole discretion, designate the
location of all wires, cables, fibers, equipment, and connections
(&#147;Tenant&#146;s Wiring&#148;)
for Tenant&#146;s Telecommunication Services, restrict and control access to telephone
cabinets and rooms. Tenant may not use or access the Base Building, Common Areas or
roof for Tenant&#146;s Wiring without Landlord&#146;s prior written consent, which Landlord may
withhold in Landlord&#146;s sole discretion. Tenant&#146;s Wiring will be subject to removal in
accordance with &#167;3.3.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>No Beneficiaries</U>. This &#167;6.4 is solely for
Tenant&#146;s benefit, and no one
else shall be considered a beneficiary of these provisions.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.5 Special Circumstances. </B>Without breaching this Lease or creating any liability on
the part of Landlord, Landlord may interrupt, limit or discontinue any utility or services Landlord
provides under this Article&nbsp;6 under any of the following circumstances: (a)&nbsp;without notice, in an
emergency; (b)&nbsp;with reasonable notice, to comply with laws or to conform to voluntary government or
industry guidelines; (c)&nbsp;with reasonable notice, to repair and maintain the Project under &#167;7.2
(including scheduled annual Building-wide shutdowns); or (d)&nbsp;with reasonable notice, to modify,
renovate or improve the Project under &#167;8.2. Notwithstanding the foregoing, in the event that Tenant
is prevented from using, and does not use, the Premises or any portion thereof, as a result of (i)
any repair, maintenance or alteration to the Common Areas, the Premises or other portions of the
Project required to performed by Landlord under this Lease (unless the same is required due to the
negligence or willful misconduct of Tenant or any of Tenant&#146;s employees), (ii)&nbsp;the unavailability
of any utility to the Premises where such unavailability is principally due to the gross negligence
or willful misconduct of Landlord or Landlord&#146;s employees, or (iii)&nbsp;the presence of Hazardous
Materials on or about the Project not caused by the acts or omissions of Tenant or Tenant&#146;s
employees (any such set of circumstances as set forth in items (i), through (iii), above, to be
known as an &#147;Abatement Event&#148;), then Tenant shall give Landlord prompt notice of such Abatement
Event, and if such Abatement Event continues for five (5)&nbsp;consecutive days after the commencement
of such Abatement Event or the same Abatement Event occurs ten (10)&nbsp;or more nonconsecutive days in
any twelve month period (the &#147;Eligibility Period&#148;), then the Base Rent, recurrent Additional Rent
and parking charges shall be abated or reduced, as the case may be, beginning on the date of such
Abatement Event and continuing for such time that Tenant continues to be so prevented from using,
and does not use, the Premises, or a portion thereof, in the proportion that the rentable area of
the portion of the Premises that Tenant is prevented
</DIV>


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</DIV>




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<DIV style="font-family: 'Times New Roman',Times,serif">

<div align="justify" style="font-size: 10pt; margin-top: 6pt">from using, and does not use (&#147;Unusable Area&#148;), bears to the total rentable area of the Premises;
provided, however, in the event that Tenant is prevented from using, and does not use, the
Unusable Area for a period of time in excess of the Eligibility Period and the remaining portion
of the Premises is not sufficient to allow Tenant to effectively conduct its business therein, and
if Tenant does not conduct its business from such remaining portion,
then for such time after
expiration of the Eligibility Period during which Tenant is so prevented from effectively
conducting its business therein, the Base Rent and recurrent
Additional Rent for the entire
Premises shall be abated for such time as Tenant continues to be so prevented from using, and does
not use, the Premises. If, however, Tenant reoccupies any portion of
the Premises during such
period, the Rent allocable to such reoccupied portion, based on the proportion that the rentable area
of such reoccupied portion of the Premises bears to the total rentable area of the Premises, shall
be payable by Tenant from the date Tenant reoccupies such portion of the Premises. Such right to
abate Base Rent, the recurrent Additional Rent and parking charges shall be Tenant&#146;s sole and
exclusive remedy at law or in equity for an Abatement Event.
</DIV>


<div align="justify" style="font-size: 10pt; margin-top: 12pt"><B>7. REPAIRS</B>
</DIV>


<div align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.1 Tenant&#146;s Repairs. </B>Except as provided in Articles 10 and 12, during the Term Tenant shall,
at Tenant&#146;s cost, repair, maintain and replace, if necessary, the Leasehold Improvements (other than
the Systems) and keep the Premises in good order, condition and repair, ordinary wear and tear
excepted. Tenant&#146;s work under this &#167;7.1 must be
(a)&nbsp;approved by Landlord before commencement, (b) supervised by Landlord at Tenant&#146;s cost, if Landlord so reasonably requires, (c)&nbsp;performed in
compliance with laws and Building rules and regulations, and (d)&nbsp;performed lien free and in a
first-class manner with materials of at least Building Standard.
</DIV>

<div align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.2 Landlord&#146;s Repairs. </B>Except as provided in Articles 10 and 12, during the Term Landlord
shall repair, maintain and replace, if necessary, all parts of the Project that are not Tenant&#146;s
responsibility under &#167;7.1, or any other tenant&#146;s responsibility under their respective lease, and
otherwise keep the Project in good order and condition according to the standards prevailing for
comparable office buildings in the area in which the Building is
located. Except in an emergency, Landlord will use commercially reasonable efforts to avoid disrupting the Use of the Premises in
performing Landlord&#146;s duties under this &#167;7.2; however, Landlord will not be required to employ
premium labor to perform any of Landlord&#146;s duties under this &#167;7.2. Tenant may not repair or
maintain the Project on Landlord&#146;s behalf or offset any Rent for any repair or maintenance of the
Project that is undertaken by Tenant.
</DIV>

<div align="justify" style="font-size: 10pt; margin-top: 12pt"><B>8. ALTERATIONS</B>
</DIV>


<div align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.1 Alterations by Tenant. </B>&#147;Alterations&#148; means any modifications, additions or improvements
to the Premises or Leasehold Improvements made by Tenant during the Term, including modifications
to the Base Building or Common Areas required by law as a condition of performing the work.
Alterations do not include work performed under a Work Letter that is part of this Lease.
Alterations are made at Tenant&#146;s sole cost and expense, subject
to the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Consent Required.</U> All Alterations to excess of $1,500 require Landlord&#146;s prior
written consent. If a Design Problem exists, Landlord may withhold its consent in Landlord&#146;s
sole discretion; otherwise, Landlord will not unreasonably withhold
its consent. Unless Tenant
obtains Landlord&#146;s prior written consent to the Alterations becoming part of the Premises to
be tendered to Landlord on termination of the Lease, Landlord may require Tenant to remove
Alterations and restore the Premises under &#167;3.3 upon termination of this Lease.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Design Problem Defined.</U> &#147;Design Problem&#148; means a condition
that results, or will result, from work proposed, being performed or
that has been completed that either:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Does not comply with laws;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Does not meet or exceed the Building Standard;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Exceeds the capacity, adversely affects, is incompatible with,
or impairs Landlord&#146;s ability to maintain, operate, alter, modify or improve
the Base Building;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Affects the exterior appearance of the Building or Common Areas;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Violates any agreement affecting the Project;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(6)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Costs more to demolish than Building Standard improvements;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(7)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Violates any insurance regulations or standards for a fire-resistive office
building;</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->11<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(8)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Locates any equipment, Tenant&#146;s Wiring or Tenant&#146;s Personal Property on the
roof of the Building, in Common Areas or in telecommunication or electrical
closets, except for connections of Tenant&#146;s Wiring to service provided by
Telecommunications Services providers; or</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(9)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Cases a &#147;work of visual art&#148; (as defined in the Visual
Artists Rights Act of 1990) to be incorporated into or made a part of
the Building.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Performance of Alterations.</U> Alterations shall be performed by Tenant
in a good and workman-like manner according to plans and specifications approved by
Landlord. All Alterations shall comply with law and insurance requirements. Landlord&#146;s
designated contractors must perform Alterations affecting the Base Building or
Mechanical Systems; and, all other work will be performed by qualified contractors that
meet Landlord&#146;s insurance requirements and are otherwise approved by Landlord. Promptly
after completing Alterations, Tenant will deliver to Landlord &#147;as-built&#148; CADD plans,
proof of payment, a copy of the recorded notice of completion, and all unconditional
lien releases.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Bonding</U>. If requested by Landlord, before commencing Alterations Tenant
shall at Tenant&#146;s cost obtain bonds, or deposit with Landlord other security acceptable
to Landlord for the payment and completion of the Alterations. These bonds or other
security shall be in form and amount acceptable to Landlord.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Alterations Fee</U>. Tenant shall pay Landlord as Rent 5% of
the total construction costs of the Alterations to cover review of Tenant&#146;s plans and
construction coordination by Landlord&#146;s employees. In addition, Tenant shall reimburse
Landlord for the actual cost that Landlord reasonably incurs to have engineers,
architects or other professional consultants review Tenant&#146;s plans and work in
progress, or inspect the completed Alterations.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.2 Alterations by Landlord</B>. Landlord may modify, renovate or improve the Project as
Landlord deems appropriate, provided Landlord uses commercially reasonable efforts to avoid
disrupting Tenant&#146;s business and shall not materially impair Tenant&#146;s access to the Premises
or the Project.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.3 Liens and Disputes. </B>Tenant will keep title to the Land and Building free of any
liens concerning the Leasehold Improvements, Alterations, or Tenant&#146;s Personal Property, and will
promptly take whatever action is required to have any of these liens released and removed of record
(including, as necessary, posting a bond or other deposit). To the extent legally permitted, each
contract and subcontract for Alterations will provide that no lien attaches to or may be claimed
against the Project. Tenant will indemnify Landlord for costs that Landlord reasonably incurs
because of Tenant&#146;s violation of this &#167;8.3.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>9. INSURANCE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>9.1 Tenant&#146;s Insurance.</B>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Tenant&#146;s Coverage.</U> Before taking possession of
the Premises for any purpose (including construction of
Tenant improvements, if any) and during the Term, Tenant will provide and keep in
force the following coverage:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Commercial general liability insurance insuring Tenant&#146;s use
and occupancy of the Premises and use of the Common Areas, and covering personal
and bodily injury, death, and damage to others&#146; property of not less than the
Liability Limit. Each of these policies shall include cross liability and
severability of interests clauses, and be written on an occurrence, and not
claims-made, basis. Each of these policies shall name Landlord, the Building
property manager, each secured lender, and any other party reasonably designated
by Landlord as an additional insured (&#147;Additional Insured&#148;).</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">All risk insurance (including standard extended coverage
endorsement perils, leakage from fire protective devices and other water damage)
covering the full replacement cost of the Leasehold Improvements and Tenant&#146;s
Personal Property. Each of these policies shall name Landlord and each Additional
Insured an additional insured to the extent of their interest in the Leasehold
Improvements. Each of these policies shall include a provision or endorsement in
which the insurer waives its right of subrogation against Landlord and each
Additional Insured.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Insurance covering the perils described in (2)&nbsp;for Tenant&#146;s loss of
income or insurable gross profits with a limit not less than Tenant&#146;s annual Rent.
Each of these policies shall include a provision or</div></TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->12<!-- /Folio -->
</DIV>




<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">endorsement in which the insurer waives its right of subrogation against
Landlord and each Additional Insured.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">If any boiler or machinery is operated in the Premises, boiler and machinery insurance.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Insurance required by law, including workers&#146; compensation insurance.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(6)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Employers liability insurance with limits not less than $1&nbsp;million.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(7)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Commercial automobile liability insurance covering all owned,
hired, and non-owned vehicles
with a combined single limit of not less than $1&nbsp;million for each accident
or person.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(8)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Insurance covering the Leasehold Improvements and Tenant&#146;s
Personal Property against loss or
damage; provided, however, that Tenant may elect to self-insure this
coverage. If Tenant does not
elect to self-insure this coverage, then each of these policies shall name
Landlord and each
Additional Insured an additional insured to the extent of their interest in
the Leasehold
Improvements.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Insurers and Terms.</U> Each policy required under (a)&nbsp;shall be written
with insurance companies that are
licensed to do business in the state in which the Building is located and have a
rating of not less than A and
a Financial Size Class of at least VIII by A.M. Best Company. The proceeds
of policies providing
coverage under subsection (a)(2) of this &#167;9.1 will be payable to Landlord, Tenant and
each Encumbrance
holder as their interests may appear. Tenant will cooperate with Landlord in
collecting any insurance
proceeds that may be due in the event of loss, and Tenant will execute and deliver to
Landlord proofs of
loss and any other instruments that Landlord may require to recover such insurance
proceeds.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Proof of Insurance.</U> At least 10 days prior to the Commencement Date,
and throughout the Term, Tenant
will provide Landlord with certificates of insurance establishing that the coverage
required under
subsection (a)&nbsp;is in effect. Tenant will provide replacement certificates at least 30
days before any policy
expires that the expiring policy has been renewed or replaced.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>9.2</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><B>Landlord&#146;s Insurance.</B></div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Landlord&#146;s Coverage</U>. During the Term, Landlord
will provide and keep in force
the following coverage:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Commercial general liability insurance.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">All risk insurance (including standard extended coverage
endorsement perils, leakage from fire
protective devices and other water damage) covering the Project improvements
(excepting the
Leasehold Improvements to be insured by Tenant). Each of these policies shall
include a
provision or endorsement in which the insurer waives its right of subrogation
against Tenant.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Insurance covering the perils described in (2)&nbsp;for Landlord&#146;s
loss of rental income or insurable
gross profits. Each of these policies shall include a provision or endorsement
in which the insurer
waives its right of subrogation against Tenant.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Boiler and machinery insurance.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Other insurance that Landlord elects to maintain.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Terms.</U> Each of the policies required under (a)&nbsp;will have those
limits, deductibles, retentions and other
terms that Landlord prudently determines.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>10. DAMAGE OR DESTRUCTION</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.1 Damage and Repair. </B>If all or any part of the Project is damaged by fire or other
casualty, then the parties will proceed as follows:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Landlord&#146;s Estimates.</U> Landlord will assess the damage to the Project
(but not the Leasehold
Improvements) and notify Tenant of Landlord&#146;s reasonable estimate of the time required to
substantially
complete repairs and restoration of the Project (&#147;Repair Estimate&#148;) within 30&nbsp;days after the
date of the
casualty. Landlord will also estimate the time that all or a portion of the Premises will be
Untenantable
(&#147;Interruption Estimate&#148;). &#147;Untenantable&#148; means that the Premises are not reasonably
accessible or are unfit for the Use. Within 30&nbsp;days after the later of the casualty,
issuance of the Repair Estimate, issuance of</div></TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->13<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">the Interruption Estimate, or receipt of any denial of coverage or reservation of
rights from Landlord&#146;s insurer, each party may terminate the Lease by written notice
to the other on the following conditions:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Landlord may elect to terminate this Lease if either:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(A)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">The Repair Estimate exceeds 180&nbsp;days, or</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(B)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">The damage or destruction occurs in the last 12 Months of the Term; or</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(C)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">The repair and restoration is not fully covered
by insurance maintained or required to be
maintained by Landlord (subject only to those deductibles or retentions Landlord elected
to maintain) or Landlord&#146;s insurer denies coverage or reserves its
rights on coverage.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Tenant may elect to terminate this Lease if the Interruption Estimate exceeds
180&nbsp;days.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Repairs.</U> If neither party terminates the Lease under (a), then
the Lease shall remain in full force and effect and the parties will proceed as
follows:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Landlord will repair and restore the Project (but not Leasehold
Improvements) to the condition
existing prior to such damage, except for modifications required by law.
Landlord will perform
such work reasonably promptly, subject to delay for loss adjustment, delay
caused by Tenant and
Force Majeure.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Tenant will repair and restore the Leasehold Improvements
reasonably promptly to the condition
existing prior to such damage, but not less than then current Building
Standards, except for
modifications required by law.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Tenant may not terminate this Lease if the actual time to
perform the repairs and restoration
exceeds the Repair Estimate, or the actual interruption exceeds the
Interruption Estimate.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.2
Rent Abatement. </B>If as a result of the damage or destruction under &#167;10.1 all or any part
of the Premises becomes Untenantable and Tenant does not actually use the Untenantable part of the
Premises for more than 3 consecutive business days, then Tenant&#146;s Base Rent and Additional Rent for
the Untenantable part of the Premises that Tenant does not actually use will be abated from the
4<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> consecutive business day until the Untenantable part of the Premises becomes
tenantable; however, Tenant will not be entitled to abatement of Base Rent and Additional Rent
after the later of (a)&nbsp;that date that Landlord repairs and restores the Project to the extent
necessary for Tenant to reasonably access and use the Premises for the Use, or (b)&nbsp;that date that
repair and restoration of the Leasehold Improvements would have been substantially complete if
Tenant had performed its obligations under &#167;10.1(b)(2) diligently and in coordination with
Landlord&#146;s work. Tenant&#146;s sole remedies against Landlord for damage or destruction of any part of
the Project is abatement of Base Rent and Additional Rent under this &#167;10.2 and/or termination of
the Lease as provided in &#167;10.1, and Landlord will not be liable to Tenant for any other amount,
including damages to Tenant&#146;s Personal Property, consequential damages, actual or constructive
eviction, or abatement of any other item of Rent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>11. INDEMNITY</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.1 Claims.</B> &#147;Claims&#148; means any and all liabilities, losses, claims, demands, damages or
expenses that are suffered or incurred by a party, including attorneys&#146; fees reasonably incurred
by that party in the defense or enforcement of
the rights of that party.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.2 Landlord&#146;s Waivers and Tenant&#146;s Indemnity.</B>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Landlord&#146;s Waivers.</U> Landlord waives any Claims against Tenant and its
Affiliates for perils insured or
required to be insured by Landlord under subsections (2)&nbsp;and
(3)&nbsp;of &#167;9.2(a), except
to the extent caused by
the gross negligence or willful misconduct of Tenant or its Affiliates.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Tenant&#146;s Indemnity.</U> Unless waived by Landlord under (a), Tenant will
indemnify and defend Landlord
and its Affiliates and hold each of them harmless from and against Claims arising
from:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Any accident or occurrence on or about the Premises, except to the extent caused by
Landlord&#146;s or
its Affiliates&#146; gross negligence or willful misconduct;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Tenant&#146;s or its Affiliates&#146; negligence or willful misconduct; or</div></TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->14<!-- /Folio -->
</DIV>




<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Any claim for commission or other compensation by
any person other than the Brokers for services rendered to Tenant in
procuring this Lease.</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>11.3</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><B>Tenant&#146;s Waivers and Landlord&#146;s Indemnity.</B></DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Tenant&#146;s Waivers.</U> Tenant waives any Claims against Landlord and its
Affiliates for:</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Any peril insured or required to be insured by Tenant under
subsections (2), (3)&nbsp;and (8)&nbsp;of &#167;9.1(a),
except to the extent caused by the gross negligence or willful misconduct of
Landlord or its
Affiliates, but in no case will Landlord be liable for any special or
consequential damages
(including interruption of business, loss of income, or loss of opportunity);
or</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Damage caused by any public utility, public work, other tenants
or occupants of the Project, or
persons other than Landlord; or</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Damages in excess of the insurance Landlord maintains under &#167;9.1.</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Landlord&#146;s Indemnity.</U> Unless waived by Tenant under (a),
Landlord will indemnify and defend Tenant and its Affiliates and hold each of them
harmless from and against Claims arising from:</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Landlord&#146;s or its Affiliates&#146; gross negligence or willful misconduct; or</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Any claim for commission or other compensation by any
person other than the Brokers for
services rendered to Landlord in procuring this Lease.</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.4 Affiliates Defined. </B>&#147;Affiliates&#148; means with respect to a party (a)&nbsp;that party&#146;s
partners, co-members and joint venturers, (b)&nbsp;each corporation or other entity that is a parent or
subsidiary of that party, (c)&nbsp;each corporation or other entity that is controlled by or under
common control of a parent of such party, and (d)&nbsp;the directors, officers, employees and agents of
that party and each person or entity described in subsections (a)&nbsp;through (c)&nbsp;of this &#167;11.4.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.5 Survival of Waivers and Indemnities. </B>Landlord&#146;s and Tenant&#146;s waivers and indemnities
under &#167;11.2 and &#167;11.3 will survive the expiration or early termination of this Lease.
</DIV>


<DIV style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>12.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>CONDEMNATION</B></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>12.1
Taking. </B>&#147;Taking&#148; means acquiring of all or part of the
Project for any public or quasi-public use by
exercise of a right of eminent domain or under any other law, or any
sale in lieu thereof. If a
Taking occurs:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Total Taking.</U> If because of a Taking substantially all of the Premises
is untenantable for substantially all of the remaining Term, then the Lease
terminates on the date of the Taking.</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><u>Partial Taking</u>. If a Taking does not cause the Lease to be terminated under
(a), then Landlord will restore
(and alter, as necessary) the Premises to be tenantable, unless the Lease is
terminated by either Landlord or Tenant under the following circumstances:</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Landlord may terminate the Lease upon 60&nbsp;days prior written
notice to Tenant if Landlord
reasonably determines that it is uneconomical to restore or alter the
Premises to be tenantable.</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Tenant may terminate the Lease upon 60&nbsp;days prior written notice
to Landlord if the Taking causes
more than 20% of the Premises to be Untenantable for the remainder of the Term
and Tenant cannot reasonably operate Tenant business for the Use in the remaining
Premises.</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">If the Lease is not terminated under (a)&nbsp;or (b), the Rent payable by Tenant
will be reduced for the term of
the Taking based upon the RSF Premises rendered Untenantable by the Taking and that
Tenant does not actually use.</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>12.2 Awards. </B>Landlord is entitled to the entire award for any claim for a taking of any
interest in this Lease or the Project, without deduction or offset for Tenant&#146;s estate or interest; however, Tenant may
make a claim for relocation expenses and damages to Tenant&#146;s
Personal Property and business to the extent that Tenant&#146;s
claim does not reduce Landlord&#146;s award.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->15<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>13. TENANT TRANSFERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>13.1 Terms Defined.</B>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<U>Transfer Defined.</U> &#147;Transfer&#148; means any:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Sublease of all or part of the premises, or assignment,
mortgage, hypothecation or other conveyance of an interest in this
Lease;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Use of the Premises by anyone other than Tenant with Tenant&#146;s consent;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Change in Tenant&#146;s form of organization (e.g., a change from a
partnership to limited liability company);</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Transfer of 51% or more of Tenant&#146;s assets, shares (excepting
shares transferred in the normal course of public trading), membership interests,
partnership interests or other ownership interests; or</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Transfer of effective control of Tenant.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>13.2 Prohibited Transfers. </B>Tenant may not enter into a Transfer or other agreement to use
or occupy the Premises that provides for rent or other compensation based in whole or in part on
the net income or profits from the business operated in the Premises. Tenant may not enter into a
Transfer if the proposed transferee is directly or indirectly related to the Landlord under &#167;856,
et seq. of the Internal Revenue Code of 1986 (as amended). Any such Transfers shall be considered
null, void and of no force or effect.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>13.3 Consent Not Required. </B>Tenant may effect a Transfer to a Permitted Transferee without
Landlord&#146;s prior consent and without application of &#167; 13.5, below, but with notice to Landlord
given not later than the Permitted Transferee&#146;s occupancy. &#147;Permitted Transferee&#148; means any
person or entity that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Either (1)&nbsp;controls, is controlled by, or is under common control with Tenant
(for purposes hereof, &#147;control&#148; shall mean ownership of not less than 50% of all of the
voting stock or legal and equitable interest in the entity in question), (2)&nbsp;results
from the merger or consolidation of Tenant, or (3)&nbsp;acquires all or substantially all of
the stock and/or assets of Tenant as a going concern;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Has a tangible net worth and liquid assets immediately following the Transfer
not less than the greater of (1)&nbsp;Tenant&#146;s tangible net worth and liquid assets
preceding the Transfer, or (2)&nbsp;Tenant&#146;s tangible net worth and liquid assets as of the
execution of this Lease;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Will not, by occupying the Premises, cause Landlord to breach any other lease
or other agreement affecting the Project; and</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is not named or listed as a Blocked Person.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>13.4 Consent Required. </B>Each proposed Transfer other than those prohibited under &#167; 13.2 or
permitted under &#167;13.3 requires Landlord&#146;s prior consent, in which case the parties will proceed as
follows:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Tenant&#146;s Notice</U>. Tenant shall notify Landlord at least 30&nbsp;days prior to
the proposed Transfer of the name and address of the proposed transferee and the
proposed use of the Premises, and include in the notice the Transfer documents and
copies of the proposed transferee&#146;s balance sheet and income statement for the most
recent complete fiscal year.</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Landlord&#146;s Rights</U>. Within 30&nbsp;days after receipt of Tenant&#146;s complete notice,
Landlord may either:</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">If the proposed Transfer is either an assignment of this Lease or
sublease of substantially all of the Premises, terminate this Lease as of the
proposed Transfer date;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">If the proposed Transfer is a sublease of all of the Premises or
any part of the Premises that will be separately demised and have its own
entrance from the Common Areas, exercise a right of first refusal to sublease
such portion of the Premises at the lesser of (A)&nbsp;the Rent (prorated for
subletting part of the Premises), or (B)&nbsp;the rent payable in the proposed
Transfer; or</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Consent or deny consent to the proposed Transfer, consent not to be
unreasonably withheld if:</DIV></TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">16<!-- Folio --><!-- /Folio -->
</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(A)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">The proposed transferee, in Landlord&#146;s reasonable
opinion, has the financial capacity to meet its obligations under the
proposed Transfer;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(B)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">The proposed use is
consistent with the Use and will not cause
Landlord to be in breach of any lease or other
agreement affecting the Project;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(C)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">The proposed transferee is typical of tenants that directly lease
premises in first-class office buildings;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(D)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">The proposed transferee is not an existing tenant
or an Affiliate of an existing tenant, or a party with which Landlord is
actively negotiating to lease space in the Building (or has, in the last
6&nbsp;months, been actively negotiating to lease space in the Building);</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(E)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">The proposed transferee is not an agency of any
government, medical facility or entity having sovereign immunity;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(F)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Tenant is not in Default under this Lease; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(G)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The proposed transferee is not named or listed as a Blocked Person.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify"><U>Compelling Consent.</U> If Landlord does not consent to a Transfer,
Tenant&#146;s sole remedy against Landlord will be an action for specific performance or
declaratory relief, and Tenant may not terminate this Lease or seek monetary damages.</div></TD>
</TR>

</TABLE>
</DIV>

<div align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>13.5 Payments to Landlord. </B>Tenant will pay Landlord all of the Transfer receipts that exceed
Tenant&#146;s Rent (on a per square foot basis); after Tenant is reimbursed for Tenant&#146;s reasonable and
customary out-of-pocket costs incurred in the Transfer, including attorneys&#146; fees, cost of
improvements (or construction allowances) provided to the transferee,
Alterations, and broker
commissions. Tenant shall pay Landlord the greater of a $1,500 review fee or Landlord&#146;s actual out-
of-pocket legal fees and costs incurred for each proposed Transfer requiring Landlord&#146;s consent,
excepting those in which Landlord exercises its rights under
subsection (1)&nbsp;or (2)&nbsp;of &#167;13.4(b).
</DIV>

<div align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>13.6 Effect of Transfers. </B>No Transfer releases Tenant or any guarantor of this Lease from any
Lease obligation. Landlord&#146;s acceptance of a payment from any person or entity other than Tenant
that occupies the Premises does not waive Tenant&#146;s obligations under this Article&nbsp;13. If Tenant is
in Default of this Lease, Landlord may proceed against Tenant without exhausting any remedies
against any transferee and may require (by written notice to any transferee) any transferee to pay
Transfer rent owed Tenant directly to Landlord (which Landlord will apply against Tenant&#146;s Lease
obligations). Termination of this Lease for any reason will not result in a merger. Each sublease
will be deemed terminated upon termination of this Lease unless Landlord notifies the subtenant in
writing of Landlord&#146;s election to assume any sublease, in which case the subtenant shall attorn to
Landlord under the executory terms of the sublease.
</DIV>

<div align="justify" style="font-size: 10pt; margin-top: 12pt"><B>14. LANDLORD TRANSFERS</B>
</DIV>


<div align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>14.1 Landlord&#146;s Transfer. </B>Landlord&#146;s right to transfer any interest in the Project or this
Lease is not limited by this Lease. Upon any such transfer, Tenant will attorn to Landlord&#146;s
transferee and Landlord will be released from liability under this Lease, except for any Lease
obligations accruing before the transfer that are not assumed by the transferee.
</DIV>

<div align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>14.2 Subordination. </B>This Lease is, and will at all times be, subject and subordinate to each
ground lease, mortgage, deed to secure debt, mortgage or deed of trust now or later encumbering the
Building, including each renewal, modification, supplement, amendment, consolidation or replacement
thereof (each, an &#147;Encumbrance&#148;). At Landlord&#146;s request, Tenant will, without charge, promptly
execute, acknowledge and deliver to Landlord (or, at Landlord&#146;s request, the Encumbrance holder)
any instrument reasonably necessary to evidence this subordination. Notwithstanding the foregoing,
each Encumbrance holder may unilaterally elect to subordinate its Encumbrance to this Lease.
</DIV>

<div align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>14.3 Attornment. </B>Tenant will automatically attorn to any transferee of Landlord&#146;s interest in
the Project that succeeds Landlord by reason of a termination, foreclosure or enforcement
proceeding of an Encumbrance, or by delivery of a deed in lieu of any foreclosure or proceeding <font style="white-space: nowrap">(a
&#147;Successor Landlord&#148;).</font> In this event, the Lease will continue in full force and effect as a direct
lease between the Successor Landlord and Tenant on all of the terms of this Lease, except that the
Successor Landlord shall not be:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Liable for any obligation of Landlord under this Lease, or be subject
to any counterclaim, defense or offset accruing before Successor Landlord succeeds to
Landlord&#146;s interest;</div></TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->17<!-- /Folio -->
</DIV>



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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Bound by any modification or amendment of this Lease made without Successor
Landlord&#146;s consent,</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Bound by any prepayment of more than one month&#146;s Rent;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Obligated to return any Security Deposit not paid over to Successor Landlord, or</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Obligated to perform any improvements to the Premises (or provide an allowance therefor). Upon
Successor Landlord&#146;s request, Tenant will, without charge, promptly execute, acknowledge and
deliver to Successor Landlord any instrument reasonably necessary required to evidence such
attornment.</div></TD>
</TR>

</TABLE>
</DIV>



<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>14.4 Estoppel Certificate. </B>Tenant (and each guarantor of the Lease and transferee of an
interest in the Lease, including subtenants) shall within five (5) days after Tenant&#146;s taking
possession of the Premises in accordance with the terms of the Tenant Work Letter, and at any time
and during the Term from time to time, upon not less than ten (10)&nbsp;days&#146; prior written notice from
Landlord, execute, acknowledge and deliver to Landlord a statement in writing (the &#147;Estoppel
Certificate&#148;) substantially in the form of Exhibit &#147;F&#148;, upon which Landlord and each existing or
prospective Encumbrance holder may rely confirming the following (or whether any exceptions exist
to the following):
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The Commencement Date and Expiration Date;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The documents that constitute the Lease, and that the Lease is unmodified and in full
force and effect;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The date through which Base Rent, Additional Rent, and other Rent has been paid;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">That neither Landlord nor Tenant is in Default;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">That Landlord has satisfied all Lease obligations to improve the Premises (or
provide Tenant an allowance therefor) and Tenant has accepted the Premises;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">That Tenant solely occupies the Premises; and</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(g)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Such other matters concerning this Lease or Tenant&#146;s occupancy that Landlord may
reasonably require.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 12pt"><B>15. DEFAULT AND REMEDIES</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>15.1</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify"><B>Tenant&#146;s Default and Remedies.</B></div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Tenant will be in &#147;Default&#148; of this Lease if Tenant either:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Fails to pay Rent when due, and the failure continues for 5&nbsp;days
after Landlord notifies Tenant of
this failure under &#167;17.2 (Tenant waiving any other notice that may be
required by law);</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Fails to perform a non-monetary Lease obligation of Tenant and the
failure continues for 30&nbsp;days
after Landlord notifies Tenant of this failure, but if it will reasonably take
more than 30&nbsp;days to
perform this obligation, then Tenant will have a reasonable time to perform
this obligation, but
only if Tenant commences performing this obligation within 30&nbsp;days after
Landlord notifies
Tenant of this failure;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Consummates a Transfer that violates Article&nbsp;13;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Fails, within 15&nbsp;days after it occurs, to discharge any attachment
or levy on Tenant&#146;s interest in
this Lease;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Fails, within 60&nbsp;days after it occurs, to have vacated or dismissed
any appointment of a receiver or
trustee of Tenant&#146;s assets (or any Lease guarantor&#146;s assets), or any voluntary
or involuntary
bankruptcy or assignment for the benefit of Tenant&#146;s creditors (or any Lease
guarantor&#146;s
creditors); or</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(6)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Is listed or named as a Blocked Person, or Tenant acts directly or
indirectly for or on behalf of any
Blocked Person in connection with this Lease.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">If Tenant is in Default, Landlord may, without prejudice to the exercise
of any other remedy, exercise any remedy available under law, including those described
below:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Landlord has the remedy described in California Civil Code
&#167;1951.4. Landlord may continue this Lease in effect after Tenant&#146;s breach and
abandonment (until Landlord terminates Tenant&#146;s right</div></TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->18<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">to possess the Premises under (2), below) and recover Rent as it becomes due.
If Landlord elects this remedy, any Transfer Tenant proposes will be subject
only to reasonable limitations.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Landlord has the remedy described in California Civil
Code &#167;1951.2. If Tenant does not abandon the Premises, Landlord may terminate
Tenant&#146;s right to possess the Premises and recover from Tenant all of the
following:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(A)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The worth at the time of award (computed
by allowing interest at the rate in (3), below, on amounts due prior to
award, and discounting amounts due after award at the discount rate of
the Federal Reserve Bank of San Francisco at the time of award plus 1%)
of:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="14%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The unpaid Rent earned as of termination;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="14%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The amount that the unpaid
Rent earned after termination to the date of award exceeds the
rental loss that Tenant proves could have been reasonably
avoided; and</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="14%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">The amount that the unpaid Rent
for the balance of the Term after the date of award exceeds
the rental loss that Tenant proves could have been reasonably
avoided; and</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(B)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Any other amount necessary to compensate Landlord for damage caused
by Tenant&#146;s
failure to observe this Lease (or which, in the ordinary course of
things would be likely to result therefrom, including costs of
obtaining mitigating rental income, such as excused
rent, brokerage commissions, improvements, parking concessions, lease
takeovers, cash payments, advertising, and moving costs).</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">For any amounts owed under (1)&nbsp;or (2), recover interest
at the greater of the interest rate permitted under law or 10% (&#147;Default Rate&#148;)
from the date each amount is due until paid by Tenant.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>15.2 Landlord&#146;s Default and Remedies.</B>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Landlord will be in &#147;Default&#148; of this Lease if Landlord fails to perform any
Lease obligation of Landlord
and this failure continues for 30&nbsp;days after Tenant notifies Landlord of such
failure, or such longer period
of time as is reasonable if more than 30&nbsp;days is reasonably required to
perform this obligation if
performance commences within this 30-day period and is diligently prosecuted to
completion.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">If Landlord is in Default, then Tenant may exercise any remedy available under
law that is not waived or
limited under this Lease, subject to the following:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Tenant may not terminate this Lease due to any Landlord Default
until Tenant notifies each
Encumbrance holder and each Encumbrance holder is provided a reasonable
opportunity to gain
legal possession of the Project and, after gaining possession, cure the
Default.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Landlord&#146;s liability under this Lease is limited to Landlord&#146;s interest in the
Building.</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">No liability under this Lease is assumed by Landlord&#146;s Affiliates.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>15.4 Enforcement Costs. </B>If Landlord or Tenant brings any action against the other to enforce or
interpret any
provision of this Lease (including any claim in a bankruptcy or an assignment for the benefit
of creditors), the prevailing
party will be entitled to recover from the other reasonable costs and attorneys&#146; fees
incurred in such action.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>15.5 Jury Trial. </B>Landlord and Tenant each waive trial by jury in any action, proceeding or
counterclaim
brought by either party against the other concerning any matter related to this Lease.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>15.6 Force Majeure. </B>&#147;Force Majeure&#148; means any cause or event beyond both Landlord&#146;s and
Tenant&#146;s reasonable control, including any act of God, government act or restriction, labor
disturbance, general shortage of materials or supplies, riot, insurrection, or act of war or
terrorism. Force Majeure excuses a party from performing any non-monetary Lease obligation for a
commercially reasonable time.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 12pt"><B>16. SECURITY</B>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>16.1 Security Deposit. </B>Tenant will deposit the Security Deposit with Landlord on
execution of this Lease. Landlord is not required to either segregate the Security Deposit from
any other funds or pay any interest on the Security</div>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">Deposit. The Security Deposit secures Tenant&#146;s performance of all Lease obligations. Landlord may
apply the Security Deposit against any cost Landlord incurs or damage Landlord suffers because
Tenant fails to perform any Lease obligation, including payment of
Rent. Tenant will replenish any
Security Deposit applied by Landlord within 10&nbsp;days after receipt of Landlord&#146;s demand. Tenant
waives &#167;1950.7 of the California Civil Code to the extent to affects Landlord&#146;s ability to apply
the Security Deposit.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>16.2 Refund. </B>If Tenant fully and faithfully performs all of its Lease obligations, then
Landlord will refund the Security Deposit (or any balance remaining) to Tenant within 60&nbsp;days after
the expiration or early termination of the Term and Tenant&#146;s vacation and surrender of the Premises
to Landlord in the condition required by &#167;3.3. If Tenant has assigned this Lease, Landlord may
return the Security Deposit to either Tenant or the then current assignee. Landlord&#146;s transfer of
the Security Deposit to any transferee of Landlord&#146;s interest in the Building relieves Landlord of
its obligations under this section, and Tenant will look solely to Landlord&#146;s transferee for return
of the Security Deposit.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>16.3 Financial Statements. </B>Unless Tenant is a public company traded on a major stock
exchange in the United States, Landlord may from time to time (but nor more often than once each
Year) require Tenant to furnish Landlord with an audited financial statement covering the preceding
Year and a certified financial statement covering each completed quarter of the current Year for
which a statement is reasonably available.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 12pt"><B>17. MISCELLANEOUS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.1 Rules and Regulations. </B>Tenant will comply with the Rules and Regulations attached as
Exhibit&nbsp;B. Landlord may reasonably modify or add to the Rules
and Regulations upon notice to Tenant.
If the Rules and Regulations conflict with this Lease, the Lease shall govern.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.2 Notice. </B>Notice to Landlord must be given to Landlord&#146;s Notice Addresses. Notice to
Tenant must be given to Tenant&#146;s Notice Addresses. By notice to the other, either party may change
its Notice Address. Each notice must be in writing and will be validly given if either: (a)&nbsp;the
notice is personally delivered and receipt is acknowledged in writing; (b)&nbsp;the notice is delivered
by a nationally recognized overnight courier service (e.g., FedEx) and receipt is acknowledged in
writing. If the party to receive notice fails or refuses to accept delivery or acknowledge receipt
of the notice in writing, then notice may be validly given by mailing the notice first-class,
certified or registered mail, postage prepaid, and the notice will be deemed received by such party
2 business days after the notice&#146;s deposit in the U.S. Mail.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.3 Intentionally Omitted.</B>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.4 Building Name and Image. </B>Tenant shall not use the Building&#146;s name for any purpose
other than Tenant&#146;s address. Landlord may change the name of the Building without any obligation or
liability to Tenant. Tenant may not use any image of the Building without Landlord&#146;s prior written
consent, which may be withheld in Landlord&#146;s sole discretion.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.5 Entire Agreement. </B>This Lease is deemed integrated and contains all of each
party&#146;s representations, waivers and obligations. The parties may only modify or amend this
Lease in a writing that is fully executed by, and delivered to each party.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.6
Successors. </B>Unless provided to the contrary elsewhere in this Lease, this Lease binds and
inures to the
benefit of each party&#146;s heirs, successors and permissible assignees.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.7 No Waiver. </B>A party&#146;s waiver of a breach of this Lease will not be considered a waiver of
any other breach.
No custom or practice that develops between the parties will prevent either party from
requiring strict performance of the
terms of this Lease. No Lease provision or act of a party creates any relationship between the
parties other than that of
landlord and tenant.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.8 Independent Covenants. </B>The covenants of this Lease are independent. A court&#146;s declaration
that any part
of this Lease is invalid, void or illegal will not impair or invalidate the remaining parts of
this Lease, which will remain in
full force and effect.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.9 Captions. </B>The use of captions, headings, boldface, italics or underlining is for
convenience only, and will
not affect the interpretation of this Lease.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.10 Authority. </B>Individuals signing this Lease on behalf of either party represent and
warrant that they are
authorized to bind that party.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.11 Applicable Law. </B>The laws of California govern this Lease. In any action brought
under this Lease,
Tenant submits to the jurisdiction of the courts of the State of California, and to venue
in the County of Los Angeles.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.12 Confidentiality. </B>Tenant will not record this Lease or a memorandum of this Lease
without Landlord&#146;s
written consent. Tenant will keep the terms of this Lease confidential and, unless required by
law, may not disclose the terms
of this Lease to anyone other than Tenant&#146;s Affiliates to the extent necessary to Tenant&#146;s
business.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.13 Reasonableness. </B>Tenant&#146;s sole remedy for any claim against Landlord that Landlord has
unreasonably
withheld or unreasonably delayed any consent or approval shall be an action for injunctive or
declaratory relief.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.14 Time. </B>Time of the essence as to all provisions in this Lease in which time is a
factor.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.15 Quiet Enjoyment. </B>So long as Tenant is not in Default and subject to the terms of this
Lease beyond the
applicable notice and cure periods, Tenant may peacefully and quietly enjoy the Premises for
the Term under the terms of this
Lease. Landlord will not be liable for any interference with Tenant&#146;s peaceful and quiet
enjoyment of the Premises and use
of the Common Areas that is caused by anyone other than Landlord or its Affiliates.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.16
Landlord&#146;s Entry. </B>Landlord may enter the Premises at all reasonable hours to perform
its obligations
under this Lease. During the last 18&nbsp;months of the Term, Landlord may enter the Premises with
reasonable prior notice to
Tenant to show the Premises to prospective tenants.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.17 Exhibits. </B>The Exhibits attached to this Lease are part of this Lease. If any exhibit is
inconsistent with the
body of this Lease, then the provisions of the body of this Lease will govern.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 12pt"><B>18. OPTION TO EXTEND</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>18.1
</B><u>Option Right</u>. Landlord hereby grants the Tenant named in
this Lease (the &#147;<B>Original Tenant</B>&#148;)
one (1)
option (&#147;<B>Option</B>&#148;) to extend the Term for the entire Premises for a period of five (5)&nbsp;years
(&#147;<B>Option Term</B>&#148;), which Option
shall be exercisable only by written notice delivered by Tenant to Landlord as set forth
below. The rights contained in this
Article&nbsp;18 shall be personal to the Original Tenant and may only
be exercised by the Original
Tenant (and not any assignee,
sublessee or other transferee of the Original Tenant&#146;s interest in this Lease) if the Original
Tenant occupies the entire
Premises as of the date of Tenant&#146;s Acceptance (as defined in Section&nbsp;18.3 below).
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>18.2 </B><u>Option Rent</u>. The Basic Rental payable by Tenant during the Option Term (&#147;<B>Option Rent</B>&#148;)
shall be equal
to the &#147;Market Rent&#148; (defined below). &#147;<B>Market Rent</B>&#148; shall mean the applicable Monthly Basic
Rental, including all
escalations, Direct Costs, additional rent and other charges at which tenants, as of the time
of Landlord&#146;s &#147;Option Rent
Notice&#148; (as defined below), are entering into leases for non-sublease space which is not
encumbered by expansion rights and
which is comparable in size, location and quality to the Premises in renewal transactions for
a term comparable to the Option
Term which comparable space is located in the Project and office buildings comparable to the
Project in San Diego,
California (as reasonably determined by Landlord), taking into consideration the value of the
existing improvements in the
Premises to Tenant, as compared to the value of the existing improvements in such comparable
space, with such value to be
based upon the age, quality and layout of the improvements and the extent to which the same
could be utilized by Tenant
with consideration given to the fact that the improvements existing in the Premises are
specifically suitable to Tenant.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>18.3 </B><u>Exercise of Option</u>. The Option shall be exercised by Tenant only in the following
manner: (i)&nbsp;Tenant shall not be in default, and shall not have
been in default under this Lease
more than once, on the delivery date of the Interest Notice and Tenant&#146;s Acceptance; (ii)&nbsp;Tenant
shall deliver written notice (&#147;<B>Interest Notice</B>&#148;) to Landlord not more than twelve (12)&nbsp;months nor
less than nine (9)&nbsp;months prior to the expiration of the Term, stating that Tenant is interested in
exercising the Option, (iii)&nbsp;within fifteen (15)&nbsp;business days of Landlord&#146;s receipt of Tenant&#146;s
written notice, Landlord shall deliver notice (&#147;<B>Option Rent Notice</B>&#148;) to Tenant setting forth the
Option Rent; and (iv)&nbsp;if Tenant desires to exercise such Option, Tenant shall provide Landlord
written notice within five (5)&nbsp;business days after receipt of
the Option Rent Notice (&#147;<B>Tenant&#146;s
Acceptance</B>&#148;). Tenant&#146;s failure to deliver the Interest Notice or Tenant&#146;s Acceptance on or before
the dates specified above shall be deemed to constitute Tenant&#146;s election not to exercise the
Option. If Tenant timely and properly exercises its Option, the Term shall be extended for the
Option Term upon all of the terms and conditions set forth in this Lease, except that the rent for
the Option Term shall be as indicated in the Option Rent Notice unless Tenant, concurrently with
Tenant&#146;s Acceptance, objects to the Option Rent contained in the Option Rent Notice, in which event
Landlord and Tenant shall use their best good faith efforts to agree
upon the Market Rent. If
Landlord and Tenant fail to reach agreement within fifteen (15)&nbsp;days following Tenant&#146;s Acceptance
(the &#147;Outside Agreement Date&#148;), then three (3)&nbsp;arbitrators shall be selected pursuant to Section
18.4 below and within three (3)&nbsp;business days following such selection, each party shall submit to
each other and to the arbitrators a separate determination of the Market Rent. Tenant&#146;s failure to
timely submit its determination of Market Rent shall be deemed acceptance of Landlord&#146;s submitted
determination of Market Rent. If Tenant&#146;s and Landlord&#146;s
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">submitted Market Rent are within five percent (5%) of each other, the Market Rent shall be deemed
to be Landlord&#146;s submitted Market Rent. If Landlord&#146;s submitted Market Rent is more than 5% higher
than Tenant&#146;s submitted Market Rent, then the parties shall follow the procedure and the Option
Rent shall be determined, as set forth in Section&nbsp;18.4 below.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>18.4 </B><U>Determination of Market Rent</U>. If Tenant timely and appropriately objects to
the Market Rent in Tenant&#146;s Acceptance, and Landlord and Tenant fail to reach agreement on the Market
Rent prior to the Outside Agreement Date, then each party shall make a separate determination of
the Market Rent which shall be submitted to each other and to arbitration in accordance with the
following items (a)&nbsp;through (g):
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Landlord and Tenant shall each appoint, within ten (10)&nbsp;days of the Outside Agreement
Date, one
arbitrator who shall by profession be a current real estate broker or appraiser of comparable
commercial properties in the
immediate vicinity of the Project, and who has been active in such field over me last five
(5)&nbsp;years. The determination of the
arbitrators shall be limited solely to the issue of whether Landlord&#146;s or Tenant&#146;s submitted
Market Rent is the closest to the
actual Market Rent as determined by the arbitrators, taking into account the requirements of
item (b), above (i.e., the
arbitrators may only select Landlord&#146;s or Tenant&#146;s determination of Market Rent and shall not
be entitled to make a
compromise determination).
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The two (2)&nbsp;arbitrators so appointed shall within five (5)&nbsp;business days of the
date of the
appointment of the last appointed arbitrator agree upon and appoint a third arbitrator who shall
be qualified under the same criteria set forth hereinabove for qualification of the initial two
arbitrators.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;If Landlord&#146;s submitted Market Rent is more than 5% higher than Tenant&#146;s submitted Market
Rent, the three arbitrators shall within fifteen (15)&nbsp;days of the appointment of the third
arbitrator reach a decision as to whether the
parties shall use Landlord&#146;s or Tenant&#146;s submitted Market Rent, and shall notify Landlord and
Tenant thereof.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The decision of the majority of the three (3)&nbsp;arbitrators shall be binding upon
Landlord and
Tenant.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;If either Landlord or Tenant fails to appoint an arbitrator within ten (10)&nbsp;days after
the applicable
Outside Agreement Date and Landlord&#146;s submitted Market Rent is more than 5% higher than
Tenant&#146;s submitted Market
Rent, the arbitrator appointed by one of them shall  reach a decision, notify Landlord and
Tenant thereof, and such arbitrator&#146;s
decision shall be binding upon Landlord and Tenant.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;If the two (2)&nbsp;arbitrators fail to agree upon and appoint a third (3<SUP style="font-size: 85%; vertical-align: text-top">rd</SUP>) arbitrator, or
both parties fail to
appoint an arbitrator, then the appointment of the third arbitrator or any arbitrator shall
be dismissed and the matter to be
decided shall be forthwith submitted to arbitration under the provisions of the American
Arbitration Association, but subject
to the instruction set forth in this item (d).
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;The cost of arbitration shall be paid by Landlord and Tenant equally.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><FONT style="font-variant: SMALL-CAPS"><B>Landlord
and Tenant execute this Lease as follows:</B></FONT>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
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    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left"><B>LIFEVANTAGE CORPORATION</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><B>BERNARDO REGENCY, LLC</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ David W. Brown
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1pt">

    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Print:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">DAVID W. BROWN
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Print:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1pt">

    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>

<TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 0px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Title:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President/CEO
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1pt">

    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>

<TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 0px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
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    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Print:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
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    <TD align="left" valign="top">&nbsp;</TD>
</TR>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Title:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->22<!-- /Folio -->
</DIV>




<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXHIBIT A &#151; RULES </B><B><I>&#038; </I></B><B>REGULATIONS</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.&nbsp;Rules&nbsp;Applied. </B>These Rules and Regulations apply equally to Tenant&#146;s Affiliates and
others permitted by Tenant to access, use or occupy the Premises.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.&nbsp;Right to Exclude. </B>Landlord may require that Tenant, its Affiliates and guests comply
with each reasonable security measure that Landlord may establish as a condition entry to the
Premises, Building or Project. These measures may include submitting to a search by persons or
devices employed by Landlord, presenting an identification card or pass issued by the
government, Landlord, or both, being announced to Tenant and accepted as a visitor by Tenant,
and signing a register on entry and exit. Any person who cannot comply with these requirements
may be excluded from the Project. If Landlord requires a Building pass issued by Landlord as a
condition of entry to the Premises, Building or Project, Landlord will furnish a Building pass
to all persons reasonably designated by Tenant in writing. Landlord may exclude or expel from
the Project any person who, in Landlord&#146;s reasonable opinion, is intoxicated or under the
influence of alcohol or drugs.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.&nbsp;Obstructions</B>. Tenant will not cause the Common Areas, or sidewalks or driveways outside
the Building to be obstructed. Landlord may<I>, </I>at Tenant&#146;s expense, remove any such obstruction
without prior notice to Tenant.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.&nbsp;Trash. </B>Tenant may not litter. Tenant will reasonably participate in Landlord&#146;s recycling
program. Tenant will place trash in proper receptacles in the Premises provided by Tenant at
Tenant&#146;s cost, or in Building receptacles designated by Landlord for removal by Landlord;
however, Tenant, at Tenant&#146;s cost, will be responsible for removing trash that results from
large move-ins or deliveries.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.&nbsp;Public Safety</B>. Tenant will not throw anything out of doors, windows or skylights, down
passageways or over walls. Tenant will not use any fire exits or stairways in the Building
except in case of emergency. Firearms, weapons, explosives, flammable materials and other
hazardous liquids and materials may not be brought into or stored in the Premises, Building or
Project without the prior written consent of Landlord, which Landlord may withhold or condition
in Landlord&#146;s sole discretion, excepting reasonable quantities of customary office and cleaning
supplies. Tenant must comply with all life safety programs established by Landlord or required
by law and use commercially reasonable efforts to cause each of Tenant&#146;s employees, invitees and
guests to likewise comply, including participation in drills. Tenant will provide Landlord with
the names and telephone numbers of representatives of Tenant that may be contacted in an
emergency, and of all changes in personnel that may access the Premises.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.&nbsp;Keys, Access Cards and Locks</B>. Landlord may from time to time install and change locks on
entrances to the Project, Building, Common Areas or Premises, and will provide Tenant a number
of keys to meet Tenant&#146;s reasonable requirements. Additional keys will be furnished by Landlord
at Tenant&#146;s cost. At the end of the Term, Tenant will promptly return to Landlord all keys for
the Building and Premises issued by Landlord to Tenant. Unless Tenant obtains Landlord&#146;s prior
written consent, Tenant will not add any locks or change existing locks on any door to the
Premises, or in or about the Premises. If with Landlord&#146;s consent, Tenant installs any lock
incompatible with the Building master locking system, Tenant will; relieve Landlord of each
Lease obligation that requires access to each affected area; indemnify Landlord against any
Claim resulting from forced entry to each affected area in an emergency; and, at the end of the
Term, remove each incompatible lock and replace it with a Building Standard lock at Tenant&#146;s
expense.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.&nbsp;Aesthetics</B>. Unless Tenant obtains Landlord&#146;s prior written consent (which may be
withheld in Landlord&#146;s sole discretion), Tenant may not:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Attach any awnings, signs, displays or projections to either the outside
walls or windows of the Building, or to any part of the Premises visible from outside
the Premises;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Hang any non-Building Standard curtains, blinds, shades or screens in any window or
door of the Premises;</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Coat or sunscreen the interior or exterior of any windows; or</DIV></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><DIV style="text-align: justify">Place any objects on windowsills.</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.&nbsp;Directories
and Signs</B>. Tenant may list 1 trade name and suite number in each
Building-wide directory in
the Building&#146;s main lobby. Tenant will keep all listings
accurate and current. Tenant may install 1 Building Standard tenant identification sign containing Tenant&#146;s trade name and suite number at the
entrance to each separately demised suite leased by Tenant. Tenant will reimburse Landlord for the
cost of all directory listings and signs, plus Landlord&#146;s standard
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">administration fee. Except as provided in this paragraph or elsewhere in the Lease, Tenant may
not install any signs outside the Premises.
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>9.&nbsp;HVAC
Operation</B>. Tenant will not obstruct the HVAC convectors or
diffusers, or adjust or
interfere with
the HVAC system. Tenant will assist the HVAC system in maintaining comfort in the Premises by
drawing shades, blinds and other window coverings in the Premises as may be reasonably
required. Tenant may not use any method of heating or
cooling the Premises other than that supplied by Landlord.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.&nbsp;Plumbing</B>. Tenant will use plumbing fixtures only for the purpose for which they
are constructed. Tenant will reimburse Landlord for any damage caused by Tenant&#146;s misuse of
plumbing fixtures. Tenant will promptly advise Landlord of any damage, defects or breakage of
plumbing, electrical fixtures or HVAC equipment of which Tenant has
knowledge. Tenant may not dispose of liquids, materials or substances (including coffee grounds) that may damage
plumbing in any rest rooms, kitchen sinks, water closets, or other plumbing fixtures serving the
Premises or Building, and shall be responsible for the cost of repairs caused by any misuse or
neglect of such fixtures.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.&nbsp;Equipment Location. </B>Landlord may specify the location of any of Tenant&#146;s Business
machines, mechanical equipment or other property that are unusually heavy, may damage the
Building, or may cause vibration, noise or annoyance to other tenants. Tenant will reimburse
Landlord for any professional engineering certification or assistance reasonably required to
determine the location of these items.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>12.&nbsp;Bicycles. </B>Tenant may not bring bicycles, scooters, or other means of personal
conveyance (other than medically prescribed devices for use by the physically impaired) into
the Building or Premises, and such devices must be parked in areas designated by Landlord.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>13.&nbsp;Animals. </B>Tenant may not keep in or bring into the Building or Premises any fish, birds
or animals, except assistance animals that are permitted and identified in accordance with law.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>14.&nbsp;Intentionally omitted.</B>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>15.&nbsp;Elevators. </B>Any use of the passenger elevators for purposes other than normal passenger
use (such as moving to or from the Building or delivering freight), whether during or after
Business Hours, must be scheduled through the office of the Property
Manager. Tenant will reimburse Landlord for any extra costs incurred by Landlord in connection with any such
non-passenger use of the elevators.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>16.&nbsp;Moving and Deliveries</B>. Moving of Tenant&#146;s Personal Property and deliveries of materials
and supplies to the Premises must be made during the times and through the entrances, elevators
and corridors reasonably designated by Landlord. Moving and deliveries may not be made through any
of the main entrances to the Building without Landlord&#146;s prior permission. Any hand truck or
other conveyance used in the Common Areas must be equipped with rubber tires and rubber side
guards to prevent damage to the Building and its property. Tenant will promptly reimburse Landlord
for the cost of repairing any damage to the Building or its property caused by any person making
deliveries to the Premises.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>17.&nbsp;Solicitation.
</B>Canvassing, soliciting and peddling in the Building are prohibited and
Tenant will cooperate in preventing the same. Tenant may not post any notices, or distribute any
advertisements or handbills outside the Premises.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>18.&nbsp;Food and Vending Machines. </B>Only persons approved from time to time by Landlord may
prepare, solicit orders for, sell, serve or distribute food in or around the Project. Except as
may be specified in the Lease or on construction drawings for the Premises approved by Landlord,
and except for microwave cooking, Tenant will not use the Premises for preparing or dispensing
food, or soliciting of orders for sale, serving or distribution of food without the prior written
approval of Landlord. Tenant may not place any vending machine or dispensing machine in the
Premises without Landlord&#146;s prior written consent.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>19.&nbsp;Pest Control. </B>At Tenant&#146;s sole cost and expense, Tenant must keep the Premises free of
insects, rodents, vermin and other pests and to keep insects, rodents, vermin and other pests from
infesting the Premises, other premises and Common Areas. Tenant will use a pest control service
that is approved by Landlord to perform work in the Building and, if Landlord requests coordinate
Tenant&#146;s pest control efforts with Landlord. Tenant will comply with all requirements of law to
post warnings in the Premises concerning the use of insecticides and other chemicals for pest
control, and post in the Premises or distribute to occupants of the Premises any warnings provided
by Landlord to Tenant concerning Landlord&#146;s pest control efforts. If Tenant fails or refuses to
comply with this paragraph, then Landlord may provide pest control services to
the Premises at Tenant&#146;s cost and expense, plus Landlord&#146;s standard administration fee;
however, Landlord&#146;s performance of pest control on Tenant&#146;s behalf does not release Tenant from
any obligation under this paragraph.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>20.&nbsp;Work Orders and Service Requests. </B>Only authorized representatives of Tenant may request
services or work on behalf of Tenant. Tenant may not request that Building employees perform any
work outside of their duties assigned by Landlord.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>21.&nbsp;Smoking. </B>Neither Tenant nor its Affiliates shall smoke or permit smoking in any part of
the Project in which Landlord, in Landlord&#146;s sole discretion, prohibits smoking. Landlord may
designate the entire Project a no-smoking area, excepting areas in which Landlord, in Landlord&#146;s
sole discretion, permits smoking.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->A-3<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>3
<FILENAME>d60449exv23w1.htm
<DESCRIPTION>CONSENT OF EHRHARDT KEEFE STEINER & HOTTMAN PC
<TEXT>
<HTML>
<HEAD>
<TITLE>exv23w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;23.1</B>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">We consent to the incorporation by reference in
the registration statement on Form S-8 dated June
29, 2007 of LifeVantage Corporation and subsidiary (the Company) of our report dated September&nbsp;19, 2008,
with respect to the consolidated balance sheet of the Company as of June&nbsp;30, 2008, and the related
consolidated statements of operations, changes in stockholders&#146; equity and cash flows for the year
ended June&nbsp;30, 2008 which report appears in the June&nbsp;30, 2008 annual report on Form 10-K SB of
LifeVantage Corporation.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">                                           /s/ Ehrhardt Keefe Steiner &#038; Hottman PC
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">September&nbsp;19, 2008<BR>
Denver, Colorado

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>4
<FILENAME>d60449exv31w1.htm
<DESCRIPTION>CERTIFICATION OF CEO PURSUANT TO SECTION 302
<TEXT>
<HTML>
<HEAD>
<TITLE>exv31w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>EXHIBIT 31.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I, David W. Brown, certify that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">I have reviewed this annual report on
Form 10-KSB (this &#147;Report&#148;) of Lifevantage Corporation (the
&#147;Registrant&#148;);</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with
respect to the period covered by this Report;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all
material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods
presented in this Report;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">The Registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules&nbsp;13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules&nbsp;13a-15(f) and 15d-15(f)) for the Registrant and have:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Designed such disclosure
controls and procedures, or
caused such disclosure
controls and procedures to
be designed under our
supervision, to ensure that
material information
relating to the Registrant,
including its consolidated
subsidiaries, is made known
to us by others within
those entities,
particularly during the
period in which this Report
is being prepared;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Designed such internal
control over financial
reporting, or caused such
internal control over
financial reporting to be
designed under our
supervision, to provide
reasonable assurance
regarding the reliability
of financial reporting and
the preparation of
financial statements for
external purposes in
accordance with generally
accepted accounting
principles;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Evaluated the effectiveness
of the Registrant&#146;s
disclosure controls and
procedures and presented in
this Report our conclusions
about the effectiveness of
the disclosure controls and
procedures, as of the end
of the period covered by
this Report based on such
evaluation; and</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Disclosed in this Report
any change in the
Registrant&#146;s internal
control over financial
reporting that occurred
during the Registrant&#146;s
most recent fiscal quarter
(the Registrant&#146;s fourth
fiscal quarter in the case
of an annual report) that
has materially affected, or
is reasonably likely to
materially affect, the
Registrant&#146;s internal
control over financial
reporting;</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">The Registrant&#146;s other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the Registrant&#146;s auditors and the
audit committee of the Registrant&#146;s board of directors (or persons performing the equivalent
functions):</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">All significant deficiencies and material weaknesses in the
design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the
Registrant&#146;s ability to record, process, summarize and report
financial information; and</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
Registrant&#146;s internal control over financial reporting.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Date:
September&nbsp;23, 2008
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">

/s/ <I>David W. Brown</I>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">David W. Brown&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">President &#038; Chief Executive Officer<BR>

(Principal Executive Officer)&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>5
<FILENAME>d60449exv31w2.htm
<DESCRIPTION>CERTIFICATION OF CFO PURSUANT TO SECTION 302
<TEXT>
<HTML>
<HEAD>
<TITLE>exv31w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>EXHIBIT 31.2</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER</B>
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I, Bradford K. Amman, certify that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">I have reviewed this annual report on Form 10-KSB
(this &#147;Report&#148;) of Lifevantage Corporation (the
&#147;Registrant&#148;);</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Based on my knowledge, this Report does not
contain any untrue statement of a material fact or
omit to state a material fact necessary to make
the statements made, in light of the circumstances
under which such statements were made, not
misleading with respect to the period covered by
this Report;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Based on my knowledge, the financial statements,
and other financial information included in this
Report, fairly present in all material respects
the financial condition, results of operations and
cash flows of the Registrant as of, and for, the
periods presented in this Report;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">The Registrant&#146;s other certifying officer and I
are responsible for establishing and maintaining
disclosure controls and procedures (as defined in
Exchange Act Rules&nbsp;13a-15(e) and 15d-15(e))
internal control over financial reporting (as
defined in Exchange Act Rules&nbsp;13a-15(f) and
15d-15(f)) for the Registrant and have:</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Designed such
disclosure controls
and procedures, or
caused such
disclosure controls
and procedures to be
designed under our
supervision, to
ensure that material
information relating
to the Registrant,
including its
consolidated
subsidiaries, is made
known to us by others
within those
entities,
particularly during
the period in which
this Report is being
prepared;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Designed such
internal control over
financial reporting,
or caused such
internal control over
financial reporting
to be designed under
our supervision, to
provide reasonable
assurance regarding
the reliability of
financial reporting
and the preparation
of financial
statements for
external purposes in
accordance with
generally accepted
accounting
principles;</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Evaluated the
effectiveness of the
Registrant&#146;s
disclosure controls
and procedures and
presented in this
Report our
conclusions about the
effectiveness of the
disclosure controls
and procedures, as of
the end of the period
covered by this
Report based on such
evaluation; and</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Disclosed in this
Report any change in
the Registrant&#146;s
internal control over
financial reporting
that occurred during
the Registrant&#146;s most
recent fiscal quarter
(the Registrant&#146;s
fourth fiscal quarter
in the case of an
annual report) that
has materially
affected, or is
reasonably likely to
materially affect,
the Registrant&#146;s
internal control over
financial reporting;</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">The Registrant&#146;s other certifying officer and I have
disclosed, based on our most recent evaluation of internal
control over financial reporting, to the Registrant&#146;s
auditors and the audit committee of the Registrant&#146;s board of
directors (or persons performing the equivalent functions):</div></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">All significant deficiencies and
material weaknesses in the design or
operation of internal control over
financial reporting which are
reasonably likely to adversely affect
the Registrant&#146;s ability to record,
process, summarize and report
financial information; and</div></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><div align="justify">Any fraud, whether or not material,
that involves management or other
employees who have a significant role
in the Registrant&#146;s internal control
over financial reporting.</div></TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Date:
September&nbsp;23, 2008
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">

/s/ Bradford K. Amman
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Bradford K. Amman&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Chief Financial Officer, Secretary and Treasurer
(Principal Financial Officer)&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>6
<FILENAME>d60449exv32w1.htm
<DESCRIPTION>CERTIFICATION OF CEO PURSUANT TO SECTION 906
<TEXT>
<HTML>
<HEAD>
<TITLE>exv32w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">EXHIBIT 32.1
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED<BR>
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the filing of this annual report on Form 10-KSB of LifeVantage Corporation
(the &#147;Company&#148;) for the period ended June&nbsp;30, 2008, with the Securities and Exchange Commission on
the date hereof (the &#147;Report&#148;), I, David W. Brown, Principal Executive Officer of the Company,
certify, pursuant to 18 U.S.C. Section&nbsp;1350, as adopted pursuant to Section&nbsp;906 of the
Sarbanes-Oxley Act of 2002, that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Date:
September&nbsp;23, 2008
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 0px solid #000000" align="left">

/s/ <I>David W. Brown</I>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">David W. Brown&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">President &#038; Chief Executive Officer<BR>

(Principal Executive Officer)&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>7
<FILENAME>d60449exv32w2.htm
<DESCRIPTION>CERTIFICATION OF CFO PURSUANT TO SECTION 906
<TEXT>
<HTML>
<HEAD>
<TITLE>exv32w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif">


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

</TABLE>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt">EXHIBIT 32.2
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED<BR>
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
</DIV>



<DIV align="justify" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the filing of this annual report on Form 10-KSB of LifeVantage Corporation
(the &#147;Company&#148;) for the period ended June&nbsp;30, 2008, with the Securities and Exchange Commission on
the date hereof (the &#147;Report&#148;), I, Bradford K. Amman, Principal Financial Officer of the Company,
certify, pursuant to 18 U.S.C. Section&nbsp;1350, as adopted pursuant to Section&nbsp;906 of the
Sarbanes-Oxley Act of 2002, that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Date:
September&nbsp;23, 2008
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 0px solid #000000" align="left">

/s/ Bradford K. Amman
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Bradford K. Amman&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Chief Financial Officer, Secretary and Treasurer
(Principal Financial Officer)&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>8
<FILENAME>d60449d6044901.gif
<DESCRIPTION>GRAPHIC
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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
