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<SEC-DOCUMENT>0001354488-07-001932.txt : 20071114
<SEC-HEADER>0001354488-07-001932.hdr.sgml : 20071114
<ACCEPTANCE-DATETIME>20071113202200
ACCESSION NUMBER:		0001354488-07-001932
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20070331
FILED AS OF DATE:		20071114
DATE AS OF CHANGE:		20071113

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DOCUCON INC
		CENTRAL INDEX KEY:			0000843006
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370]
		IRS NUMBER:				742418590
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-10185
		FILM NUMBER:		071240475

	BUSINESS ADDRESS:	
		STREET 1:		8 AIRPORT PARK BOULEVARD
		CITY:			LATHAM
		STATE:			NY
		ZIP:			12110
		BUSINESS PHONE:		5187867733

	MAIL ADDRESS:	
		STREET 1:		8 AIRPORT PARK BOULEVARD
		CITY:			LATHAM
		STATE:			NY
		ZIP:			12110

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DOCUCON INCORPORATED
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>dccn10qmar.htm
<DESCRIPTION>PERIOD ENDED MARCH 31, 2007
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>UNITED STATES</TITLE>
<META NAME="author" CONTENT="Brian">
<META NAME="date" CONTENT="11/13/2007">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000" LINK=#004080 VLINK=#004080 ALINK=#004080>
<P style="margin:0px; padding-bottom:4px; border-bottom:3px double #000000" align=center><BR></P>
<P style="margin:0px" align=center><B>UNITED STATES</B></P>
<P style="margin:0px" align=center><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
<P style="margin:0px" align=center>Washington, D.C. 20549</P>
<P style="margin:0px" align=center><BR></P>
<P style="line-height:21.333px; margin:0px; font-size:18.667px" align=center><B>FORM 10-QSB</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Wingdings"><FONT FACE="Wingdings"><B>x</B></FONT><FONT FACE="Times New Roman"> QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: <BR>
</FONT></P>
<P style="margin:0px" align=center><FONT FACE="Times New Roman">MARCH 31, 2007</FONT></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Wingdings"><FONT FACE="Wingdings">o</FONT><FONT FACE="Times New Roman"> TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD </FONT></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=center><FONT FACE="Times New Roman">FROM __________ TO __________</FONT></P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px" align=center><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=111.6></TD><TD width=415.2></TD><TD width=111.6></TD></TR>
<TR><TD valign=top width=111.6><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=415.2><P style="line-height:21.333px; margin:0px; font-size:18.667px" align=center><B>DOCUCON, INCORPORATED</B></P>
</TD><TD valign=top width=111.6><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=111.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=415.2><P style="margin:0px" align=center>(Exact name of registrant as specified in charter)</P>
</TD><TD valign=top width=111.6><P style="font-size:2pt">&nbsp;</P></TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=191.467></TD><TD width=31.933></TD><TD width=191.533></TD><TD width=31.933></TD><TD width=191.533></TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=191.467><P style="line-height:13.333px; margin:0px" align=center><B>Delaware</B></P>
</TD><TD valign=top width=31.933><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=191.533><P style="line-height:13.333px; margin:0px" align=center><B>1-10185</B></P>
</TD><TD valign=top width=31.933><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=191.533><P style="margin:0px" align=center><B>74-2418590</B></P>
</TD></TR>
<TR><TD valign=top width=191.467><P style="line-height:13.333px; margin:0px" align=center>(State or other jurisdiction</P>
<P style="line-height:13.333px; margin:0px" align=center>of incorporation)</P>
</TD><TD valign=top width=31.933><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=191.533><P style="line-height:13.333px; margin:0px" align=center>(Commission File Number)</P>
</TD><TD valign=top width=31.933><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=191.533><P style="line-height:13.333px; margin:0px" align=center>(IRS Employer</P>
<P style="line-height:13.333px; margin:0px" align=center>&nbsp;Identification No.)</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=95.8></TD><TD width=446.867></TD><TD width=95.733></TD></TR>
<TR><TD valign=top width=95.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=446.867><P style="margin:0px" align=center><B>8 Airport Park Boulevard Latham, New York 12110</B></P>
</TD><TD valign=top width=95.733><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=95.8><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=446.867><P style="margin:0px" align=center>(Address of principal executive offices)</P>
</TD><TD valign=top width=95.733><P style="font-size:2pt">&nbsp;</P></TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=127.667></TD><TD width=383.067></TD><TD width=127.667></TD></TR>
<TR><TD valign=top width=127.667><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=383.067><P style="margin:0px" align=center><B>(518) 786-7733</B></P>
</TD><TD valign=top width=127.667><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=127.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=383.067><P style="margin:0px" align=center>(Registrant&#146;s Telephone Number, including Area Code)</P>
</TD><TD valign=top width=127.667><P style="font-size:2pt">&nbsp;</P></TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px">&nbsp;</P>
<P style="margin:0px">Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) been subject to such filing requirements for the past 90 days. Yes <FONT FACE="Wingdings">o</FONT> No <FONT FACE="Wingdings"><B>x</B></FONT>.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">Indicate by check mark whether the Company is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes <FONT FACE="Wingdings"><B>x</B></FONT> No<FONT FACE="Wingdings">o</FONT>.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">As of November 5, 2007, the Company had 243,918 shares of common stock issued and outstanding.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">Transitional Small Business Disclosure Format (check one): Yes <FONT FACE="Wingdings">o</FONT> No <FONT FACE="Wingdings"><B>x</B></FONT>.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=center><BR>
<BR></P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px; color:#004080" noshade size=1.333>
<P style="margin:0px; page-break-before:always" align=center><B>DOCUCON, INCORPORATED</B></P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px" align=center><B>INDEX TO QUARTERLEY REPORT ON FORM 10-QSB<BR>
<BR>
TABLE OF CONTENTS</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=49></TD><TD width=514.733></TD><TD width=62.267></TD></TR>
<TR><TD width=49><P style="font-size:2pt">&nbsp;</P></TD><TD width=514.733><P style="font-size:2pt">&nbsp;</P></TD><TD width=62.267><P style="margin:0px" align=center><B><U>Page</U></B></P>
</TD></TR>
<TR><TD valign=top width=49><P style="margin-top:5.533px; margin-bottom:5.533px">&nbsp;</P>
</TD><TD valign=top width=514.733><P style="margin:0px" align=center><B>PART I &#8211; FINANCIAL INFORMATION</B></P>
</TD><TD valign=top width=62.267><P style="margin-top:5.533px; margin-bottom:5.533px">&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=49><P style="margin:0px">Item 1.</P>
</TD><TD valign=top width=514.733><P style="margin:0px">Financial Statements</P>
</TD><TD valign=top width=62.267><P style="margin-top:5.533px; margin-bottom:5.533px">&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=49><P style="margin-top:5.533px; margin-bottom:5.533px">&nbsp;</P>
</TD><TD valign=top width=514.733><P style="margin:0px; padding-left:33.733px">Balance Sheet as of March 31, 2007</P>
</TD><TD valign=top width=62.267><P style="margin:0px" align=right>3&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=49><P style="margin-top:5.533px; margin-bottom:5.533px">&nbsp;</P>
</TD><TD valign=top width=514.733><P style="margin:0px; padding-left:33.733px">Statements of Operations for the Three Months ended March 31, 2007 &amp; 2006, and from January 1, 2001 to March 31, 2007.</P>
</TD><TD valign=top width=62.267><P style="margin:0px" align=right>4&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=49><P style="margin-top:5.533px; margin-bottom:5.533px">&nbsp;</P>
</TD><TD valign=top width=514.733><P style="margin:0px; padding-left:33.733px">Statements of Cash Flows for the Three Months ended March 31, 2007 &amp; 2006, and from January 1, 2001 to March 31, 2007.</P>
</TD><TD valign=top width=62.267><P style="margin:0px" align=right>5&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=49><P style="margin-top:5.533px; margin-bottom:5.533px">&nbsp;</P>
</TD><TD valign=top width=514.733><P style="margin:0px; padding-left:33.733px">Notes to Financial Statements</P>
</TD><TD valign=top width=62.267><P style="margin:0px" align=right>6&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=49><P style="margin:0px">Item 2.</P>
</TD><TD valign=top width=514.733><P style="margin:0px">Management Discussion and Analysis of Financial Condition and Results of Operations</P>
</TD><TD valign=top width=62.267><P style="margin:0px" align=right>10&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=49><P style="margin:0px">Item 3.</P>
</TD><TD valign=top width=514.733><P style="margin:0px">Controls and Procedures</P>
</TD><TD valign=top width=62.267><P style="margin:0px" align=right>&nbsp;11&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=49><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=514.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=62.267><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=49><P style="margin-top:5.533px; margin-bottom:5.533px">&nbsp;</P>
</TD><TD valign=top width=514.733><P style="margin:0px" align=center><B>PART II &#150; OTHER INFORMATION</B></P>
</TD><TD valign=top width=62.267><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=49><P style="margin:0px">Item 1.</P>
</TD><TD valign=top width=514.733><P style="margin:0px">Legal Proceedings </P>
</TD><TD valign=top width=62.267><P style="margin:0px" align=right>12&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=49><P style="margin:0px">Item 2.</P>
</TD><TD valign=top width=514.733><P style="margin:0px">Unregistered sales of equity securities and use of proceeds</P>
</TD><TD valign=top width=62.267><P style="margin:0px" align=right>12&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=49><P style="margin:0px">Item 3.</P>
</TD><TD valign=top width=514.733><P style="margin:0px">Defaults upon senior securities</P>
</TD><TD valign=top width=62.267><P style="margin:0px" align=right>12&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=49><P style="margin:0px">Item 4</P>
</TD><TD valign=top width=514.733><P style="margin:0px">Submission of matters to a vote of security holders</P>
</TD><TD valign=top width=62.267><P style="margin:0px" align=right>12&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=49><P style="margin:0px">Item 5.</P>
</TD><TD valign=top width=514.733><P style="margin:0px">Other information</P>
</TD><TD valign=top width=62.267><P style="margin:0px" align=right>12&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=49><P style="margin:0px">Item 6. </P>
</TD><TD valign=top width=514.733><P style="margin:0px">Exhibits</P>
</TD><TD valign=top width=62.267><P style="margin:0px" align=right>12&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=49><P style="margin-top:5.533px; margin-bottom:5.533px">&nbsp;</P>
</TD><TD valign=top width=514.733><P style="margin:0px">Signatures</P>
</TD><TD valign=top width=62.267><P style="margin:0px" align=right>13&nbsp;</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=center><BR>
<BR></P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px; color:#004080" noshade size=1.333>
<P style="margin:0px; page-break-before:always" align=center><B>PART I &#150; FINANCIAL INFORMATION</B></P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px"><B>ITEM 1.</B></P>
<P style="margin:0px; text-indent:48px"><B>FINANCIAL STATEMENTS</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=center><B>DOCUCON, INCORPORATED</B></P>
<P style="margin:0px" align=center><B>(A Development Stage Company)</B></P>
<P style="margin:0px" align=center><B>Balance Sheet</B></P>
<P style="margin:0px" align=center><B>As of March 31, 2007</B></P>
<P style="margin:0px" align=center><B>(Unaudited)</B></P>
<TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=494.867></TD><TD width=30></TD><TD width=113.533></TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px" align=center><B>ASSETS</B></P>
</TD><TD valign=bottom width=143.533 colspan=2><P style="margin:0px" align=center><B>March 31,</B></P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=143.533 colspan=2><P style="margin:0px" align=center><B>2007</B></P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=143.533 colspan=2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px">Current assets:</P>
</TD><TD valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=113.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; text-indent:38.4px">Cash and cash equivalents</P>
</TD><TD valign=bottom width=30><P style="margin:0px" align=right>$&nbsp;</P>
</TD><TD valign=bottom width=113.533><P style="margin:0px" align=right>--&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; padding-left:65.4px">Total current assets</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=113.533><P style="margin:0px" align=right>--&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px"><B>Total Assets</B></P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=113.533><P style="margin:0px" align=right>--&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=113.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px" align=center><B>LIABILITIES AND STOCKHOLDERS&#146; DEFICIT</B></P>
</TD><TD valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=113.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px">Current liabilities</P>
</TD><TD valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=113.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; text-indent:38.4px">Accounts payable</P>
</TD><TD valign=bottom width=30><P style="margin:0px">$</P>
</TD><TD valign=bottom width=113.533><P style="margin:0px" align=right>114,655&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; text-indent:38.4px">Accrued expenses</P>
</TD><TD valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=113.533><P style="margin:0px" align=right>37,834&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; text-indent:38.4px">Notes payable - related party</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=113.533><P style="margin:0px" align=right>108,334&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; text-indent:76.8px">Total current liabilities</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=113.533><P style="margin:0px" align=right>260,823&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px">Stockholders' deficit:</P>
</TD><TD valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=113.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; text-indent:38.4px">Preferred stock, $1.00 par value, 10,000,000 shares authorized -</P>
</TD><TD valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=113.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; text-indent:48px">Series A, 60 shares designated, 7 shares issued and outstanding,</P>
</TD><TD valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=113.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; text-indent:65.4px">liquidation preference of $175,000.</P>
</TD><TD valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=113.533><P style="margin:0px" align=right>7&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; text-indent:48px">Series B, 476,200 shares designated, no shares issued and outstanding,</P>
</TD><TD valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=113.533><P style="margin:0px" align=right>--&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; text-indent:38.4px">Common stock, &nbsp;$.01 par value, 25,000,000 shares authorized,</P>
</TD><TD valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=113.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; text-indent:48px">243,918 shares issued and outstanding</P>
</TD><TD valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=113.533><P style="margin:0px" align=right>2,439&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; text-indent:38.4px">Additional paid-in capital</P>
</TD><TD valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=113.533><P style="margin:0px" align=right>10,373,566&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; text-indent:38.4px">Accumulated deficit</P>
</TD><TD valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=113.533><P style="margin:0px" align=right>(10,071,822)</P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; text-indent:38.4px">Accumulated deficit during development stage</P>
</TD><TD valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=113.533><P style="margin:0px" align=right>(560,777)</P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; text-indent:38.4px">Treasury stock, at cost, 4,495 shares</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=113.533><P style="margin:0px" align=right>(4,236)</P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; text-indent:76.8px">Total stockholders' deficit</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=113.533><P style="margin:0px" align=right>(260,823)</P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px"><B>Total liabilities and stockholders&#146; deficit</B></P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=30><P style="margin:0px">$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=113.533><P style="margin:0px" align=right>--&nbsp;</P>
</TD></TR>
</TABLE>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px" align=center>The accompanying notes are an integral part of these financial statements.</P>
<P style="margin:0px" align=center><BR>
<BR></P>
<P style="margin:0px" align=center>3</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px; color:#004080" noshade size=1.333>
<P style="margin:0px; page-break-before:always" align=center><B>DOCUCON, INCORPORATED</B></P>
<P style="margin:0px" align=center><B>(A Development Stage Company)</B></P>
<P style="margin:0px" align=center><B>Statements of Operations</B></P>
<P style="margin:0px" align=center><B>For the three months ended March 31, 2007 &amp; 2006, and from January 1, 2001 to March 31, 2007</B></P>
<P style="margin:0px" align=center><B>&nbsp;(Unaudited) </B></P>
<P style="margin:0px" align=center><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=344.6></TD><TD width=23.533></TD><TD width=61.933></TD><TD width=15.733></TD><TD width=23.467></TD><TD width=61.067></TD><TD width=15.733></TD><TD width=21.067></TD><TD width=78.2></TD></TR>
<TR><TD valign=bottom width=344.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=185.733 colspan=5><P style="line-height:14.667px; margin:0px; font-size:12px" align=center><B>Three Months Ended March 31,</B></P>
</TD><TD valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=99.267 colspan=2><P style="line-height:14.667px; margin:0px; font-size:12px" align=center><B>January 1, 2001 to</B></P>
</TD></TR>
<TR><TD valign=bottom width=344.6><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=23.533><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=61.933><P style="line-height:14.667px; margin:0px; font-size:12px" align=center><B>2007</B></P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=23.467><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=61.067><P style="line-height:14.667px; margin:0px; font-size:12px" align=center><B>2006</B></P>
</TD><TD valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=99.267 colspan=2><P style="line-height:14.667px; margin:0px; font-size:12px" align=center><B>March 31, 2007</B></P>
</TD></TR>
<TR><TD valign=bottom width=344.6><P style="margin:0px">Revenues</P>
</TD><TD valign=bottom width=23.533><P style="margin:0px" align=right>$</P>
</TD><TD valign=bottom width=61.933><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=23.467><P style="margin:0px" align=right>$</P>
</TD><TD valign=bottom width=61.067><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="margin:0px" align=right>$</P>
</TD><TD valign=bottom width=78.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=344.6><P style="margin:0px">Costs and expenses:</P>
</TD><TD valign=bottom width=23.533><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.933><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=23.467><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=78.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=344.6><P style="margin:0px; padding-left:36px">General and administrative</P>
</TD><TD valign=bottom width=23.533><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.933><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=23.467><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.067><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=78.2><P style="margin:0px" align=right>513,739&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=344.6><P style="margin:0px; padding-left:36px">Depreciation and amortization</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=23.533><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=61.933><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=23.467><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=61.067><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=78.2><P style="margin:0px" align=right>36,901&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=344.6><P style="margin:0px">Total costs and expenses:</P>
</TD><TD valign=bottom width=23.533><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.933><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=23.467><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.067><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=78.2><P style="margin:0px" align=right>550,640&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=344.6><P style="margin:0px">Operating loss</P>
</TD><TD style="border-top:1.333px solid #000000" valign=bottom width=23.533><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-top:1.333px solid #000000" valign=bottom width=61.933><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1.333px solid #000000" valign=bottom width=23.467><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-top:1.333px solid #000000" valign=bottom width=61.067><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1.333px solid #000000" valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1.333px solid #000000" valign=bottom width=78.2><P style="margin:0px" align=right>&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=344.6><P style="margin:0px">Other income (expense):</P>
</TD><TD valign=bottom width=23.533><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.933><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=23.467><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=78.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=344.6><P style="margin:0px; padding-left:36px">Loss on abandonment of fixed assets</P>
</TD><TD valign=bottom width=23.533><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.933><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=23.467><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.067><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=78.2><P style="margin:0px" align=right>(10,266)</P>
</TD></TR>
<TR><TD valign=bottom width=344.6><P style="margin:0px; padding-left:36px">Interest expense</P>
</TD><TD valign=bottom width=23.533><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.933><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=23.467><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.067><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=78.2><P style="margin:0px" align=right>(719)</P>
</TD></TR>
<TR><TD valign=bottom width=344.6><P style="margin:0px; padding-left:36px">Interest income</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=23.533><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=61.933><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=23.467><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=61.067><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=78.2><P style="margin:0px" align=right>848</P>
</TD></TR>
<TR><TD valign=bottom width=344.6><P style="margin:0px">Total other income (expense)</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=23.533><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=61.933><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=23.467><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=61.067><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=78.2><P style="margin:0px" align=right>(10,137)</P>
</TD></TR>
<TR><TD valign=bottom width=344.6><P style="margin:0px">Net loss:</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=23.533><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=61.933><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=23.467><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=61.067><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=78.2><P style="margin:0px" align=right>&nbsp;&nbsp;&nbsp;&nbsp;(560,777)&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=344.6><P style="margin:0px">Net loss applicable to common stockholders</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=23.533><P style="margin:0px" align=right>$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=61.933><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=23.467><P style="margin:0px" align=right>$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=61.067><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=21.067><P style="margin:0px" align=right>$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=78.2><P style="margin:0px" align=right>(560,777)</P>
</TD></TR>
<TR><TD valign=bottom width=344.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=23.533><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.933><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=23.467><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=78.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=344.6><P style="margin:0px; padding-left:12px">Basic and net loss per common share</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=23.533><P style="margin:0px" align=right>$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=61.933><P style="margin:0px" align=right>0.00&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=23.467><P style="margin:0px" align=right>$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=61.067><P style="margin:0px" align=right>0.00&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=78.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=344.6><P style="margin:0px; padding-left:12px">Weighted average number of common shares outstanding</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=23.533><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=61.933><P style="margin:0px" align=right>243,918&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=23.467><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=61.067><P style="margin:0px" align=right>243,918&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=78.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
</TABLE>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=center>The accompanying notes are an integral part of these financial statements.</P>
<P style="margin:0px" align=center><BR>
<BR></P>
<P style="margin:0px" align=center>4</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px; color:#004080" noshade size=1.333>
<P style="margin:0px; page-break-before:always" align=center><B>DOCUCON, INCORPORATED</B></P>
<P style="margin:0px" align=center><B>(A Development Stage Company)</B></P>
<P style="margin:0px" align=center><B>Statements of Cash Flows</B></P>
<P style="margin:0px" align=center><B>For the three months ended March 31, 2007 &amp; 2006, and from January 1, 2001 to March 31, 2007</B></P>
<P style="margin:0px" align=center><B>(Unaudited) </B></P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=354.667></TD><TD width=21.067></TD><TD width=64.6></TD><TD width=15.733></TD><TD width=21.067></TD><TD width=57.6></TD><TD width=15.733></TD><TD width=21.067></TD><TD width=90.533></TD></TR>
<TR><TD valign=bottom width=354.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=180.067 colspan=5><P style="line-height:14.667px; margin:0px; font-size:12px" align=center>Three Months Ended March 31,</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=111.6 colspan=2><P style="line-height:14.667px; margin:0px; font-size:12px" align=center>January 1, 2001 to</P>
</TD></TR>
<TR><TD valign=bottom width=354.667><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=85.667 colspan=2><P style="line-height:14.667px; margin:0px; font-size:12px" align=center>2007</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=78.667 colspan=2><P style="line-height:14.667px; margin:0px; font-size:12px" align=center>2006</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=111.6 colspan=2><P style="line-height:14.667px; margin:0px; font-size:12px" align=center>March 31, 2007</P>
</TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px">Cash flows from operating activities</P>
</TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=64.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=57.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px; text-indent:38.4px">Net loss:</P>
</TD><TD valign=bottom width=21.067><P style="margin:0px" align=right>$</P>
</TD><TD valign=bottom width=64.6><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="margin:0px" align=right>$</P>
</TD><TD valign=bottom width=57.6><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="margin:0px" align=right>$</P>
</TD><TD valign=bottom width=90.533><P style="margin:0px" align=right>(560,777)</P>
</TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px; padding-left:57.6px; text-indent:-19.2px">Adjustments to reconcile net loss to net cash used by &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;operating activities:</P>
</TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=64.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=57.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px; text-indent:57.6px">Depreciation and amortization</P>
</TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=64.6><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=57.6><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="margin:0px" align=right>36,901&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px; text-indent:57.6px">Loss on sale or abandonment of fixed assets</P>
</TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=64.6><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=57.6><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="margin:0px" align=right>10,266&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px; text-indent:57.6px">Change in assets &amp; liabilities</P>
</TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=64.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=57.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px; text-indent:86.4px">Other current assets</P>
</TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=64.6><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=57.6><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="margin:0px" align=right>7,351&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px; text-indent:86.4px">Restricted cash and other assets</P>
</TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=64.6><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=57.6><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="margin:0px" align=right>262,497&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px; text-indent:86.4px">Accounts payable</P>
</TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=64.6><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=57.6><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="margin:0px" align=right>122,976&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px; text-indent:86.4px">Accrued expenses and other current liabilities</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=64.6><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=57.6><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=90.533><P style="margin:0px" align=right>(222,741)&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px; text-indent:38.4px">Net cash used in operating activities</P>
</TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=64.6><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=57.6><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="margin:0px" align=right>(343,527)&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=354.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=64.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=57.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px">Cash flows from investing activities</P>
</TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=64.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=57.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px; text-indent:57.6px">Proceeds from sale of property and equipment</P>
</TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=64.6><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=57.6><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="margin:0px" align=right>500&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px; text-indent:57.6px">Decrease in other assets</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=64.6><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=57.6><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=90.533><P style="margin:0px" align=right>1,760&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px; text-indent:38.4px">Net cash provided by investing activities</P>
</TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=64.6><P style="margin:0px" align=right>-&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=57.6><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="margin:0px" align=right>2,260&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=354.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=64.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=57.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px">Cash flows from financing activities:</P>
</TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=64.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=57.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px; text-indent:57.6px">Principle payments under capital lease obligations</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=64.6><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=57.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=90.533><P style="margin:0px" align=right>(5,280)&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px; text-indent:38.4px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional Paid In Capital</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=64.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=57.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=90.533><P style="margin:0px" align=right>108,177</P>
</TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px; text-indent:38.4px">Net cash used in financing activities</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=64.6><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=57.6><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=90.533><P style="margin:0px" align=right>102,897&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=354.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=64.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=57.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px; text-indent:38.4px">Net increase (decrease) in cash and cash equivalents</P>
</TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=64.6><P style="margin:0px" align=right>-&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=57.6><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="margin:0px" align=right>(238,370)&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px">Cash and cash equivalents &#150; beginning of period</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=64.6><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="margin:0px" align=right>&nbsp;</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=57.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=90.533><P style="margin:0px" align=right>238,370&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=354.667><P style="margin:0px">Cash and cash equivalents &#150; end of period</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=21.067><P style="margin:0px" align=right>$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=64.6><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=21.067><P style="margin:0px" align=right>$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=57.6><P style="margin:0px" align=right>--</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=21.067><P style="margin:0px" align=right>$</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=90.533><P style="margin:0px" align=right>--&nbsp;</P>
</TD></TR>
</TABLE>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px" align=center>The accompanying notes are an integral part of these financial statements.</P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px" align=center><BR>
<BR></P>
<P style="margin:0px" align=center>5</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px; color:#004080" noshade size=1.333>
<P style="margin:0px; page-break-before:always" align=center>DOCUCON INCORPORATED</P>
<P style="margin:0px" align=center>(A Development Stage Company)</P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px" align=center>Notes to Financial Statements</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><B><I>Note 1. Description, background and going concern consideration</I></B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">Docucon, Incorporated (the &#147;Company&#148;) was incorporated under the laws of the State of Delaware on October 11, 1988 and is the successor by merger to a Texas corporation organized in 1986. In May 2000, the Company sold substantially all of its operating assets to TAB Products Co. (&#147;TAB&#148;). Before it sold substantially all of its operating assets to TAB, the Company was in the business of converting paper documents into electronic files for storage and archive purposes.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">After it sold substantially all of its operating assets to TAB, the Company discontinued its document conversion business operations. As of December 31, 2000 the company reverted to a development stage in accordance to Statement of Accounting Standards No.7. The Company has not generated any revenue from any continued business operations since the TAB sale. The Company has incurred and continues to incur general and administrative expenses in order to maintain its existence and pursue the business plan management adopted as a result of the TAB sale. At all times since the TAB sale, that business plan has been to engage in a merger or acquisition transaction with a suitable candidate for the benefit of the Company&#146;s stockholders and other constituents.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">The Company&#146;s financial statements have been prepared assuming that it will continue as a going concern. As stated above, the Company sold substantially all of its operating assets to TAB in May 2000, at which time it discontinued its document conversion business operations. The Company has not earned any revenue from any continued business operations since the TAB sale. The Company has incurred and continues to incur general and administrative expenses in order to maintain its existence and pursue its business plan to engage in a merger or acquisition transaction with a suitable candidate for the benefit of the Company&#146;s stockholders and other constituents. </P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:TimesNewRoman"><FONT FACE="TimesNewRoman">Furthermore, at March 31, 2007, the Company had an aggregate accumulated deficit of approximately $10,632,599 (accumulated deficit of $10,071,822 and accumulated deficit during the development stage of $560,777). These conditions raise substantial doubt about the Company&#146;s ability to continue as a going concern. The Company&#146;s financial statements do not include any adjustments that might result from the outcome of this uncertainty.</FONT></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><FONT FACE="Times New Roman">Management&#146;s plans to mitigate these adverse conditions and events include:</FONT></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">At all times since the TAB sale, the Company has focused its efforts on engaging in a merger or acquisition transaction with a different and more suitable candidate for the benefit of the Company&#146;s stockholders and other constituents. See Note 10 &#147;Subsequent events.&#148;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><B><I>Note 2. Summary of significant accounting policies</I></B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><I>Cash and Cash Equivalents</I></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">The Company has maintained a minimal cash balance with financial institutions that has not exceeded insured limits during the reporting period. The Company has not experienced any losses in such accounts.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><I>Revenue Recognition</I></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">The Company had no revenue-producing operations and hence no revenue from operations for the reporting periods ended March 31, 2007.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px" align=center>6</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px; color:#004080" noshade size=1.333>
<P style="margin:0px; page-break-before:always"><I>Earnings (loss) per Common Share (&#147;EPS&#148;)</I></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">The Company complies with Statement of Financial Accounting Standards (&#147;SFAS&#148;) No. 128, &#147;Earnings Per Share,&#148; which requires dual presentation of basic and diluted earnings per share. Basic EPS excludes dilution and is computed by dividing income (loss) available to common stockholders by the weighted-average common shares outstanding for the year. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><I>Income Taxes</I></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">The Company complies with SFAS No. 109, &#147;Accounting for Income Taxes,&#148; which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amounts expected to be realized.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><I>Use of Estimates</I></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><I>New Accounting Pronouncements</I></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">New accounting pronouncements should be read in conjunction with the 10KSB for the period ended December 31, 2006.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><B><I>Note3. Discontinued operations and related contingency</I></B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">As stated above, in May 2000, the Company sold substantially all of its operating assets to TAB. After it sold substantially all of its operating assets to TAB, the Company discontinued business operations. At all times since the TAB sale, the Company&#146;s business plan has been to engage in a merger or acquisition transaction with a suitable candidate for the benefit of the Company&#146;s stockholders and other constituents.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><B><I>Note 4. Notes payable</I></B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">In September 1999, two directors of the Company made advances to the Company totaling $325,000. The Company&#146;s obligation to repay these advances is evidenced by two notes payable. The balance due under these notes payable at March 31, 2007 totaled $108,334. Subsequent to the period ended March 31, 2007 the Company entered into a settlement agreement on September 30, 2007 with the note holders to forgive the amounts due under the two notes payable in exchange for common shares of the Company. See Note 10 &#147;Subsequent events.&#148;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><B><I>Note 5. Preferred stock and common stock</I></B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">The Certificate of Designation of the rights, preferences and limitations of the Company&#146;s Series A Convertible Preferred Stock provides that each share of the Company&#146;s Series A Convertible Preferred Stock ($25,000 stated value) is convertible into 8,333 shares of common stock (approximately 556 shares on a split-adjusted basis) and earns cash dividends of eleven percent (11.0%) per year. Each share of Series A Convertible Preferred Stock is entitled to vote the equivalent of 8,333 (approximately 556 shares on a split-adjusted basis) common shares and has a liquidation preference of $25,000 per share. The Certificate of Designation of the rights, preferences and limitations of the Company&#146;s Series A Convertible Preferred Stock also provides that the Company may not pay dividends on its common stock until all accrued but unpaid dividends on such preferred stock have been paid. At December 31, 2006 and 2005, cumulative undeclared dividends on the seven shares of the Compan
y&#146;s Series A </P>
<P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px" align=center>7</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px; color:#004080" noshade size=1.333>
<P style="margin:0px; page-break-before:always">Convertible Preferred Stock then issued and outstanding were approximately $236,500 and $217,250, respectively. As the cumulative dividends are undeclared, they have not been recorded as a reduction of the Company&#146;s equity.</P>
<P style="margin:0px">In August 2002, in connection with the Company&#146;s then proposed and subsequently abandoned merger with DVS, the Company and the holders of the Company&#146;s Series A Convertible Preferred Stock entered into agreements which would have resulted in the surrender and cancellation of all issued and outstanding shares of such preferred stock, and the release of the Company from any obligation to declare or pay any accrued dividends on such preferred stock. For all intents and purposes, these agreements were contingent upon the consummation of the Company&#146;s proposed merger with DVS, which, as stated above, did not occur. See Note 10 &#147;Subsequent events.&#148;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">The Certificate of Designation of the rights, preferences and limitations of the Company&#146;s Series B Non-Convertible, Cumulative, Non-Voting, Redeemable Preferred Stock provides that the Company may issue up to 476,200 shares of Series B Non-Convertible, Cumulative, Non-Voting, Redeemable Preferred Stock, par value $1.00 per share, which shall earn dividends at the rate of fifteen percent (15.0%) per year. Declaration and payment of dividends are at the sole discretion of the Company&#146;s Board of Directors, and are not mandatory. The Certificate of Designation of the rights, preferences and limitations of the Company&#146;s Series B Non-Convertible, Cumulative, Non-Voting, Redeemable Preferred Stock also provides that the Company may not pay dividends on its common stock until all accrued but unpaid dividends on such preferred stock have been paid. At March 31, 2007, there were no issued and outstanding shares of such preferred stock.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">The Company has never declared or paid any cash dividends on its common stock.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><B><I>Note 6. Stock options</I></B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">None</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><B><I>Note 7. Income taxes</I></B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">At March 31, 2007, the Company had, subject to the limitations discussed below, net operating loss carryforwards for tax purposes of approximately $10,632,599. These loss carryforwards are available to reduce future taxable income and will expire during this fiscal year and through 2021 if not utilized.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">Uncertainties exist as to the future realization of the deferred tax asset under the criteria set forth under SFAS No. 109. In light of these uncertainties, no valuation allowance has been established or reported in the Company&#146;s financial statements for period ended March 31, 2007.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><B><I>Note 8. Other contingency</I></B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">On February 2, 1999, the Company contacted the Department of Defense&#146;s Voluntary Disclosure Program Office to request admission into its Voluntary Disclosure Program. The Company&#146;s request for admission was the result of an internal review that indicated that a Company billing practice reflected in certain invoices submitted to the Department of Defense (&#147;DOD&#148;) between September 1996 and July 1997 might be perceived as a technical violation of DOD billing procedures. The DOD Inspector General formally admitted the Company into the</P>
<P style="margin:0px">Voluntary Disclosure Program in June 1999 and began its investigation of the Company&#146;s voluntary disclosure in the second half of that year. In February 2000, the Company&#146;s previous legal counsel was advised informally that the DOD&#146;s investigation was complete and that criminal prosecution had been declined. Neither the DOD nor any other department or agency of the federal government has made a claim against the Company for civil damages or other remedies relating to the billing practices that were the subject of the Company&#146;s voluntary disclosure or any other matter. The Company&#146;s previous legal counsel has informed us that the making of any such claims today is remote and probably time-barred by the statute of limitations governing the making of any such claims. Based on the opinion of the Company&#146;s legal counsel, the Company considers the matter of these billing practices closed, and no reserve for this contingency has been recorded, nor will any reserve
 for this contingency be established in the absence of changed information or circumstances.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><B><I>Note 9. Weighted average common shares outstanding</I></B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">For the period ended March 31, 2007, weighted average common shares outstanding applicable to earnings (loss) per common share were 243,918.</P>
<P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px" align=center>8</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px; color:#004080" noshade size=1.333>
<P style="margin:0px; page-break-before:always"><BR></P>
<P style="margin:0px">For the period ended March 31, 2007, there were no outstanding options or warrants to purchase shares of the Company&#146;s common stock.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">Common shares of 58,331 (approximately 3,889 on a split-adjusted basis) issuable upon the potential conversion of Company&#146;s Series A Convertible Preferred Stock as of March 31, 2007 were not included in the computation of diluted earnings (loss) per common share because they were anti-dilutive.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><B><I>Note 10. Subsequent events</I></B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">On September 17 2007 the Company entered into a promissory note with Mr. Balbirnie in the amount of $24,000 for various obligations the Company was party to, including former legal counsel, former transfer agent and tax obligations with the state of Delaware. The note carries interest in the amount of 8% per annum and must be repaid by the Company on or before November 31, 2007.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">On September 21, 2007 the Company entered into a Letter of Intent with My EDGAR, Inc. Under the proposed reverse merger: Tax-free reorganization under Internal Revenue Code ss.368 (a)(1)(A) by means of the merger of My EDGAR into a Company wholly owned by Docucon (&quot;Merger Sub&#148;) Whereby the surviving entity will be My EDGAR with and into the Merger Sub and would be maintained as a separate wholly-owned subsidiary of Docucon. Docucon would have no other business other than the business of My EDGAR. Docucon's name would then change to reflect the new business entity.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">Under the terms of the Letter of Intent, Docucon will exchange 100% of the common shares of My EDGAR for 97% of the total issued and outstanding of Docucon upon closing. The total amount of issued and outstanding shares of both Docucon and My EDGAR are subject to adjustments, splits, or reverse prior to close or at close of definitive merger agreement.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">On September 25, 2007, the Company entered into a settlement agreement with the former legal counsel to the Company in the amount of $15,000. The legal firm was previously owed $27,738 for services dating back to 2004. The previous invoices outstanding were $10,330 for services in 2004 and $17,398 for services in 2005 and 2006. The payment under settlement was funded directly from the proceeds under the promissory note payable dated September 21, 2007.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">On September 26, 2007, the Company entered into a settlement agreement with the former transfer agent to the Company in the amount of $4,000, the transfer agent was previously owed $19,760 for services dating back to 2002. The payment under settlement was funded directly from the proceeds under the promissory note payable dated September 21, 2007.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">On September 28, 2007, the companies Board of Directors unanimously elected Mr. Brian R. Balbirnie to serve on the Company&#146;s Board until its next annual meeting.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">On September 30, 2007, the Company entered into settlement agreements with two former note holders and directors of the Company. Both <FONT FACE="TimesNewRoman">Edward P. Gistaro and </FONT>Chauncey E. Schmidt collectively were owed $108,334 or $54,167 each. Each party agreed to convert amounts owed without interest into the Company&#146;s common stock at a conversion rate of $0.50 per share, for a total of 216,668 common shares. </P>
<P style="margin:0px">&nbsp;</P>
<P style="margin:0px">On September 30, 2007, the Company entered into a settlement agreement with a former officer for previous amounts owed under an employment agreement in the amount of $37,834. The party agreed to convert its obligation into the Company&#146;s common stock at a conversion rate of $0.50 per share, for a total of 75,668 common shares.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">On September 30, 2007, the Company entered into a settlement agreement with a former consultant for previous amounts owed in the amount of $53,325. The party agreed to convert its obligation into the Company&#146;s common stock at a conversion rate of $0.50 per shares, for a total of 106,650 common shares.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px" align=center>9</P>
<P style="margin:0px"><BR></P>
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<P style="margin:0px; page-break-before:always">Between October 16 and 17, 2007 the State of Delaware was paid $3378 in taxes and re-instatement fees related to the corporation and its good standing. These funds were paid under the September 21 2007 promissory note from and directly by Balbirnie.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><I>Change of certifying accountant</I></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">Effective September 28, 2007, the Company retained De Joya Griffith &amp; Company, LLC (the &#147;Accountant&#148;) as the principal independent auditors of the Registrant effective immediately to review or audit, as the case may be, its financial statements beginning fiscal year ended December 31, 2002. Before engaging De Joya Griffith &amp; Company, the Company did not consult with the accounting firm regarding the application of accounting principles to a specific transaction; or the type of audit opinion that might be rendered on the Company&#146;s financial statements; or regarding any matter that were the subject of any disagreement between or reportable event regarding the Company and any of its former principal independent accountants.</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px"><B>ITEM 2.</B></P>
<P style="margin:0px; text-indent:48px"><B>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">Except for the historical information contained herein, the matters discussed in this Form 10-QSB include certain forward-looking statements that involve risks and uncertainties, which are intended to be covered by safe harbors. Those statements include, but are not limited to, all statements regarding our and management&#146;s intent, belief and expectations, such as statements concerning our future and our operating and growth strategy. We generally use words such as &quot;believe,&quot; &quot;may,&quot; &quot;could,&quot; &quot;will,&quot; &quot;intend,&quot; &quot;expect,&quot; &quot;anticipate,&quot; &quot;plan,&quot; and similar expressions to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons including our ability to implement our business plan, our ability to raise additional funds and manage our substanti
al debts, consumer acceptance of our products, our ability to broaden our customer base, our ability to maintain a satisfactory relationship with our suppliers and other risks described in our reports filed with the Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, the factors set forth under the Risk Factors section of Item 6, Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations, of the Annual Report on Form 10-KSB for the year ended December 31, 2006 and other factors detailed from time to time in our filings with the Securities and Exchange Commission. In light of the significant uncertai
nties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. All forward-looking statements made in this Form 10-QSB are based on information presently available to our management. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><I>Introduction</I></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">Our discussion and analysis refer extensively to the Company&#146;s period ended March 31, 2007. Our discussion and analysis herein should be read closely in conjunction with the Company&#146;s previous annual reports as filed with the Securities and Exchange Commission.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><I>Comparison of results of operations for the quarterly periods March 31, 2007 and 2006</I></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">As disclosed in the notes to the financials, after the Company sold substantially all of its operating assets to TAB in May 2000, it discontinued its document conversion business operations. The Company has not generated any revenue from any continued or new business operations since the TAB sale. The Company has incurred general and administrative expenses in order to maintain its existence and pursue the business plan we adopted as a result of the TAB sale. At all times since the TAB sale, that business plan has been and continues to be to engage in a merger or acquisition transaction with a suitable candidate for the benefit of the Company&#146;s stockholders and other constituents. We do not expect to have future operating revenues unless the Company successfully completes a merger or acquisition transaction with a suitable candidate. There is no guarantee that this will happen.</P>
<P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px" align=center>10</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px; color:#004080" noshade size=1.333>
<P style="margin:0px; page-break-before:always"><BR></P>
<P style="margin:0px">At March 31, 2007, carried forward liabilities totaled approximately $261,000, primarily made up of legal, compliance and proxy solicitation fees. At the time of this report the Company, through one of its Directors settled $37,731 in unpaid legal services for the past two fiscal years for a total amount of $15,000 and $15,000 in previous transfer agency related expenses for $4,000. The Company reported no revenues in the quarterly period ended March 31, 2007. </P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><I>Liquidity and capital resources</I></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:TimesNewRoman"><FONT FACE="TimesNewRoman">Current liabilities at March 31, 2007 remained unchanged, which totaled approximately $261,000, included accounts payable for accounting, legal and transfer agent fees incurred to solicit proxies for and hold the June 18, 2002 special meeting of the Company&#146;s stockholders discussed in detail in Item 4 of this report. Accrued expenses of approximately $38,000 were in settlement of amounts due under a business consulting agreement between the Company and a former employee and executive officer of the Company, and approximately $108,000 were due under notes to two current directors of the Company. Unless the Company completes a merger or acquisition transaction with a suitable candidate, we doubt that it will be able to satisfy these liabilities.</FONT></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:TimesNewRoman">The Company&#146;s only potential source of liquidity is a merger or acquisition transaction with a suitable candidate. There is no guarantee this will occur. At March 31, 2007, the Company&#146;s total liabilities exceeded its total assets by approximately $261,000</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:TimesNewRoman">The Company&#146;s financial statements have been prepared assuming that it will continue as a going concern. As disclosed in Item 1 of this report and above in this Item 6, the Company sold substantially all of its operating assets to TAB in May 2000, at which time it discontinued its document conversion business operations. The Company has not generated any revenue from any continued or new business operations since the TAB sale. The Company has incurred minimal general and administrative expenses in order to maintain its existence and pursue its business plan to engage in a merger or acquisition transaction with a suitable candidate for the benefit of the Company&#146;s stockholders and other constituents.</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px"><FONT FACE="Times New Roman"><B>ITEM 3.</B></FONT></P>
<P style="margin:0px; text-indent:48px"><B>CONTROLS AND PROCEDURES.</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><I>Management&#146;s quarterly report regarding internal disclosure controls and procedures</I></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">As of the end of the period covered by this Quarterly Report on Form 10-QSB, an evaluation was performed under the supervision and with the participation of our management, including the individual serving as our Chief Executive Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934). Based on that evaluation, our Chief Executive Officer concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure
. Our disclosure controls and procedures are designed to provide reasonable assurance that such information is accumulated and communicated to our management. Our disclosure controls and procedures include components of our internal control over financial reporting. Management's assessment of the effectiveness of our internal control over financial reporting is expressed at the level of reasonable assurance that the control system, no matter how well designed and operated, can provide only reasonable, but not absolute, assurance that the control system's objectives will be met.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">There was no change in our internal controls, which are included within disclosure controls and procedures, during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls.</P>
<P style="margin:0px" align=center><BR>
<BR></P>
<P style="margin:0px" align=center>11</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px; color:#004080" noshade size=1.333>
<P style="margin:0px; page-break-before:always" align=center><B>PART II &#150; OTHER INFORMATION</B></P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px"><B>ITEM 1.</B></P>
<P style="margin:0px; text-indent:48px"><B>LEGAL PROCEEDINGS</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; text-indent:48px">None</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px"><B>ITEM 2.</B></P>
<P style="margin:0px; text-indent:48px"><B>UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; text-indent:48px">None</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px"><B>ITEM 3.</B></P>
<P style="margin:0px; text-indent:48px"><B>DEFAULTS UPON SENIOR SECURITIES.</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; text-indent:48px">Not Applicable.</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px"><B>ITEM 4.</B></P>
<P style="margin:0px; text-indent:48px"><B>SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; text-indent:48px">None</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px"><B>ITEM 5.</B></P>
<P style="margin:0px; text-indent:48px"><B>OTHER INFORMATION</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px"><B>ITEM 6.</B></P>
<P style="margin:0px; text-indent:48px"><B>EXHIBITS</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">Exhibits included or incorporated by reference herein are set forth in the attached Exhibit Index.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">Exhibit index </P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=73.933></TD><TD width=26.4></TD><TD width=601.933></TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=73.933><P style="margin:0px"><B>Number</B></P>
</TD><TD valign=top width=26.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=601.933><P style="margin:0px"><B>Description</B></P>
</TD></TR>
<TR><TD valign=top width=73.933><P style="margin:0px">31.1</P>
</TD><TD valign=top width=26.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=601.933><P style="margin:0px">Certification of the Chief Executive Officer/ pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</P>
</TD></TR>
<TR><TD valign=top width=73.933><P style="margin:0px">31.2</P>
</TD><TD valign=top width=26.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=601.933><P style="margin:0px">Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</P>
</TD></TR>
<TR><TD valign=top width=73.933><P style="margin:0px">32</P>
</TD><TD valign=top width=26.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=601.933><P style="margin:0px">Certification of the Chief Executive Officer/Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=center><BR>
<BR></P>
<P style="margin:0px" align=center>12</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px; color:#004080" noshade size=1.333>
<P style="margin:0px; page-break-before:always" align=center><B>SIGNATURES</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.</P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=127.667></TD><TD width=127.667></TD><TD width=51.867></TD><TD width=144></TD><TD width=187.2></TD></TR>
<TR><TD valign=top width=127.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=127.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=383.067 colspan=3><P style="margin:0px"><B>DOCUCON, INCORPORATED</B></P>
</TD></TR>
<TR><TD valign=top width=127.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=127.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=51.867><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=144><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=187.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=127.667><P style="margin:0px">November 13, 2007</P>
</TD><TD valign=top width=127.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=51.867><P style="margin:0px" align=right>By:</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=144><P style="margin:0px">/s/ Robert W. Schwartz</P>
</TD><TD valign=top width=187.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=127.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=127.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=51.867><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=331.2 colspan=2><P style="margin:0px">Robert W. Schwartz</P>
</TD></TR>
<TR><TD valign=top width=127.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=127.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=51.867><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=331.2 colspan=2><P style="margin:0px">President, Chief Executive Officer, Chief Financial Officer</P>
</TD></TR>
<TR><TD valign=top width=127.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=127.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=51.867><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=331.2 colspan=2><P style="font-size:2pt">&nbsp;</P></TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
<P style="margin:0px" align=center>13</P>
<P style="margin:0px"><BR></P>
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<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>2
<FILENAME>ex311.htm
<DESCRIPTION>EXHIBIT 31.1
<TEXT>
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<HTML>
<HEAD>
<TITLE>EXHIBIT 31</TITLE>
<META NAME="author" CONTENT="Tech109">
<META NAME="date" CONTENT="11/05/2007">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000" LINK=#004080 VLINK=#004080 ALINK=#004080>
<P style="margin:0px" align=right><B>EXHIBIT 31.1</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=center><B>CERTIFICATION PURSUANT TO</B></P>
<P style="margin:0px" align=center><B>SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002</B></P>
<P style="margin:0px" align=center><B>(18 U.S.C. SECTION 1350)</B></P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px">I, Robert W. Schwartz, certify that:</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">1. I have reviewed this quarterly report of Docucon, Inc.;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">2. 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;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">3. 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 small business issuer as of, and for, the periods presented in this report;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:48px">(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:48px">(b) Evaluated the effectiveness of the small business issuer&#146;s disclosure controls and procedures and presented in this report my 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</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:48px">(c) Disclosed in this report any change in the small business issuer&#146;s internal control over financial reporting that occurred during the small business issuer&#146;s most recent fiscal quarter (the small business issuer&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer&#146;s internal control over financial reporting; and</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuer&#146;s auditors and the audit committee of the small business issuer&#146;s board of directors (or persons performing the equivalent functions):</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:48px">(a) 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 small business issuer&#146;s ability to record, process, summarize and report financial information; and</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:48px">(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer&#146;s internal control over financial reporting.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=295.2></TD><TD width=48></TD><TD width=295.2></TD></TR>
<TR><TD valign=top width=295.2><P style="margin:0px">Date: November 13, 2007</P>
</TD><TD valign=top width=48><P style="margin:0px" align=right>By:</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=295.2><P style="margin:0px">/s/ Robert W. Schwartz</P>
</TD></TR>
<TR><TD valign=top width=295.2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=48><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=295.2><P style="margin:0px">Robert W. Schwartz</P>
</TD></TR>
<TR><TD valign=top width=295.2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=48><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=295.2><P style="margin:0px">Chief Executive Officer and</P>
<P style="margin:0px">Chief Financial Officer</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>3
<FILENAME>ex312.htm
<DESCRIPTION>EXHIBIT 31.2
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>EXHIBIT 31</TITLE>
<META NAME="author" CONTENT="Tech109">
<META NAME="date" CONTENT="11/05/2007">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000" LINK=#004080 VLINK=#004080 ALINK=#004080>
<P style="margin:0px" align=right><B>EXHIBIT 31.2</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=center><B>CERTIFICATION PURSUANT TO</B></P>
<P style="margin:0px" align=center><B>SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002</B></P>
<P style="margin:0px" align=center><B>(18 U.S.C. SECTION 1350)</B></P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px">I, Robert W. Schwartz, certify that:</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">1. I have reviewed this quarterly report of Docucon, Inc.;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">2. 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;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">3. 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 small business issuer as of, and for, the periods presented in this report;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:48px">(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:48px">(b) Evaluated the effectiveness of the small business issuer&#146;s disclosure controls and procedures and presented in this report my 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</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:48px">(c) Disclosed in this report any change in the small business issuer&#146;s internal control over financial reporting that occurred during the small business issuer&#146;s most recent fiscal quarter (the small business issuer&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer&#146;s internal control over financial reporting; and</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuer&#146;s auditors and the audit committee of the small business issuer&#146;s board of directors (or persons performing the equivalent functions):</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:48px">(a) 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 small business issuer&#146;s ability to record, process, summarize and report financial information; and</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:48px">(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer&#146;s internal control over financial reporting.</P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=294.133></TD><TD width=43.6></TD><TD width=293.867></TD></TR>
<TR><TD valign=top width=294.133><P style="margin:0px">Date: November 13, 2007</P>
</TD><TD valign=top width=43.6><P style="margin:0px" align=right>By:</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=293.867><P style="margin:0px">/s/ Robert W. Schwartz</P>
</TD></TR>
<TR><TD valign=top width=294.133><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=43.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=293.867><P style="margin:0px">Robert W. Schwartz</P>
</TD></TR>
<TR><TD valign=top width=294.133><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=43.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=293.867><P style="margin:0px">Chief Executive Officer and</P>
<P style="margin:0px">Chief Financial Officer</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>4
<FILENAME>ex32.htm
<DESCRIPTION>EXHIBIT 32
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>EXHIBIT 32</TITLE>
<META NAME="author" CONTENT="Tech109">
<META NAME="date" CONTENT="11/05/2007">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000" LINK=#004080 VLINK=#004080 ALINK=#004080>
<P style="margin:0px" align=right><B>EXHIBIT 32</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=center><B>CERTIFICATION PURSUANT TO</B></P>
<P style="margin:0px" align=center><B>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</B></P>
<P style="margin:0px" align=center><B>(18 U.S.C. SECTION 1350)</B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of Docucon, Inc., a Delaware corporation (the &#147;Company&#148;), does hereby certify, to such officer's knowledge, that: </P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">The Quarterly Report on Form 10-QSB for the period ended March 31, 2007 (the &#147;Form 10-QSB&#148;) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-QSB fairly presents, in all material respects, the financial condition and results of operations of the Company. </P>
<P style="margin:0px" align=right><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=244.6></TD><TD width=62.6></TD><TD width=352></TD></TR>
<TR><TD valign=top width=244.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=62.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=352><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=244.6><P style="margin:0px">Date November 13, 2007</P>
</TD><TD valign=top width=62.6><P style="margin:0px" align=right>By:</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=352><P style="margin:0px">/s/Robert W. Schwartz</P>
</TD></TR>
<TR><TD valign=top width=244.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=62.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=352><P style="margin:0px">Robert W. Schwartz</P>
</TD></TR>
<TR><TD valign=top width=244.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=62.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=352><P style="margin:0px">Chief Executive Officer and</P>
<P style="margin:0px">Chief Financial Officer</P>
</TD></TR>
<TR><TD valign=top width=244.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=62.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=352><P style="font-size:2pt">&nbsp;</P></TD></TR>
</TABLE>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
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