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<SEC-DOCUMENT>0001354488-07-001991.txt : 20071116
<SEC-HEADER>0001354488-07-001991.hdr.sgml : 20071116
<ACCEPTANCE-DATETIME>20071116151900
ACCESSION NUMBER:		0001354488-07-001991
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		8
CONFORMED PERIOD OF REPORT:	20070930
FILED AS OF DATE:		20071116
DATE AS OF CHANGE:		20071116

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:		071253051

	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>dccn10qsb.htm
<DESCRIPTION>PERIOD ENDED SEPTEMBER 30, 2007
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>Docucon Inc - </TITLE>
<META NAME="author" CONTENT="Edgar Service Bureau">
<META NAME="date" CONTENT="11/16/2007">
</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: SEPTEMBER 30, 2007</FONT></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; font-family:Wingdings">o<FONT FACE="Times New Roman"> TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD 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><FONT FACE="Times New Roman"><B>DOCUCON, INCORPORATED</B></FONT></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 642,904&nbsp;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"><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 September 30, 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 &amp; Nine Months ended September 30, 2007 and 2006, and from January 1, 2001 to September 30, 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 Nine Months ended September 30, 2007 and 2006, and from January 1, 2001 to September 30, 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>11&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;12&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>13&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>13&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>13&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>13&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>13&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>13&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>14&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 September 30, 2007</B></P>
<P style="margin:0px" align=center><B>(Unaudited)</B></P>
<P style="margin:0px" align=center><BR></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>September 30,</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">$&nbsp;</P>
</TD><TD valign=bottom width=113.533><P style="margin:0px" align=right>--&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; padding-left:65.4px">Total current assets</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=113.533><P style="margin:0px" align=right>--&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px"><B>Total Assets</B></P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=113.533><P style="margin:0px" align=right>--&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=494.867><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=113.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px" align=center><B>LIABILITIES AND STOCKHOLDERS&#146; DEFICIT</B></P>
</TD><TD valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=113.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px">Current liabilities</P>
</TD><TD valign=bottom width=30><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=113.533><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=494.867><P style="margin:0px; text-indent:38.4px">Accounts payable</P>
</TD><TD valign=bottom width=30><P style="margin:0px">$&nbsp;</P>
</TD><TD valign=bottom width=113.533><P style="margin:0px" align=right>95,655&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>127,334&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 $.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">$&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>
</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>
<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 &amp; nine months ended September 30, 2007 &amp; 2006, and from January 1, 2001 to September 30, 2007</B></P>
<P style="margin:0px" align=center><B>(Unaudited)</B></P>
<P style="margin:0px" align=center><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=271.267></TD><TD width=24.4></TD><TD width=68.4></TD><TD width=15.733></TD><TD width=24.4></TD><TD width=61.067></TD><TD width=15.733></TD><TD width=24.4></TD><TD width=61.067></TD><TD width=37.333></TD><TD width=28.733></TD><TD width=69.667></TD><TD width=15.733></TD><TD width=24.4></TD><TD width=66.667></TD></TR>
<TR><TD valign=bottom width=271.267><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=194 colspan=5><P style="line-height:13.333px; margin:0px; font-size:10.667px" align=center><B>Three Months Ended September 30,</B></P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=221.2 colspan=5><P style="line-height:13.333px; margin:0px; font-size:10.667px" align=center><B>Nine Months Ended September 30,</B></P>
</TD><TD valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=91.067 colspan=2><P style="line-height:13.333px; margin:0px; font-size:10.667px" align=center><B>January 1, 2001 to</B></P>
</TD></TR>
<TR><TD valign=bottom width=271.267><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=24.4><P style="margin:0px; font-size:10.667px" align=center>&nbsp;</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=68.4><P style="line-height:13.333px; margin:0px; font-size:10.667px" 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:1.333px solid #000000" valign=bottom width=24.4><P style="margin:0px; font-size:10.667px" align=center><B>&nbsp;</B></P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=61.067><P style="line-height:13.333px; margin:0px; font-size:10.667px" align=center><B>2006</B></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=24.4><P style="margin:0px; font-size:10.667px" align=center><B>&nbsp;</B></P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=61.067><P style="line-height:13.333px; margin:0px; font-size:10.667px" align=center><B>2007</B></P>
</TD><TD valign=bottom width=37.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=28.733><P style="margin:0px; font-size:10.667px" align=center><B>&nbsp;</B></P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=69.667><P style="line-height:13.333px; margin:0px; font-size:10.667px" 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:1.333px solid #000000" valign=bottom width=91.067 colspan=2><P style="line-height:13.333px; margin:0px; font-size:10.667px" align=center><B>September &nbsp;30, 2007</B></P>
</TD></TR>
<TR><TD valign=bottom width=271.267><P style="margin:0px">Revenues</P>
</TD><TD valign=bottom width=24.4><P style="margin:0px">$&nbsp;</P>
</TD><TD valign=bottom width=68.4><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=24.4><P style="margin:0px">$&nbsp;</P>
</TD><TD valign=bottom width=61.067><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=24.4><P style="margin:0px">$&nbsp;</P>
</TD><TD valign=bottom width=61.067><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=37.333><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=28.733><P style="margin:0px">$&nbsp;</P>
</TD><TD valign=bottom width=69.667><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=24.4><P style="margin:0px">$&nbsp;</P>
</TD><TD valign=bottom width=66.667><P style="margin:0px" align=right>--&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=271.267><P style="margin:0px">Costs and expenses:</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=68.4><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=24.4><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=24.4><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=37.333><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=28.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=69.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=271.267><P style="margin:0px; padding-left:36px">General and administrative</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=68.4><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.067><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.067><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=37.333><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=28.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=69.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><P style="margin:0px" align=right>513,739&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=271.267><P style="margin:0px; padding-left:36px">Depreciation and amortization</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=68.4><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=61.067><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=61.067><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=37.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=28.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=69.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=66.667><P style="margin:0px" align=right>36,901&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=271.267><P style="margin:0px">Total costs and expenses:</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=68.4><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.067><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.067><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=37.333><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=28.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=69.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><P style="margin:0px" align=right>550,640&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=271.267><P style="margin:0px">Operating loss</P>
</TD><TD style="border-top:1.333px solid #000000" valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1.333px solid #000000" valign=bottom width=68.4><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1.333px solid #000000" valign=bottom width=61.067><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1.333px solid #000000" valign=bottom width=61.067><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=37.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1.333px solid #000000" valign=bottom width=28.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1.333px solid #000000" valign=bottom width=69.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1.333px solid #000000" valign=bottom width=66.667><P style="margin:0px" align=right>--&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=271.267><P style="margin:0px">Other income (expense):</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=68.4><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=24.4><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=24.4><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=37.333><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=28.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=69.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=271.267><P style="margin:0px; text-indent:40px">Loss on abandonment of fixed assets</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=68.4><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.067><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.067><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=37.333><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=28.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=69.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><P style="margin:0px" align=right>(10,266)</P>
</TD></TR>
<TR><TD valign=bottom width=271.267><P style="margin:0px; text-indent:40px">Interest expense</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=68.4><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.067><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=61.067><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=37.333><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=28.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=69.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><P style="margin:0px" align=right>(719)</P>
</TD></TR>
<TR><TD valign=bottom width=271.267><P style="margin:0px; text-indent:40px">Interest income</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=68.4><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=61.067><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=61.067><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=37.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=28.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=69.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=66.667><P style="margin:0px" align=right>848&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=271.267><P style="margin:0px">Total other income (expense)</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=68.4><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=61.067><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=61.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=37.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=28.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=69.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=66.667><P style="margin:0px" align=right>(10,137)</P>
</TD></TR>
<TR><TD valign=bottom width=271.267><P style="margin:0px">Net gain (loss):</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=68.4><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:3px double #000000" valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=61.067><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=61.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=37.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=28.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=69.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=66.667><P style="margin:0px" align=right>(560,777)</P>
</TD></TR>
<TR><TD valign=bottom width=271.267><P style="margin:0px">Net gain (loss) applicable to common stockholders</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=24.4><P style="margin:0px">$&nbsp;</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=68.4><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:3px double #000000" valign=bottom width=24.4><P style="margin:0px">$&nbsp;</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=61.067><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=24.4><P style="margin:0px">$&nbsp;</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=61.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=37.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=28.733><P style="margin:0px">$&nbsp;</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=69.667><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=24.4><P style="margin:0px">$&nbsp;</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=66.667><P style="margin:0px" align=right>(560,777)</P>
</TD></TR>
<TR><TD valign=bottom width=271.267><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=68.4><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=24.4><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=24.4><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=37.333><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=28.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=69.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><P 
style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=271.267><P style="margin:0px; text-indent:13.333px">Basic and net gain (loss) per common share</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=24.4><P style="margin:0px">$&nbsp;</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=68.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=24.4><P style="margin:0px">$&nbsp;</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=61.067><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=24.4><P style="margin:0px">$&nbsp;</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=61.067><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=37.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=28.733><P style="margin:0px">$&nbsp;</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=69.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=66.667><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=271.267><P style="margin:0px; text-indent:13.333px">Weighted average number of common shares outstanding</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=68.4><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=24.4><P style="font-size:2pt">&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 style="border-bottom:3px double #000000" valign=bottom width=24.4><P style="font-size:2pt">&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=37.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=28.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=69.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=66.667><P style="font-size:2pt">&nbsp;</P></TD></TR>
</TABLE>
<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 nine months ended September 30, 2007 &amp; 2006, and from January 1, 2001 to September 30, 2007</B></P>
<P style="margin:0px" align=center><B>(Unaudited)</B></P>
<P style="margin:0px" align=center><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=354.733></TD><TD width=24.4></TD><TD width=66.667></TD><TD width=15.733></TD><TD width=24.4></TD><TD width=54.267></TD><TD width=15.733></TD><TD width=24.4></TD><TD width=90.533></TD></TR>
<TR><TD valign=bottom width=354.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=185.467 colspan=5><P style="line-height:14.667px; margin:0px; font-size:12px" align=center><B>Nine Months Ended <BR>
September 30,</B></P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=114.933 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=354.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=91.067 colspan=2><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=78.667 colspan=2><P style="line-height:14.667px; margin:0px; font-size:12px" align=center><B>2006</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=114.933 colspan=2><P style="line-height:14.667px; margin:0px; font-size:12px" align=center><B>September 30, 2007</B></P>
</TD></TR>
<TR><TD valign=bottom width=354.733><P style="margin:0px">Cash flows from operating activities</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=54.267><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=24.4><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=354.733><P style="margin:0px; text-indent:38.4px">Net income (loss):</P>
</TD><TD valign=bottom width=24.4><P style="margin:0px">$&nbsp;</P>
</TD><TD valign=bottom width=66.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=24.4><P style="margin:0px">$&nbsp;</P>
</TD><TD valign=bottom width=54.267><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=24.4><P style="margin:0px">$&nbsp;</P>
</TD><TD valign=bottom width=90.533><P style="margin:0px" align=right>(560,777)</P>
</TD></TR>
<TR><TD valign=bottom width=354.733><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><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=354.733><P style="margin:0px; text-indent:57.6px">Depreciation and amortization</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><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=354.733><P style="margin:0px; text-indent:57.6px">Loss on sale or abandonment of fixed assets</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><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=354.733><P style="margin:0px; text-indent:57.6px">Change in assets &amp; liabilities</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><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=354.733><P style="margin:0px; text-indent:86.4px">Other current assets</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><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=354.733><P style="margin:0px; text-indent:86.4px">Restricted cash and other assets</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><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=354.733><P style="margin:0px; text-indent:86.4px">Accounts payable</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><P style="margin:0px" align=right>(19,000)</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="margin:0px" align=right>103,976&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=354.733><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=54.267><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=24.4><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)</P>
</TD></TR>
<TR><TD valign=bottom width=354.733><P style="margin:0px; text-indent:38.4px">Net cash used in operating activities</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><P style="margin:0px" align=right>(19,000)</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="margin:0px" align=right>(362,527)</P>
</TD></TR>
<TR><TD valign=bottom width=354.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><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=354.733><P style="margin:0px">Cash flows from investing activities</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><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=354.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><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=354.733><P style="margin:0px; text-indent:57.6px">Proceeds from sale of property and equipment</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><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=354.733><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=54.267><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=24.4><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=354.733><P style="margin:0px; text-indent:38.4px">Net cash provided by investing activities</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><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=354.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><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=354.733><P style="margin:0px">Cash flows from financing activities:</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><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=354.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><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=354.733><P style="margin:0px; text-indent:57.6px">Proceeds from note payable &#150; related party</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><P style="margin:0px" align=right>19,000&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="margin:0px" align=right>19,000&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=354.733><P style="margin:0px; text-indent:57.6px">Principle payments under capital lease obligations</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="margin:0px" align=right>(5,280)</P>
</TD></TR>
<TR><TD valign=bottom width=354.733><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=54.267><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=24.4><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&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=354.733><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=66.667><P style="margin:0px" align=right>19,000&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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=54.267><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=24.4><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>121,897&nbsp;</P>
</TD></TR>
<TR><TD valign=bottom width=354.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><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=354.733><P style="margin:0px; text-indent:38.4px">Net &nbsp;decrease in cash and cash equivalents</P>
</TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=90.533><P style="margin:0px" align=right>(238,370)</P>
</TD></TR>
<TR><TD valign=bottom width=354.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=54.267><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=24.4><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=354.733><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=66.667><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=24.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=54.267><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=24.4><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=354.733><P style="margin:0px">Cash and cash equivalents &#150; end of period</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=24.4><P style="margin:0px">$&nbsp;</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=66.667><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=24.4><P style="margin:0px">$&nbsp;</P>
</TD><TD style="border-bottom:3px double #000000" valign=bottom width=54.267><P style="margin:0px" align=right>--&nbsp;</P>
</TD><TD valign=bottom width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:3px double #000000" valign=bottom width=24.4><P style="margin:0px">$&nbsp;</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"><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" align=center><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">The accompanying financial statements of Docucon, Incorporated should be read in conjunction with the Company&#146;s Annual Report on Form 10-KSB for the year ended December 31, 2006. &nbsp;Significant accounting policies disclosed therein have not changed except as noted below.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">The accompanying financial statements and the related footnote information are unaudited. &nbsp;In the opinion of management, they include all normal recurring adjustments necessary for a fair presentation of the balance sheet of the Company at September 30, 2007, and the results of its operations and cash flows for the three and nine months ended September 30, 2007. &nbsp;Results of operations reported for the interim periods are not necessarily indicative of results for the entire year.</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 development stage in accordance with 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 September 30, 2007, the Company had an aggregate accumulated deficit of approximately $10,632,599 (accumulated deficit of $10,071,822 and accumulated deficit during 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. </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"><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"><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 September 30, 2007.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><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 December 31, 2006 10-KSB previously filed.</P>
<P style="margin:0px"><BR></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"><B><I>Note 3. 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">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 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. &nbsp;As of September 30, 2007, the shares have not been issued in connection with this settlement.</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 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. &nbsp;As of September 30, 2007, the shares have not been issued in connection with this settlement.</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. &nbsp;As of September 30, 2007, the shares have not been issued in connection with this settlement.</P>
<P style="margin:0px"><BR></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 previously disclosed and reported on the Company&#146;s annual reports ended December 31, 2001 through December 31, 2006. The balance owed of $108,334 under both notes payable was settled by the Company on September 30, 2007. &nbsp;Each party agreed to convert amounts owed without interest into 216,668 common shares of the Company. &nbsp;See Note 5 &#147;Preferred stock and common stock&#148;. &nbsp;&nbsp;As of September 30, 2007, the shares have not been issued in connection with this settlement.</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 $19,000 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"><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">For the period ended September 30, 2007, the Company entered into agreements with several parties to retire certain obligations of the Company as follows:</P>
<P style="margin:0px"><BR></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>
<BR>
<BR></P>
<TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=195.6></TD><TD width=17.2></TD><TD width=106.4></TD></TR>
<TR><TD valign=top width=319.2 colspan=3><P style="margin:0px" align=center><B>Shares of Common Stock</B></P>
<P style="margin:0px" align=center><B>To be issued under Settlement Agreements as of &nbsp;<BR>
September &nbsp;30, 2007</B></P>
</TD></TR>
<TR><TD valign=top width=319.2 colspan=3><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=195.6><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=17.2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=106.4><P style="margin:0px" align=center><B>2007</B></P>
</TD></TR>
<TR><TD valign=top width=195.6><P style="margin:0px">Notes Payable<SUP>1</SUP></P>
</TD><TD valign=top width=17.2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=106.4><P style="margin:0px" align=right>216,668&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=195.6><P style="margin:0px">Accounts Payable<SUP>2</SUP></P>
</TD><TD valign=top width=17.2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=106.4><P style="margin:0px" align=right>106,650&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=195.6><P style="margin:0px">Accrued Expenses<SUP>3</SUP></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=17.2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=106.4><P style="margin:0px" align=right>75,668&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=195.6><P style="margin:0px; padding-left:32.4px">Total</P>
</TD><TD valign=top width=17.2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=106.4><P style="margin:0px" align=right>398,986&nbsp;</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><SUP>1</SUP> 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, herein attached as exhibits 10.2 and 10.2</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><SUP>2 </SUP>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 share, for a total of 106,650 common shares, herein attached as exhibits 10.4.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><SUP>3 </SUP>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, herein attached as exhibits 10.2.</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 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. 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. </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 September 30, 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>
<BR></P>
<P style="margin:0px" align=center>9</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"><B><I>Note 7. Income taxes</I></B></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">At September 30, 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 September 30, 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 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 c
ivil 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 September 30, 2007, weighted average common shares outstanding applicable to earnings (loss) per common share were 243,918.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px">For the period ended September 30, 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 September 30, 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">Between October 16 and 17, 2007 the State of Delaware was paid $3,378 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:0px"><BR>
<BR></P>
<P style="margin:0px" align=center>10</P>
<P style="margin:0px"><BR></P>
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<P style="margin:0px; page-break-before:always"><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 previous period ended September 30, 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 September 30, 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></P>
<P style="margin:0px">At September 30, 2007, current liabilities totaled approximately $260,823, primarily made up of short term notes payable, and accounts payables. &nbsp;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 September 30, 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">On September 17, 2007, the Company entered into a promissory note with Mr. Balbirnie in the amount of $19,000 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>
<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; font-family:TimesNewRoman; page-break-before:always"><FONT FACE="TimesNewRoman">Current liabilities which totaled approximately $260,823 at September 30, 2007 include accounts payable, short term notes payable and </FONT><FONT FACE="Times New Roman">compliance and related fees. </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 September 30, 2007, the Company&#146;s total liabilities exceeded its total assets by approximately $260,823.</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 notes to financials and throughout this report, 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>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>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">10.1</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">Settlement Agreement for Payment of Account and Release &#150; Allan Hobgood</P>
</TD></TR>
<TR><TD valign=top width=73.933><P style="margin:0px">10.2</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">Settlement Agreement for Payment of Account and Release - &nbsp;Chauncey Schmidt</P>
</TD></TR>
<TR><TD valign=top width=73.933><P style="margin:0px">10.3</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">Settlement Agreement for Payment of Account and Release &#150; Edward Gistaro</P>
</TD></TR>
<TR><TD valign=top width=73.933><P style="margin:0px">10.4</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">Settlement Agreement for Payment of Account and Release &#150; Schwartz Heslin Group</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>13</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 16, 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>14</P>
<P style="margin:0px"><BR></P>
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<DESCRIPTION>EXHIBIT 10.1
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<TITLE>SETTLEMENT AGREEMENT AND RELEASE</TITLE>
<META NAME="author" CONTENT="Administrator">
<META NAME="date" CONTENT="10/17/2007">
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<P style="margin-top:0px; margin-bottom:26.667px; font-family:Times New Roman Bold" align=right><FONT FACE="Times New Roman Bold"><B>Exhibit 10.1</B></FONT></P>
<P style="margin-top:0px; margin-bottom:26.667px; font-family:Times New Roman Bold" align=center><B><U>SETTLEMENT AGREEMENT FOR PAYMENT OF ACCOUNT AND RELEASE</U></B></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px"><FONT FACE="Times New Roman">This SETTLEMENT AGREEMENT FOR PAYMENT OF ACCOUNT AND RELEASE dated as of September 30</FONT><SUP>th</SUP>, 2007 (this &quot;<U>Settlement Agreement</U>&quot;), by and between Docucon Incorporated, a Delaware corporation (&quot;Docucon&quot;) and allan hobgood an individual residing in the state of South Carolina (&#147;<U>Individual</U>&#148;).</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px">WHEREAS, Docucon desires to satisfy in full any and all amounts due and owing to Individual as of the date of this Agreement, and, subject to the terms and conditions set forth herein, Individual desires to accept shares of the common stock, par value $0.0001 per share (&#147;Common Stock&#148;) of Docucon in full satisfaction of any and all amounts due and owing to Individual, whether known or unknown; and</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px">WHEREAS, without admitting any wrongdoing or liability, or acknowledging the validity of any claim, asserted or unasserted, Docucon and Individual have reached an amicable settlement of any amounts owed in the manner set forth herein.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px">NOW, THEREFORE, in consideration of the mutual covenants contained herein and the other good and valuable consideration as set forth in this Settlement Agreement, the legal adequacy of which is hereby acknowledged, the parties agree as follows:</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">1.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Payment of Account; No Admission of Fault</U>. &nbsp;</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">(a)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px">The total remaining unpaid balance on the note owed by Docucon to Individual, including, but not limited to, any and all services and expenses provided by Individual to Docucon through the date hereof, is for all purposes agreed by the parties to be U.S. $ 37,834 (the &#147;<U>Past Due Balance</U>&#148;). &nbsp;&nbsp;</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">(b)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px">Each of Docucon and Individual acknowledges and agrees that it is entering into this Settlement Agreement in order to settle and resolve any and all matters among them arising out of or in any way relating to the Past Due Balance and any and all agreements between the parties and the transactions contemplated thereby, and each of Docucon and Individual is not admitting any liability on its part in any way relating to such matters, and no inference regarding any such liability is intended by virtue of the parties entering into this Settlement Agreement.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">2.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Share Consideration by Docucon to Individual</U>. Docucon hereby agrees to issue to Individual 75,668 shares of its Common Stock (the &#147;<U>Shares</U>,&#148;), at a valuation of $.50 cent per share. &nbsp;Individual acknowledges and agrees that its name, address, and designation of this settlement shall be included on the Share Certificate. &nbsp;Individual understands and acknowledges that Docucon makes no representations or warranties regarding the future price of the Shares, the current or future value of the Shares, or its current business, operations or financial condition or prospects and, except as expressly set forth in this Settlement Agreement, Individual has not relied on any representations or warranties from Docucon or its representatives in any manner whatsoever.</P>
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<P style="margin-top:0px; margin-bottom:6.667px; page-break-before:always"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">3.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Indemnification by Individual</U>. Upon execution and delivery of this Settlement Agreement, Individual agrees to indemnify, defend, and hold harmless each Docucon Released Party (as defined below) from and against any and all causes of action, claims, damages, liability, actions or causes of action, and demands of whatsoever kind on account of all known, and unknown, injuries, losses, and damages allegedly sustained by a Docucon Released Party to the extent resulting from, arising from, or in any way connected with any and all claims against Docucon that are or could be made by Individual, including without limitation, claims relating to, or in connection with, the Past Due Balance (it being understood that Docucon and Individual intend all such claims to have been resolved and settled pursuant to this Settlement Agreement). &nbsp;Immediately upon execution and delivery of this Settlement Agreement, Individual shall forebear and suspend 
any legal, equitable or other actions against Docucon for collection of the Past Due Balance.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">4.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Release by Individual</U>. Upon execution and delivery of this Settlement Agreement, Individual, for itself and on behalf of its subsidiaries and affiliates, hereby releases and forever discharges Docucon, together with its subsidiaries, affiliates, successors and assigns, as well as its present and former directors, officers, employees, shareholders, agents, attorneys and other representatives and the successors, assigns and personal representatives of each of them (each, a &quot;<U>Docucon Released Party</U>&quot;), from any and all claims, suits, debts, liens, liabilities, losses, causes of action, rights, damages (whether actual, compensatory, consequential or punitive), demands, obligations, promises, costs and expenses (including, without limitation, attorneys' fees and expenses and the fees and expenses of other professionals and experts) of every kind, nature and description, whether in law or in equity, whether known or unknown, 
or known in the future, fixed or contingent, billed or unbilled, suspected, disclosed or undisclosed, claimed or concealed, from the beginning of time through the date of this Settlement Agreement, which Individual, for itself and subsidiaries and affiliates, could assert against any Docucon Released Party relating to or arising out of any and all agreements between the parties, the transactions contemplated thereby, the Past Due Balance, or otherwise.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">5.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Waiver</U>. Each of Docucon and Individual hereby waives and assumes the risk of any and all claims for loss and damages which exist as of the date hereof, including but not limited to those set forth in this Settlement Agreement but of which they are unaware, whether through ignorance, oversight, error, negligence, or otherwise in which, if known, would materially affect their decision to enter into this Settlement Agreement. &nbsp;Each of Docucon and Individual hereby expressly assume the risk that they may suffer damages in the future as a result of any matter referred to herein, and they hereby waive all rights or benefits which they have now, or in the future may have, under any applicable law. &nbsp;Each of Docucon and Individual acknowledge that there is a risk of the damages which they believe they have suffered or will suffer may turn out to be other than or greater than those now known, suspected, or believed to be true. &nbsp;I
n addition, the cost and damages they have incurred or have suffered may be greater than or other than those known now. &nbsp;Facts on which they have been relying in entering into this Settlement Agreement may later turn out to be other than or different from those now known, suspected or believed to be true. &nbsp;Each of Docucon and Individual acknowledge that in entering into this Settlement Agreement, they have expressed that they agree to accept the risk of any such possible unknown damages, claims, facts, demands, actions, and causes of action. &nbsp;Each of Docucon and Individual acknowledge and present that in waiving all rights and benefits they may have as set forth herein, they have had the advice, or have had the opportunity to have the advice, of counsel and independent consultants and further represent, warrant, and guarantee that this Settlement Agreement shall remain in full force and effect notwithstanding current and such possible changes or differences of material fact. &nbsp;This relief 
shall apply to any and all claims other than for breach of this Settlement Agreement.</P>
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<P style="margin-top:0px; margin-bottom:13.333px" align=center>2</P>
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<P style="margin-top:0px; margin-bottom:6.667px; page-break-before:always">&nbsp;</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">6.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Representations, Warranties and Covenants of Docucon</U>. &nbsp;Docucon hereby represents and warrants to Individual as follows:</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(a)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">Docucon has the corporate power and authority to execute, deliver and perform this Settlement Agreement.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(b)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">The execution, delivery and performance of this Settlement Agreement has been duly authorized by Docucon in accordance with all requisite corporate power and authority.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(c)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">This Settlement Agreement constitutes a legal, valid and binding obligation of Docucon, enforceable against Docucon in accordance with its terms, except as enforcement may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws of general applicability affecting the enforcement of creditors' rights and (ii) the application of principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law).</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(d)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">The execution, delivery and performance of this Settlement Agreement by Docucon does not (i) violate or contravene the certificate of incorporation or by-laws of Docucon; (ii) violate or constitute a breach of, or default under, any material agreement or other instrument binding upon Docucon or to which it is a party; (iii) violate or contravene any judgment, decree or order of any court or regulatory body binding upon Docucon; or (iv) violate any law or regulation applicable to Docucon.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">7.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Representations, Warranties and Covenants of Individual</U>. &nbsp;Individual hereby represents and warrants to Docucon as follows:</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(a)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">Individual has the corporate power and authority to execute, deliver and perform this Settlement Agreement.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(b)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">The execution, delivery and performance of this Settlement Agreement has been duly authorized by Individual in accordance with all requisite corporate power and authority.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(c)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">Individual has received independent legal advice from attorneys of its choice with respect to the terms and provisions of this Settlement Agreement, the advisability of entering into this Settlement Agreement and of the consequences of entering into this Settlement Agreement.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(d)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">This Settlement Agreement constitutes a legal, valid and binding obligation of Individual, enforceable in accordance with its terms against Individual, except as such enforcement may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws of general applicability affecting the enforcement of creditors' rights and (ii) the application of general principles of equity (regardless of whether considered in a proceeding in equity or at law). &nbsp;</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(e)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">The execution, delivery and performance of this Settlement Agreement by Individual does not (i) violate or contravene the certificate of incorporation of Individual; (ii) violate or constitute a breach of, or default under, any material agreement or other instrument binding upon Individual or to which it is a party; (iii) violate or contravene any judgment, decree or order of any court or regulatory body binding upon Individual; or (iv) violate any law or regulation applicable to Individual.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(f)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">Individual is an &quot;accredited investor&quot;, which is defined under Rule 501(a)(3) of the Securities Act of 1933, as amended (the &quot;Act&quot;), has the financial sophistication and knowledge to accept the Shares and understands the risk of an entire loss of investment in the Shares; </P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(g)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">Individual is acquiring the Shares for its own account and for investment purposes only; and</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">8.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Ownership of Claims</U>. &nbsp;Individual represents and warrants to Docucon that it is the lawful and sole owner of the claims being released, and that the claim for the amounts owed are greater than two (2) years </P>
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<P style="margin-top:0px; margin-bottom:13.333px" align=center>3</P>
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<P style="margin-top:0px; margin-bottom:6.667px; page-break-before:always">by it pursuant to this Settlement Agreement and it has not sold, transferred, assigned, pledged, hypothecated or otherwise encumbered any such claim. &nbsp;</P>
<A NAME="a_Toc470921791"></A><P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">9.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Governing Law</U>. &nbsp;This Settlement Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be performed in said State, without regard to any of its principles of <A NAME="a_Toc470921792"></A>conflicts of laws or other laws, which would result in the application of the laws of another jurisdiction. &nbsp;This Settlement Agreement shall be construed and interpreted without regard to any presumption against the party causing this Settlement Agreement to be drafted.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">10.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Notices</U>. &nbsp;All notices, demands, consents, instructions and other communications to be given or delivered or permitted under or by reason of the provisions of this Settlement Agreement or in connection with the transactions contemplated<A NAME="a_Toc469820201"></A> hereby shall be in writing and shall be deemed to be delivered and received by the intended recipient as follows: &nbsp;(i) if <A NAME="a_Toc470663115"></A>personally delivered, on the business day of such delivery (as evidenced by the receipt of the personal delivery service), (ii) if mailed certified or registered mail return receipt requested (with all costs having been prepaid), four (4) business days after being mailed, (iii) if delivered by an overnight courier of recognized international reputation (with all charges having been prepaid), on the business day of such delivery (as evidenced by the receipt of the overnight courier service), or (iv) if delivered by f
acsimile transmission, on the business day of such delivery if sent by 5:00 p.m. in the time zone of the recipient, or if sent after that time, on the next succeeding business day (as evidenced by the printed confirmation of delivery generated by the sending party's telecopier machine). &nbsp;If any notice, demand, consent, instruction or other communication cannot be delivered because of a changed address of which no notice was given (in accordance with this Section 10), or the refusal to accept same, the notice, demand, consent, instruction or other communication shall be deemed received on the second business day after the notice is sent (as evidenced by a sworn affidavit of the sender). &nbsp;All such notices, demands, consents, instructions and other communications will be sent to the following addresses or facsimile numbers as applicable:</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">if to Docucon:</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">C/O &#150; Independent Directors Office</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">201 Shannon Oaks Circle &#150; Suite 105</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">Cary NC 27511</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">Attention: Board of Directors </P>
<P style="margin-top:0px; margin-bottom:6.667px"><BR></P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">with a copy to individual: &nbsp;</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:96px">allan hobgood<BR>
__________________________</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">__________________________</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">__________________________<BR>
</P>
<P style="margin-top:0px; margin-bottom:6.667px">or to such other address as any party may specify by notice given to the other party in accordance with this Section 10.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">11.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Arbitration</U>. &nbsp;Any disagreement, dispute, controversy or claim arising out of or relating to this Settlement Agreement shall be submitted to binding arbitration before the American Arbitration Association (&#147;AAA&#148;), in accordance with its rules of Commercial Arbitration. &nbsp;The decision of the arbitrator shall be final and binding upon the parties, and it may be entered in any court of competent jurisdiction. &nbsp;The arbitration shall take place in County, New York. &nbsp;The arbitrator shall be bound by the laws of the State of New York applicable to all relevant privileges and the attorney work product doctrine. &nbsp;Each party shall be required to provide the other party with copies of all documentation and other written, electronic or photographic materials that it intends to introduce into evidence at least ten (10) days in advance of the hearing date. &nbsp;The arbitrator shall have the power to grant equitabl
e relief where applicable under New York law. &nbsp;The arbitrator shall issue a written opinion setting forth his or her decision and the reasons therefor within thirty (30) days after the arbitration proceeding is concluded. &nbsp;The </P>
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<P style="margin-top:0px; margin-bottom:13.333px" align=center>4</P>
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<P style="margin-top:0px; margin-bottom:13.333px; page-break-before:always">obligation of the parties to submit any dispute arising under or related to this Settlement Agreement to arbitration as provided in this Section 11 shall survive the expiration or earlier termination of this Settlement Agreement. &nbsp;Notwithstanding the foregoing, a party may seek an injunction or other appropriate relief from a court of competent jurisdiction to preserve or protect the status quo with respect to any matter pending conclusion of the arbitration proceeding, but no such application to a court shall in any way be permitted to stay or otherwise impede the progress of the arbitration proceeding. &nbsp;Each party shall pay its own costs (including, without limitation, attorney&#146;s fees and disbursements) and expenses in connection with any arbitration proceeding; <U>provided</U>, <U>however</U>, the prevailing party shall be entitled to recover its reasonable attorney&#146;s fees and disbursements. &nbsp;&nbsp;Each of
 Docucon and Individual hereby consent to the jurisdiction of the AAA in the State of New York for the purpose of any arbitration arising out of any of their obligations arising hereunder.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">12.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Miscellaneous</U>. &nbsp;(a) &nbsp;No party may assign any of its rights or delegate any of its duties under this Settlement Agreement without the prior written consent of the other parties hereto; <U>provided</U>, <U>however</U>, that Docucon may assign any of its rights or delegate any of its duties hereunder, by operation of law or otherwise, or in connection with a Change of Control (as defined below) and, following such Change of Control, this Settlement Agreement shall be enforceable by, among others, any direct or indirect parent or affiliate of Docucon or any direct or indirect holder of greater than 50% of the voting capital stock of Docucon. &nbsp;This Settlement Agreement shall be binding upon the successors and their respective representatives, subsidiaries, affiliates, successors, and permitted assigns of the parties and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Fo
r purposes of this Settlement Agreement, a Change of Control shall be deemed to have occurred in any of the following events: &nbsp;(i) a merger of Docucon with or into another entity (whether or not Docucon is the surviving corporation) resulting in a change of ownership of greater than 50% of the outstanding voting capital stock of Docucon; (ii) a tender offer by a third party resulting in a change of ownership of not less than 50% of the outstanding voting capital stock of Docucon; or (iii) the sale of all or substantially all of the assets of Docucon to a third party.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">(b)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px">Except as specifically provided in Sections 3 and 4 of this Settlement Agreement, no party other than Docucon and Individual shall be deemed intended or incidental beneficiaries of this Settlement Agreement; <U>provided</U>, <U>however</U>, that a party (a &#147;<U>Potential Acquiror</U>&#148;) who enters into a definitive agreement with Docucon to engage in a transaction with Docucon which contemplates a Change of Control shall be deemed an intended third party beneficiary of this Settlement Agreement, including, without limitation, all of the representations, warranties and covenants contained herein, and shall be entitled to enforce this Settlement Agreement to the same extent as if the Potential Acquiror was a party hereto. </P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:144px; text-indent:-48px">(c)</P>
<P style="margin:0px; padding-left:144px">The provisions of this Settlement Agreement shall not be construed as a waiver of any party's right to commence arbitration proceedings under Section 11 to enforce the terms and provisions of this Settlement Agreement.</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:144px; text-indent:-48px">(d)</P>
<P style="margin:0px; padding-left:144px">This Settlement Agreement contains a complete statement of all the arrangements, understandings and agreements among the parties with respect to the subject matter hereof, supersedes all other arrangements, understandings and agreements, whether written or oral, among them relating to such subject matter, all of which are merged herein. &nbsp;This Settlement Agreement cannot be altered, modified, waived or amended, except by an instrument in writing executed by each of the parties hereto.</P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:144px; text-indent:-48px">(e)</P>
<P style="margin:0px; padding-left:144px">Section headings contained in this Settlement Agreement are included herein solely for convenience of reference only and are not intended to affect the interpretation or construction of any of the terms or provisions of this Settlement Agreement.</P>
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<P style="margin-top:0px; margin-bottom:-16px; padding-left:144px; text-indent:-48px">(f)</P>
<P style="margin:0px; padding-left:144px">This Settlement Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which, when taken together shall constitute one and the same instrument. &nbsp;The facsimile signature of a party hereto shall constitute a valid and effective signature.</P>
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<P style="margin-top:0px; margin-bottom:13.333px" align=center>5</P>
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<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px; page-break-before:always">IN WITNESS WHEREOF each of the parties has duly executed this Settlement Agreement as of the date first above written.</P>
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<P style="margin-top:0px; margin-bottom:26.667px; padding-left:264px">DOCUCON INCORPORATED </P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:264px">By: <U>/s/ Robert Schwartz</U></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:264px">Name: Robert Schwartz</P>
<P style="margin-top:0px; margin-bottom:26.667px; padding-left:216px; text-indent:48px">Title: Chief Executive Officer</P>
<P style="margin:0px; padding-left:264px">INDIVIDUAL</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:264px">By: <U>/s/ Allan Hobgood</U></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:216px; text-indent:48px">Name: Allan Hobgood</P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:264px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
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<P style="margin-top:0px; margin-bottom:13.333px" align=center>6</P>
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<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>ex102.htm
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
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<TITLE>SETTLEMENT AGREEMENT AND RELEASE</TITLE>
<META NAME="author" CONTENT="Administrator">
<META NAME="date" CONTENT="10/17/2007">
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<P style="margin-top:0px; margin-bottom:26.667px" align=right><B>Exhibit 10.2</B></P>
<P style="margin-top:0px; margin-bottom:26.667px" align=center><B><U>SETTLEMENT AGREEMENT FOR PAYMENT OF ACCOUNT AND RELEASE</U></B></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px">This SETTLEMENT AGREEMENT FOR PAYMENT OF ACCOUNT AND RELEASE dated as of September 30<SUP>th</SUP>, 2007 (this &quot;<U>Settlement Agreement</U>&quot;), by and between Docucon Incorporated, a Delaware corporation (&quot;Docucon&quot;) and Chauncey Schmidt an individual residing in the state of Texas (&#147;<U>Individual</U>&#148;).</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px">WHEREAS, Docucon desires to satisfy in full any and all amounts due and owing to Individual as of the date of this Agreement, and, subject to the terms and conditions set forth herein, Individual desires to accept shares of the common stock, par value $0.0001 per share (&#147;Common Stock&#148;) of Docucon in full satisfaction of any and all amounts due and owing to Individual, whether known or unknown; and</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px">WHEREAS, without admitting any wrongdoing or liability, or acknowledging the validity of any claim, asserted or unasserted, Docucon and Individual have reached an amicable settlement of any amounts owed in the manner set forth herein.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px">NOW, THEREFORE, in consideration of the mutual covenants contained herein and the other good and valuable consideration as set forth in this Settlement Agreement, the legal adequacy of which is hereby acknowledged, the parties agree as follows:</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">1.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Payment of Account; No Admission of Fault</U>. &nbsp;</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">(a)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px">The total remaining unpaid balance on the note owed by Docucon to Individual, including, but not limited to, any and all services and expenses provided by Individual to Docucon through the date hereof, is for all purposes agreed by the parties to be U.S. $54,167 (the &#147;<U>Past Due Balance</U>&#148;). &nbsp;&nbsp;</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">(b)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px">Each of Docucon and Individual acknowledges and agrees that it is entering into this Settlement Agreement in order to settle and resolve any and all matters among them arising out of or in any way relating to the Past Due Balance and any and all agreements between the parties and the transactions contemplated thereby, and each of Docucon and Individual is not admitting any liability on its part in any way relating to such matters, and no inference regarding any such liability is intended by virtue of the parties entering into this Settlement Agreement.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">2.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Share Consideration by Docucon to Individual</U>. Docucon hereby agrees to issue to Individual 108,334 shares of its Common Stock (the &#147;<U>Shares</U>,&#148;), at a valuation of $.50 cent per share. &nbsp;Individual acknowledges and agrees that its name, address, and designation of this settlement shall be included on the Share Certificate. &nbsp;Individual understands and acknowledges that Docucon makes no representations or warranties regarding the future price of the Shares, the current or future value of the Shares, or its current business, operations or financial condition or prospects and, except as expressly set forth in this Settlement Agreement, Individual has not relied on any representations or warranties from Docucon or its representatives in any manner whatsoever. &nbsp;</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">3.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Indemnification by Individual</U>. Upon execution and delivery of this Settlement Agreement, Individual agrees to indemnify, defend, and hold harmless each Docucon Released Party (as defined below) from and against any and all causes of action, claims, damages, liability, actions or causes of action, and demands of whatsoever kind on account of all known, and unknown, injuries, losses, and damages allegedly sustained by a Docucon Released Party to the extent resulting from, arising from, or in any way connected with any and all claims against Docucon that are or could be made by Individual, including without limitation, claims relating to, or in connection with, the Past Due Balance (it being understood that Docucon and Individual intend all such claims to have been resolved and settled pursuant to this Settlement Agreement). &nbsp;Immediately upon execution and delivery of this Settlement Agreement, Individual shall forebear and suspend 
any legal, equitable or other actions against Docucon for collection of the Past Due Balance.</P>
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<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px; page-break-before:always">4.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Release by Individual</U>. Upon execution and delivery of this Settlement Agreement, Individual, for itself and on behalf of its subsidiaries and affiliates, hereby releases and forever discharges Docucon, together with its subsidiaries, affiliates, successors and assigns, as well as its present and former directors, officers, employees, shareholders, agents, attorneys and other representatives and the successors, assigns and personal representatives of each of them (each, a &quot;<U>Docucon Released Party</U>&quot;), from any and all claims, suits, debts, liens, liabilities, losses, causes of action, rights, damages (whether actual, compensatory, consequential or punitive), demands, obligations, promises, costs and expenses (including, without limitation, attorneys' fees and expenses and the fees and expenses of other professionals and experts) of every kind, nature and description, whether in law or in equity, whether known or unknown, 
or known in the future, fixed or contingent, billed or unbilled, suspected, disclosed or undisclosed, claimed or concealed, from the beginning of time through the date of this Settlement Agreement, which Individual, for itself and subsidiaries and affiliates, could assert against any Docucon Released Party relating to or arising out of any and all agreements between the parties, the transactions contemplated thereby, the Past Due Balance, or otherwise.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">5.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Waiver</U>. Each of Docucon and Individual hereby waives and assumes the risk of any and all claims for loss and damages which exist as of the date hereof, including but not limited to those set forth in this Settlement Agreement but of which they are unaware, whether through ignorance, oversight, error, negligence, or otherwise in which, if known, would materially affect their decision to enter into this Settlement Agreement. &nbsp;Each of Docucon and Individual hereby expressly assume the risk that they may suffer damages in the future as a result of any matter referred to herein, and they hereby waive all rights or benefits which they have now, or in the future may have, under any applicable law. &nbsp;Each of Docucon and Individual acknowledge that there is a risk of the damages which they believe they have suffered or will suffer may turn out to be other than or greater than those now known, suspected, or believed to be true. &nbsp;I
n addition, the cost and damages they have incurred or have suffered may be greater than or other than those known now. &nbsp;Facts on which they have been relying in entering into this Settlement Agreement may later turn out to be other than or different from those now known, suspected or believed to be true. &nbsp;Each of Docucon and Individual acknowledge that in entering into this Settlement Agreement, they have expressed that they agree to accept the risk of any such possible unknown damages, claims, facts, demands, actions, and causes of action. &nbsp;Each of Docucon and Individual acknowledge and present that in waiving all rights and benefits they may have as set forth herein, they have had the advice, or have had the opportunity to have the advice, of counsel and independent consultants and further represent, warrant, and guarantee that this Settlement Agreement shall remain in full force and effect notwithstanding current and such possible changes or differences of material fact. &nbsp;This relief 
shall apply to any and all claims other than for breach of this Settlement Agreement. </P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">6.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Representations, Warranties and Covenants of Docucon</U>. &nbsp;Docucon hereby represents and warrants to Individual as follows:</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(a)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">Docucon has the corporate power and authority to execute, deliver and perform this Settlement Agreement.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(b)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">The execution, delivery and performance of this Settlement Agreement has been duly authorized by Docucon in accordance with all requisite corporate power and authority.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(c)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">This Settlement Agreement constitutes a legal, valid and binding obligation of Docucon, enforceable against Docucon in accordance with its terms, except as enforcement may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws of general applicability affecting the enforcement of creditors' rights and (ii) the application of principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law).</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(d)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">The execution, delivery and performance of this Settlement Agreement by Docucon does not (i) violate or contravene the certificate of incorporation or by-laws of Docucon; (ii) violate or constitute a breach of, or default under, any material agreement or other instrument binding upon Docucon or to which it is a party; (iii) violate or contravene any judgment, decree or order of any court or regulatory body binding upon Docucon; or (iv) violate any law or regulation applicable to Docucon.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">7.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Representations, Warranties and Covenants of Individual</U>. &nbsp;Individual hereby represents and warrants to Docucon as follows:</P>
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<P style="margin-top:0px; margin-bottom:13.333px" align=center>2</P>
<P style="margin-top:0px; margin-bottom:10.667px"><BR></P>
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<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px; page-break-before:always">(a)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">Individual has the corporate power and authority to execute, deliver and perform this Settlement Agreement.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(b)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">The execution, delivery and performance of this Settlement Agreement has been duly authorized by Individual in accordance with all requisite corporate power and authority.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(c)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">Individual has received independent legal advice from attorneys of its choice with respect to the terms and provisions of this Settlement Agreement, the advisability of entering into this Settlement Agreement and of the consequences of entering into this Settlement Agreement.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(d)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">This Settlement Agreement constitutes a legal, valid and binding obligation of Individual, enforceable in accordance with its terms against Individual, except as such enforcement may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws of general applicability affecting the enforcement of creditors' rights and (ii) the application of general principles of equity (regardless of whether considered in a proceeding in equity or at law). &nbsp;</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(e)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">The execution, delivery and performance of this Settlement Agreement by Individual does not (i) violate or contravene the certificate of incorporation of Individual; (ii) violate or constitute a breach of, or default under, any material agreement or other instrument binding upon Individual or to which it is a party; (iii) violate or contravene any judgment, decree or order of any court or regulatory body binding upon Individual; or (iv) violate any law or regulation applicable to Individual.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(f)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">Individual is an &quot;accredited investor&quot;, which is defined under Rule 501(a)(3) of the Securities Act of 1933, as amended (the &quot;Act&quot;), has the financial sophistication and knowledge to accept the Shares and understands the risk of an entire loss of investment in the Shares; </P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(g)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">Individual is acquiring the Shares for its own account and for investment purposes only; and</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">8.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Ownership of Claims</U>. &nbsp;Individual represents and warrants to Docucon that it is the lawful and sole owner of the claims being released, and that the claim for the amounts owed are greater than two (2) years by it pursuant to this Settlement Agreement and it has not sold, transferred, assigned, pledged, hypothecated or otherwise encumbered any such claim. &nbsp;</P>
<A NAME="a_Toc470921791"></A><P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">9.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Governing Law</U>. &nbsp;This Settlement Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be performed in said State, without regard to any of its principles of <A NAME="a_Toc470921792"></A>conflicts of laws or other laws, which would result in the application of the laws of another jurisdiction. &nbsp;This Settlement Agreement shall be construed and interpreted without regard to any presumption against the party causing this Settlement Agreement to be drafted.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">10.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Notices</U>. &nbsp;All notices, demands, consents, instructions and other communications to be given or delivered or permitted under or by reason of the provisions of this Settlement Agreement or in connection with the transactions contemplated<A NAME="a_Toc469820201"></A> hereby shall be in writing and shall be deemed to be delivered and received by the intended recipient as follows: &nbsp;(i) if <A NAME="a_Toc470663115"></A>personally delivered, on the business day of such delivery (as evidenced by the receipt of the personal delivery service), (ii) if mailed certified or registered mail return receipt requested (with all costs having been prepaid), four (4) business days after being mailed, (iii) if delivered by an overnight courier of recognized international reputation (with all charges having been prepaid), on the business day of such delivery (as evidenced by the receipt of the overnight courier service), or (iv) if delivered by f
acsimile transmission, on the business day of such delivery if sent by 5:00 p.m. in the time zone of the recipient, or if sent after that time, on the next succeeding business day (as evidenced by the printed confirmation of delivery generated by the sending party's telecopier machine). &nbsp;If any notice, demand, consent, instruction or other communication cannot be delivered because of a changed address of which no notice was given (in accordance with this Section 10), or the refusal to accept same, the notice, demand, consent, instruction or other communication shall be deemed received on the second business day after the notice is sent (as evidenced by a sworn affidavit of the sender). &nbsp;All such notices, demands, consents, instructions and other communications will be sent to the following addresses or facsimile numbers as applicable:</P>
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<P style="margin-top:0px; margin-bottom:13.333px" align=center>3</P>
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<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px; page-break-before:always">if to Docucon:</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">C/O &#150; Independent Directors Office</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">201 Shannon Oaks Circle &#150; Suite 105</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">Cary NC 27511</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">Attention: Board of Directors </P>
<P style="margin-top:0px; margin-bottom:6.667px"><BR></P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">with a copy to individual: &nbsp;</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:96px">Chauncey Schmidt <BR>
__________________________</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">__________________________</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">__________________________<BR>
</P>
<P style="margin-top:0px; margin-bottom:6.667px">or to such other address as any party may specify by notice given to the other party in accordance with this Section 10.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">11.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Arbitration</U>. &nbsp;Any disagreement, dispute, controversy or claim arising out of or relating to this Settlement Agreement shall be submitted to binding arbitration before the American Arbitration Association (&#147;AAA&#148;), in accordance with its rules of Commercial Arbitration. &nbsp;The decision of the arbitrator shall be final and binding upon the parties, and it may be entered in any court of competent jurisdiction. &nbsp;The arbitration shall take place in County, New York. &nbsp;The arbitrator shall be bound by the laws of the State of New York applicable to all relevant privileges and the attorney work product doctrine. &nbsp;Each party shall be required to provide the other party with copies of all documentation and other written, electronic or photographic materials that it intends to introduce into evidence at least ten (10) days in advance of the hearing date. &nbsp;The arbitrator shall have the power to grant equitabl
e relief where applicable under New York law. &nbsp;The arbitrator shall issue a written opinion setting forth his or her decision and the reasons therefor within thirty (30) days after the arbitration proceeding is concluded. &nbsp;The obligation of the parties to submit any dispute arising under or related to this Settlement Agreement to arbitration as provided in this Section 11 shall survive the expiration or earlier termination of this Settlement Agreement. &nbsp;Notwithstanding the foregoing, a party may seek an injunction or other appropriate relief from a court of competent jurisdiction to preserve or protect the status quo with respect to any matter pending conclusion of the arbitration proceeding, but no such application to a court shall in any way be permitted to stay or otherwise impede the progress of the arbitration proceeding. &nbsp;Each party shall pay its own costs (including, without limitation, attorney&#146;s fees and disbursements) and expenses in connection with any arbitration proceedi
ng; <U>provided</U>, <U>however</U>, the prevailing party shall be entitled to recover its reasonable attorney&#146;s fees and disbursements. &nbsp;&nbsp;Each of Docucon and Individual hereby consent to the jurisdiction of the AAA in the State of New York for the purpose of any arbitration arising out of any of their obligations arising hereunder.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">12.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Miscellaneous</U>. &nbsp;(a) &nbsp;No party may assign any of its rights or delegate any of its duties under this Settlement Agreement without the prior written consent of the other parties hereto; <U>provided</U>, <U>however</U>, that Docucon may assign any of its rights or delegate any of its duties hereunder, by operation of law or otherwise, or in connection with a Change of Control (as defined below) and, following such Change of Control, this Settlement Agreement shall be enforceable by, among others, any direct or indirect parent or affiliate of Docucon or any direct or indirect holder of greater than 50% of the voting capital stock of Docucon. &nbsp;This Settlement Agreement shall be binding upon the successors and their respective representatives, subsidiaries, affiliates, successors, and permitted assigns of the parties and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Fo
r purposes of this Settlement Agreement, a Change of Control shall be deemed to have occurred in any of the following events: &nbsp;(i) a merger of Docucon with or into another entity (whether or not Docucon is the surviving corporation) resulting in a change of ownership of greater than 50% of the outstanding voting capital stock of Docucon; (ii) a tender offer by a third party resulting in a change of ownership of not less than 50% of the outstanding voting capital stock of Docucon; or (iii) the sale of all or substantially all of the assets of Docucon to a third party.</P>
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<P style="margin-top:0px; margin-bottom:13.333px" align=center>4</P>
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<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px; page-break-before:always">(b)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px">Except as specifically provided in Sections 3 and 4 of this Settlement Agreement, no party other than Docucon and Individual shall be deemed intended or incidental beneficiaries of this Settlement Agreement; <U>provided</U>, <U>however</U>, that a party (a &#147;<U>Potential Acquiror</U>&#148;) who enters into a definitive agreement with Docucon to engage in a transaction with Docucon which contemplates a Change of Control shall be deemed an intended third party beneficiary of this Settlement Agreement, including, without limitation, all of the representations, warranties and covenants contained herein, and shall be entitled to enforce this Settlement Agreement to the same extent as if the Potential Acquiror was a party hereto. </P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:144px; text-indent:-48px">(c)</P>
<P style="margin:0px; padding-left:144px">The provisions of this Settlement Agreement shall not be construed as a waiver of any party's right to commence arbitration proceedings under Section 11 to enforce the terms and provisions of this Settlement Agreement.</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:144px; text-indent:-48px">(d)</P>
<P style="margin:0px; padding-left:144px">This Settlement Agreement contains a complete statement of all the arrangements, understandings and agreements among the parties with respect to the subject matter hereof, supersedes all other arrangements, understandings and agreements, whether written or oral, among them relating to such subject matter, all of which are merged herein. &nbsp;This Settlement Agreement cannot be altered, modified, waived or amended, except by an instrument in writing executed by each of the parties hereto.</P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:144px; text-indent:-48px">(e)</P>
<P style="margin:0px; padding-left:144px">Section headings contained in this Settlement Agreement are included herein solely for convenience of reference only and are not intended to affect the interpretation or construction of any of the terms or provisions of this Settlement Agreement.</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:144px; text-indent:-48px">(f)</P>
<P style="margin:0px; padding-left:144px">This Settlement Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which, when taken together shall constitute one and the same instrument. &nbsp;The facsimile signature of a party hereto shall constitute a valid and effective signature.</P>
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<P style="margin-top:0px; margin-bottom:13.333px" align=center>5</P>
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<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px; page-break-before:always" align=justify>IN WITNESS WHEREOF each of the parties has duly executed this Settlement Agreement as of the date first above written.</P>
<P style="margin-top:0px; margin-bottom:13.333px"><BR></P>
<P style="margin-top:0px; margin-bottom:26.667px; padding-left:264px">DOCUCON INCORPORATED </P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:264px">By: <U>/s/ Robert Schwartz </U></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:264px">Name:</P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:264px; text-indent:72px">Robert Schwartz</P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:264px">Title:</P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:264px; text-indent:72px">Chief Executive Officer</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:264px">INDIVIDUAL</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:264px">By: <U>/s/ Chauncey Schmidt</U></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:264px">Name: Chauncey Schmidt</P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:264px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
<P style="margin-top:0px; margin-bottom:13.333px"><BR>
<BR></P>
<P style="margin-top:0px; margin-bottom:13.333px" align=center>6</P>
<P style="margin-top:0px; margin-bottom:10.667px"><BR></P>
<P style="margin-top:0px; margin-bottom:14.667px"><BR></P>
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<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>ex103.htm
<DESCRIPTION>EXHIBIT 10.3
<TEXT>
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<TITLE>SETTLEMENT AGREEMENT AND RELEASE</TITLE>
<META NAME="author" CONTENT="Administrator">
<META NAME="date" CONTENT="10/17/2007">
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<P style="margin-top:0px; margin-bottom:14.667px"><BR></P>
<P style="margin-top:0px; margin-bottom:26.667px; font-family:Times New Roman Bold" align=right><FONT FACE="Times New Roman Bold"><B>Exhibit 10.3</B></FONT></P>
<P style="margin-top:0px; margin-bottom:26.667px; font-family:Times New Roman Bold" align=center><B><U>SETTLEMENT AGREEMENT FOR PAYMENT OF ACCOUNT AND RELEASE</U></B></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px"><FONT FACE="Times New Roman">This SETTLEMENT AGREEMENT FOR PAYMENT OF ACCOUNT AND RELEASE dated as of September 30</FONT><SUP>th</SUP>, 2007 (this &quot;<U>Settlement Agreement</U>&quot;), by and between Docucon Incorporated, a Delaware corporation (&quot;Docucon&quot;) and Edward Gistaro an individual residing in the state of TEXAS (&#147;<U>Individual</U>&#148;).</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px">WHEREAS, Docucon desires to satisfy in full any and all amounts due and owing to Individual as of the date of this Agreement, and, subject to the terms and conditions set forth herein, Individual desires to accept shares of the common stock, par value $0.0001 per share (&#147;Common Stock&#148;) of Docucon in full satisfaction of any and all amounts due and owing to Individual, whether known or unknown; and</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px">WHEREAS, without admitting any wrongdoing or liability, or acknowledging the validity of any claim, asserted or unasserted, Docucon and Individual have reached an amicable settlement of any amounts owed in the manner set forth herein.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px">NOW, THEREFORE, in consideration of the mutual covenants contained herein and the other good and valuable consideration as set forth in this Settlement Agreement, the legal adequacy of which is hereby acknowledged, the parties agree as follows:</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">1.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Payment of Account; No Admission of Fault</U>. &nbsp;</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">(a)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px">The total remaining unpaid balance on the note owed by Docucon to Individual, including, but not limited to, any and all services and expenses provided by Individual to Docucon through the date hereof, is for all purposes agreed by the parties to be U.S. $54,167 (the &#147;<U>Past Due Balance</U>&#148;). &nbsp;&nbsp;</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">(b)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px">Each of Docucon and Individual acknowledges and agrees that it is entering into this Settlement Agreement in order to settle and resolve any and all matters among them arising out of or in any way relating to the Past Due Balance and any and all agreements between the parties and the transactions contemplated thereby, and each of Docucon and Individual is not admitting any liability on its part in any way relating to such matters, and no inference regarding any such liability is intended by virtue of the parties entering into this Settlement Agreement.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">2.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Share Consideration by Docucon to Individual</U>. Docucon hereby agrees to issue to Individual 108,334 shares of its Common Stock (the &#147;<U>Shares</U>,&#148;), at a valuation of $.50 cent per share. &nbsp;Individual acknowledges and agrees that its name, address, and designation of this settlement shall be included on the Share Certificate. &nbsp;Individual understands and acknowledges that Docucon makes no representations or warranties regarding the future price of the Shares, the current or future value of the Shares, or its current business, operations or financial condition or prospects and, except as expressly set forth in this Settlement Agreement, Individual has not relied on any representations or warranties from Docucon or its representatives in any manner whatsoever. &nbsp;</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">3.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Indemnification by Individual</U>. Upon execution and delivery of this Settlement Agreement, Individual agrees to indemnify, defend, and hold harmless each Docucon Released Party (as defined below) from and against any and all causes of action, claims, damages, liability, actions or causes of action, and demands of whatsoever kind on account of all known, and unknown, injuries, losses, and damages allegedly sustained by a Docucon Released Party to the extent resulting from, arising from, or in any way connected with any and all claims against Docucon that are or could be made by Individual, including without limitation, claims relating to, or in connection with, the Past Due Balance (it being understood that Docucon and Individual intend all such claims to have been resolved and settled pursuant to this Settlement Agreement). &nbsp;Immediately upon execution and delivery of this Settlement Agreement, Individual shall forebear and suspend 
any legal, equitable or other actions against Docucon for collection of the Past Due Balance.</P>
<P style="margin-top:0px; margin-bottom:6.667px"><BR>
<BR></P>
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<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px; page-break-before:always">4.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Release by Individual</U>. Upon execution and delivery of this Settlement Agreement, Individual, for itself and on behalf of its subsidiaries and affiliates, hereby releases and forever discharges Docucon, together with its subsidiaries, affiliates, successors and assigns, as well as its present and former directors, officers, employees, shareholders, agents, attorneys and other representatives and the successors, assigns and personal representatives of each of them (each, a &quot;<U>Docucon Released Party</U>&quot;), from any and all claims, suits, debts, liens, liabilities, losses, causes of action, rights, damages (whether actual, compensatory, consequential or punitive), demands, obligations, promises, costs and expenses (including, without limitation, attorneys' fees and expenses and the fees and expenses of other professionals and experts) of every kind, nature and description, whether in law or in equity, whether known or unknown, 
or known in the future, fixed or contingent, billed or unbilled, suspected, disclosed or undisclosed, claimed or concealed, from the beginning of time through the date of this Settlement Agreement, which Individual, for itself and subsidiaries and affiliates, could assert against any Docucon Released Party relating to or arising out of any and all agreements between the parties, the transactions contemplated thereby, the Past Due Balance, or otherwise.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">5.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Waiver</U>. Each of Docucon and Individual hereby waives and assumes the risk of any and all claims for loss and damages which exist as of the date hereof, including but not limited to those set forth in this Settlement Agreement but of which they are unaware, whether through ignorance, oversight, error, negligence, or otherwise in which, if known, would materially affect their decision to enter into this Settlement Agreement. &nbsp;Each of Docucon and Individual hereby expressly assume the risk that they may suffer damages in the future as a result of any matter referred to herein, and they hereby waive all rights or benefits which they have now, or in the future may have, under any applicable law. &nbsp;Each of Docucon and Individual acknowledge that there is a risk of the damages which they believe they have suffered or will suffer may turn out to be other than or greater than those now known, suspected, or believed to be true. &nbsp;I
n addition, the cost and damages they have incurred or have suffered may be greater than or other than those known now. &nbsp;Facts on which they have been relying in entering into this Settlement Agreement may later turn out to be other than or different from those now known, suspected or believed to be true. &nbsp;Each of Docucon and Individual acknowledge that in entering into this Settlement Agreement, they have expressed that they agree to accept the risk of any such possible unknown damages, claims, facts, demands, actions, and causes of action. &nbsp;Each of Docucon and Individual acknowledge and present that in waiving all rights and benefits they may have as set forth herein, they have had the advice, or have had the opportunity to have the advice, of counsel and independent consultants and further represent, warrant, and guarantee that this Settlement Agreement shall remain in full force and effect notwithstanding current and such possible changes or differences of material fact. &nbsp;This relief 
shall apply to any and all claims other than for breach of this Settlement Agreement. </P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">6.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Representations, Warranties and Covenants of Docucon</U>. &nbsp;Docucon hereby represents and warrants to Individual as follows:</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(a)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">Docucon has the corporate power and authority to execute, deliver and perform this Settlement Agreement.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(b)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">The execution, delivery and performance of this Settlement Agreement has been duly authorized by Docucon in accordance with all requisite corporate power and authority.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(c)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">This Settlement Agreement constitutes a legal, valid and binding obligation of Docucon, enforceable against Docucon in accordance with its terms, except as enforcement may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws of general applicability affecting the enforcement of creditors' rights and (ii) the application of principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law).</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(d)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">The execution, delivery and performance of this Settlement Agreement by Docucon does not (i) violate or contravene the certificate of incorporation or by-laws of Docucon; (ii) violate or constitute a breach of, or default under, any material agreement or other instrument binding upon Docucon or to which it is a party; (iii) violate or contravene any judgment, decree or order of any court or regulatory body binding upon Docucon; or (iv) violate any law or regulation applicable to Docucon.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">7.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Representations, Warranties and Covenants of Individual</U>. &nbsp;Individual hereby represents and warrants to Docucon as follows:</P>
<P style="margin-top:0px; margin-bottom:6.667px"><BR>
<BR></P>
<P style="margin-top:0px; margin-bottom:13.333px" align=center>2</P>
<P style="margin-top:0px; margin-bottom:10.667px"><BR></P>
<P style="margin-top:0px; margin-bottom:14.667px"><BR></P>
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<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px; page-break-before:always">(a)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">Individual has the corporate power and authority to execute, deliver and perform this Settlement Agreement.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(b)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">The execution, delivery and performance of this Settlement Agreement has been duly authorized by Individual in accordance with all requisite corporate power and authority.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(c)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">Individual has received independent legal advice from attorneys of its choice with respect to the terms and provisions of this Settlement Agreement, the advisability of entering into this Settlement Agreement and of the consequences of entering into this Settlement Agreement.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(d)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">This Settlement Agreement constitutes a legal, valid and binding obligation of Individual, enforceable in accordance with its terms against Individual, except as such enforcement may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws of general applicability affecting the enforcement of creditors' rights and (ii) the application of general principles of equity (regardless of whether considered in a proceeding in equity or at law). &nbsp;</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(e)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">The execution, delivery and performance of this Settlement Agreement by Individual does not (i) violate or contravene the certificate of incorporation of Individual; (ii) violate or constitute a breach of, or default under, any material agreement or other instrument binding upon Individual or to which it is a party; (iii) violate or contravene any judgment, decree or order of any court or regulatory body binding upon Individual; or (iv) violate any law or regulation applicable to Individual.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(f)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">Individual is an &quot;accredited investor&quot;, which is defined under Rule 501(a)(3) of the Securities Act of 1933, as amended (the &quot;Act&quot;), has the financial sophistication and knowledge to accept the Shares and understands the risk of an entire loss of investment in the Shares; </P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(g)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">Individual is acquiring the Shares for its own account and for investment purposes only; and</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">8.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Ownership of Claims</U>. &nbsp;Individual represents and warrants to Docucon that it is the lawful and sole owner of the claims being released, and that the claim for the amounts owed are greater than two (2) years by it pursuant to this Settlement Agreement and it has not sold, transferred, assigned, pledged, hypothecated or otherwise encumbered any such claim. &nbsp;</P>
<A NAME="a_Toc470921791"></A><P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">9.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Governing Law</U>. &nbsp;This Settlement Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be performed in said State, without regard to any of its principles of <A NAME="a_Toc470921792"></A>conflicts of laws or other laws, which would result in the application of the laws of another jurisdiction. &nbsp;This Settlement Agreement shall be construed and interpreted without regard to any presumption against the party causing this Settlement Agreement to be drafted.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">10.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Notices</U>. &nbsp;All notices, demands, consents, instructions and other communications to be given or delivered or permitted under or by reason of the provisions of this Settlement Agreement or in connection with the transactions contemplated<A NAME="a_Toc469820201"></A> hereby shall be in writing and shall be deemed to be delivered and received by the intended recipient as follows: &nbsp;(i) if <A NAME="a_Toc470663115"></A>personally delivered, on the business day of such delivery (as evidenced by the receipt of the personal delivery service), (ii) if mailed certified or registered mail return receipt requested (with all costs having been prepaid), four (4) business days after being mailed, (iii) if delivered by an overnight courier of recognized international reputation (with all charges having been prepaid), on the business day of such delivery (as evidenced by the receipt of the overnight courier service), or (iv) if delivered by f
acsimile transmission, on the business day of such delivery if sent by 5:00 p.m. in the time zone of the recipient, or if sent after that time, on the next succeeding business day (as evidenced by the printed confirmation of delivery generated by the sending party's telecopier machine). &nbsp;If any notice, demand, consent, instruction or other communication cannot be delivered because of a changed address of which no notice was given (in accordance with this Section 10), or the refusal to accept same, the notice, demand, consent, instruction or other communication shall be deemed received on the second business day after the notice is sent (as evidenced by a sworn affidavit of the sender). &nbsp;All such notices, demands, consents, instructions and other communications will be sent to the following addresses or facsimile numbers as applicable:</P>
<P style="margin-top:0px; margin-bottom:13.333px"><BR>
<BR></P>
<P style="margin-top:0px; margin-bottom:13.333px" align=center>3</P>
<P style="margin-top:0px; margin-bottom:10.667px"><BR></P>
<P style="margin-top:0px; margin-bottom:14.667px"><BR></P>
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<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px; page-break-before:always">if to Docucon:</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">C/O &#150; Independent Directors Office</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">201 Shannon Oaks Circle &#150; Suite 105</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">Cary NC 27511</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">Attention: Board of Directors </P>
<P style="margin-top:0px; margin-bottom:6.667px"><BR></P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">with a copy to individual: &nbsp;</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">Edward Gistaro</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">__________________________</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">__________________________</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:144px; text-indent:-48px">__________________________<BR>
</P>
<P style="margin-top:0px; margin-bottom:6.667px">or to such other address as any party may specify by notice given to the other party in accordance with this Section 10.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">11.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Arbitration</U>. &nbsp;Any disagreement, dispute, controversy or claim arising out of or relating to this Settlement Agreement shall be submitted to binding arbitration before the American Arbitration Association (&#147;AAA&#148;), in accordance with its rules of Commercial Arbitration. &nbsp;The decision of the arbitrator shall be final and binding upon the parties, and it may be entered in any court of competent jurisdiction. &nbsp;The arbitration shall take place in County, New York. &nbsp;The arbitrator shall be bound by the laws of the State of New York applicable to all relevant privileges and the attorney work product doctrine. &nbsp;Each party shall be required to provide the other party with copies of all documentation and other written, electronic or photographic materials that it intends to introduce into evidence at least ten (10) days in advance of the hearing date. &nbsp;The arbitrator shall have the power to grant equitabl
e relief where applicable under New York law. &nbsp;The arbitrator shall issue a written opinion setting forth his or her decision and the reasons therefor within thirty (30) days after the arbitration proceeding is concluded. &nbsp;The obligation of the parties to submit any dispute arising under or related to this Settlement Agreement to arbitration as provided in this Section 11 shall survive the expiration or earlier termination of this Settlement Agreement. &nbsp;Notwithstanding the foregoing, a party may seek an injunction or other appropriate relief from a court of competent jurisdiction to preserve or protect the status quo with respect to any matter pending conclusion of the arbitration proceeding, but no such application to a court shall in any way be permitted to stay or otherwise impede the progress of the arbitration proceeding. &nbsp;Each party shall pay its own costs (including, without limitation, attorney&#146;s fees and disbursements) and expenses in connection with any arbitration proceedi
ng; <U>provided</U>, <U>however</U>, the prevailing party shall be entitled to recover its reasonable attorney&#146;s fees and disbursements. &nbsp;&nbsp;Each of Docucon and Individual hereby consent to the jurisdiction of the AAA in the State of New York for the purpose of any arbitration arising out of any of their obligations arising hereunder.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">12.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Miscellaneous</U>. &nbsp;(a) &nbsp;No party may assign any of its rights or delegate any of its duties under this Settlement Agreement without the prior written consent of the other parties hereto; <U>provided</U>, <U>however</U>, that Docucon may assign any of its rights or delegate any of its duties hereunder, by operation of law or otherwise, or in connection with a Change of Control (as defined below) and, following such Change of Control, this Settlement Agreement shall be enforceable by, among others, any direct or indirect parent or affiliate of Docucon or any direct or indirect holder of greater than 50% of the voting capital stock of Docucon. &nbsp;This Settlement Agreement shall be binding upon the successors and their respective representatives, subsidiaries, affiliates, successors, and permitted assigns of the parties and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Fo
r purposes of this Settlement Agreement, a Change of Control shall be deemed to have occurred in any of the following events: &nbsp;(i) a merger of Docucon with or into another entity (whether or not Docucon is the surviving corporation) resulting in a change of ownership of greater than 50% of the outstanding voting capital stock of Docucon; (ii) a tender offer by a third party resulting in a change of ownership of not less than 50% of the outstanding voting capital stock of Docucon; or (iii) the sale of all or substantially all of the assets of Docucon to a third party.</P>
<P style="margin-top:0px; margin-bottom:6.667px"><BR>
<BR></P>
<P style="margin-top:0px; margin-bottom:13.333px" align=center>4</P>
<P style="margin-top:0px; margin-bottom:10.667px"><BR></P>
<P style="margin-top:0px; margin-bottom:14.667px"><BR></P>
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<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px; page-break-before:always">(b)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px">Except as specifically provided in Sections 3 and 4 of this Settlement Agreement, no party other than Docucon and Individual shall be deemed intended or incidental beneficiaries of this Settlement Agreement; <U>provided</U>, <U>however</U>, that a party (a &#147;<U>Potential Acquiror</U>&#148;) who enters into a definitive agreement with Docucon to engage in a transaction with Docucon which contemplates a Change of Control shall be deemed an intended third party beneficiary of this Settlement Agreement, including, without limitation, all of the representations, warranties and covenants contained herein, and shall be entitled to enforce this Settlement Agreement to the same extent as if the Potential Acquiror was a party hereto. </P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:144px; text-indent:-48px">(c)</P>
<P style="margin:0px; padding-left:144px">The provisions of this Settlement Agreement shall not be construed as a waiver of any party's right to commence arbitration proceedings under Section 11 to enforce the terms and provisions of this Settlement Agreement.</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:144px; text-indent:-48px">(d)</P>
<P style="margin:0px; padding-left:144px">This Settlement Agreement contains a complete statement of all the arrangements, understandings and agreements among the parties with respect to the subject matter hereof, supersedes all other arrangements, understandings and agreements, whether written or oral, among them relating to such subject matter, all of which are merged herein. &nbsp;This Settlement Agreement cannot be altered, modified, waived or amended, except by an instrument in writing executed by each of the parties hereto.</P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:144px; text-indent:-48px">(e)</P>
<P style="margin:0px; padding-left:144px">Section headings contained in this Settlement Agreement are included herein solely for convenience of reference only and are not intended to affect the interpretation or construction of any of the terms or provisions of this Settlement Agreement.</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:144px; text-indent:-48px">(f)</P>
<P style="margin:0px; padding-left:144px">This Settlement Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which, when taken together shall constitute one and the same instrument. &nbsp;The facsimile signature of a party hereto shall constitute a valid and effective signature.</P>
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<P style="margin-top:0px; margin-bottom:13.333px" align=center>5</P>
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<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px; page-break-before:always">IN WITNESS WHEREOF each of the parties has duly executed this Settlement Agreement as of the date first above written.</P>
<P style="margin-top:0px; margin-bottom:13.333px"><BR></P>
<P style="margin-top:0px; margin-bottom:26.667px; padding-left:264px">DOCUCON INCORPORATED </P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:264px">By: <U>/s/ Robert Schwartz </U></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:264px">Name:</P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:264px; text-indent:72px">Robert Schwartz</P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:264px">Title:</P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:264px; text-indent:72px">Chief Executive Officer</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:264px">INDIVIDUAL</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:264px">By: <U>/s/ Edward Gistaro</U></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:264px">Name: Edward Gistaro</P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:264px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
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<BR></P>
<P style="margin-top:0px; margin-bottom:13.333px" align=center>6</P>
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<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>ex104.htm
<DESCRIPTION>EXHIBIT 10.4
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
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<TITLE>SETTLEMENT AGREEMENT AND RELEASE</TITLE>
<META NAME="author" CONTENT="Administrator">
<META NAME="date" CONTENT="10/17/2007">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000" LINK=#004488 VLINK=#004488 ALINK=#004488>
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<P style="margin-top:0px; margin-bottom:26.667px; font-family:Times New Roman Bold" align=right><FONT FACE="Times New Roman Bold"><B>Exhibit 10.4</B></FONT></P>
<P style="margin-top:0px; margin-bottom:26.667px; font-family:Times New Roman Bold" align=center><B><U>SETTLEMENT AGREEMENT FOR PAYMENT OF ACCOUNT AND RELEASE</U></B></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px"><FONT FACE="Times New Roman">This SETTLEMENT AGREEMENT FOR PAYMENT OF ACCOUNT AND RELEASE dated as of September 30</FONT><SUP>th</SUP>, 2007 (this &quot;<U>Settlement Agreement</U>&quot;), by and between Docucon Incorporated, a Delaware corporation (&quot;Docucon&quot;) and Schwartz Heslin Group a Company incorporated in the state of New York (&#147;Company&#148;).</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px">WHEREAS, Docucon desires to satisfy in full any and all amounts due and owing to Company as of the date of this Agreement, and, subject to the terms and conditions set forth herein, Company desires to accept shares of the common stock, par value $0.0001 per share (&#147;Common Stock&#148;) of Docucon in full satisfaction of any and all amounts due and owing to Company, whether known or unknown; and</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px">WHEREAS, without admitting any wrongdoing or liability, or acknowledging the validity of any claim, asserted or unasserted, Docucon and Company have reached an amicable settlement of any amounts owed in the manner set forth herein.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px">NOW, THEREFORE, in consideration of the mutual covenants contained herein and the other good and valuable consideration as set forth in this Settlement Agreement, the legal adequacy of which is hereby acknowledged, the parties agree as follows:</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">1.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Payment of Account; No Admission of Fault</U>. &nbsp;</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">(a)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px">The total remaining unpaid balance on the note owed by Docucon to Company, including, but not limited to, any and all services and expenses provided by Company to Docucon through the date hereof, is for all purposes agreed by the parties to be U.S. $53,325 (the &#147;<U>Past Due Balance</U>&#148;). &nbsp;&nbsp;</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">(b)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px">Each of Docucon and Company acknowledges and agrees that it is entering into this Settlement Agreement in order to settle and resolve any and all matters among them arising out of or in any way relating to the Past Due Balance and any and all agreements between the parties and the transactions contemplated thereby, and each of Docucon and Company is not admitting any liability on its part in any way relating to such matters, and no inference regarding any such liability is intended by virtue of the parties entering into this Settlement Agreement.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">2.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Share Consideration by Docucon to Company</U>. Docucon hereby agrees to issue to Company 106,650 shares of its Common Stock (the &#147;<U>Shares</U>,&#148;), at a valuation of $.50 cent per share. &nbsp;Company acknowledges and agrees that its name, address, and designation of this settlement shall be included on the Share Certificate. &nbsp;Company understands and acknowledges that Docucon makes no representations or warranties regarding the future price of the Shares, the current or future value of the Shares, or its current business, operations or financial condition or prospects and, except as expressly set forth in this Settlement Agreement, Company has not relied on any representations or warranties from Docucon or its representatives in any manner whatsoever. &nbsp;</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">3.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Indemnification by Company</U>. Upon execution and delivery of this Settlement Agreement, Company agrees to indemnify, defend, and hold harmless each Docucon Released Party (as defined below) from and against any and all causes of action, claims, damages, liability, actions or causes of action, and demands of whatsoever kind on account of all known, and unknown, injuries, losses, and damages allegedly sustained by a Docucon Released Party to the extent resulting from, arising from, or in any way connected with any and all claims against Docucon that are or could be made by Company, including without limitation, claims relating to, or in connection with, the Past Due Balance (it being understood that Docucon and Company intend all such claims to have been resolved and settled pursuant to this Settlement Agreement). &nbsp;Immediately upon execution and delivery of this Settlement Agreement, Company shall forebear and suspend any legal, equi
table or other actions against Docucon for collection of the Past Due Balance.</P>
<P style="margin-top:0px; margin-bottom:6.667px"><BR>
<BR></P>
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<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px; page-break-before:always">4.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Release by Company</U>. Upon execution and delivery of this Settlement Agreement, Company, for itself and on behalf of its subsidiaries and affiliates, hereby releases and forever discharges Docucon, together with its subsidiaries, affiliates, successors and assigns, as well as its present and former directors, officers, employees, shareholders, agents, attorneys and other representatives and the successors, assigns and personal representatives of each of them (each, a &quot;<U>Docucon Released Party</U>&quot;), from any and all claims, suits, debts, liens, liabilities, losses, causes of action, rights, damages (whether actual, compensatory, consequential or punitive), demands, obligations, promises, costs and expenses (including, without limitation, attorneys' fees and expenses and the fees and expenses of other professionals and experts) of every kind, nature and description, whether in law or in equity, whether known or unknown, or kno
wn in the future, fixed or contingent, billed or unbilled, suspected, disclosed or undisclosed, claimed or concealed, from the beginning of time through the date of this Settlement Agreement, which Company, for itself and subsidiaries and affiliates, could assert against any Docucon Released Party relating to or arising out of any and all agreements between the parties, the transactions contemplated thereby, the Past Due Balance, or otherwise.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">5.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Waiver</U>. Each of Docucon and Company hereby waives and assumes the risk of any and all claims for loss and damages which exist as of the date hereof, including but not limited to those set forth in this Settlement Agreement but of which they are unaware, whether through ignorance, oversight, error, negligence, or otherwise in which, if known, would materially affect their decision to enter into this Settlement Agreement. &nbsp;Each of Docucon and Company hereby expressly assume the risk that they may suffer damages in the future as a result of any matter referred to herein, and they hereby waive all rights or benefits which they have now, or in the future may have, under any applicable law. &nbsp;Each of Docucon and Company acknowledge that there is a risk of the damages which they believe they have suffered or will suffer may turn out to be other than or greater than those now known, suspected, or believed to be true. &nbsp;In additio
n, the cost and damages they have incurred or have suffered may be greater than or other than those known now. &nbsp;Facts on which they have been relying in entering into this Settlement Agreement may later turn out to be other than or different from those now known, suspected or believed to be true. &nbsp;Each of Docucon and Company acknowledge that in entering into this Settlement Agreement, they have expressed that they agree to accept the risk of any such possible unknown damages, claims, facts, demands, actions, and causes of action. &nbsp;Each of Docucon and Company acknowledge and present that in waiving all rights and benefits they may have as set forth herein, they have had the advice, or have had the opportunity to have the advice, of counsel and independent consultants and further represent, warrant, and guarantee that this Settlement Agreement shall remain in full force and effect notwithstanding current and such possible changes or differences of material fact. &nbsp;This relief shall apply to 
any and all claims other than for breach of this Settlement Agreement. </P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">6.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Representations, Warranties and Covenants of Docucon</U>. &nbsp;Docucon hereby represents and warrants to Company as follows:</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(a)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">Docucon has the corporate power and authority to execute, deliver and perform this Settlement Agreement.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(b)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">The execution, delivery and performance of this Settlement Agreement has been duly authorized by Docucon in accordance with all requisite corporate power and authority.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(c)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">This Settlement Agreement constitutes a legal, valid and binding obligation of Docucon, enforceable against Docucon in accordance with its terms, except as enforcement may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws of general applicability affecting the enforcement of creditors' rights and (ii) the application of principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law).</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(d)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">The execution, delivery and performance of this Settlement Agreement by Docucon does not (i) violate or contravene the certificate of incorporation or by-laws of Docucon; (ii) violate or constitute a breach of, or default under, any material agreement or other instrument binding upon Docucon or to which it is a party; (iii) violate or contravene any judgment, decree or order of any court or regulatory body binding upon Docucon; or (iv) violate any law or regulation applicable to Docucon.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">7.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Representations, Warranties and Covenants of Company</U>. &nbsp;Company hereby represents and warrants to Docucon as follows:</P>
<P style="margin-top:0px; margin-bottom:6.667px"><BR>
<BR></P>
<P style="margin-top:0px; margin-bottom:13.333px" align=center>2</P>
<P style="margin-top:0px; margin-bottom:10.667px"><BR></P>
<P style="margin-top:0px; margin-bottom:14.667px"><BR></P>
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<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px; page-break-before:always">(a)</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:168px">Company has the corporate power and authority to execute, deliver and perform this Settlement Agreement.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(b)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">The execution, delivery and performance of this Settlement Agreement has been duly authorized by Company in accordance with all requisite corporate power and authority.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(c)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">Company has received independent legal advice from attorneys of its choice with respect to the terms and provisions of this Settlement Agreement, the advisability of entering into this Settlement Agreement and of the consequences of entering into this Settlement Agreement.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(d)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">This Settlement Agreement constitutes a legal, valid and binding obligation of Company, enforceable in accordance with its terms against Company, except as such enforcement may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws of general applicability affecting the enforcement of creditors' rights and (ii) the application of general principles of equity (regardless of whether considered in a proceeding in equity or at law). &nbsp;</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(e)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">The execution, delivery and performance of this Settlement Agreement by Company does not (i) violate or contravene the certificate of incorporation of Company; (ii) violate or constitute a breach of, or default under, any material agreement or other instrument binding upon Company or to which it is a party; (iii) violate or contravene any judgment, decree or order of any court or regulatory body binding upon Company; or (iv) violate any law or regulation applicable to Company.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(f)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">Company is an &quot;accredited investor&quot;, which is defined under Rule 501(a)(3) of the Securities Act of 1933, as amended (the &quot;Act&quot;), has the financial sophistication and knowledge to accept the Shares and understands the risk of an entire loss of investment in the Shares; </P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:-17.333px; text-indent:144px; font-size:14.667px">(g)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:168px">Company is acquiring the Shares for its own account and for investment purposes only; and</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">8.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Ownership of Claims</U>. &nbsp;Company represents and warrants to Docucon that it is the lawful and sole owner of the claims being released, and that the claim for the amounts owed are greater than two (2) years by it pursuant to this Settlement Agreement and it has not sold, transferred, assigned, pledged, hypothecated or otherwise encumbered any such claim. &nbsp;</P>
<A NAME="a_Toc470921791"></A><P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">9.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Governing Law</U>. &nbsp;This Settlement Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made and to be performed in said State, without regard to any of its principles of <A NAME="a_Toc470921792"></A>conflicts of laws or other laws, which would result in the application of the laws of another jurisdiction. &nbsp;This Settlement Agreement shall be construed and interpreted without regard to any presumption against the party causing this Settlement Agreement to be drafted.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">10.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Notices</U>. &nbsp;All notices, demands, consents, instructions and other communications to be given or delivered or permitted under or by reason of the provisions of this Settlement Agreement or in connection with the transactions contemplated<A NAME="a_Toc469820201"></A> hereby shall be in writing and shall be deemed to be delivered and received by the intended recipient as follows: &nbsp;(i) if <A NAME="a_Toc470663115"></A>personally delivered, on the business day of such delivery (as evidenced by the receipt of the personal delivery service), (ii) if mailed certified or registered mail return receipt requested (with all costs having been prepaid), four (4) business days after being mailed, (iii) if delivered by an overnight courier of recognized international reputation (with all charges having been prepaid), on the business day of such delivery (as evidenced by the receipt of the overnight courier service), or (iv) if delivered by f
acsimile transmission, on the business day of such delivery if sent by 5:00 p.m. in the time zone of the recipient, or if sent after that time, on the next succeeding business day (as evidenced by the printed confirmation of delivery generated by the sending party's telecopier machine). &nbsp;If any notice, demand, consent, instruction or other communication cannot be delivered because of a changed address of which no notice was given (in accordance with this Section 10), or the refusal to accept same, the notice, demand, consent, instruction or other communication shall be deemed received on the second business day after the notice is sent (as evidenced by a sworn affidavit of the sender). &nbsp;All such notices, demands, consents, instructions and other communications will be sent to the following addresses or facsimile numbers as applicable:</P>
<P style="margin-top:0px; margin-bottom:13.333px"><BR>
<BR></P>
<P style="margin-top:0px; margin-bottom:13.333px" align=center>3</P>
<P style="margin-top:0px; margin-bottom:10.667px"><BR></P>
<P style="margin-top:0px; margin-bottom:14.667px"><BR></P>
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<P style="margin:0px; padding-left:96px; page-break-before:always">if to Docucon:</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:96px">C/O &#150; Independent Directors Office</P>
<P style="margin:0px; padding-left:96px">201 Shannon Oaks Circle &#150; Suite 105</P>
<P style="margin:0px; padding-left:96px">Cary NC 27511</P>
<P style="margin:0px; padding-left:96px">Attention: Board of Directors </P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:96px">with a copy to Company: &nbsp;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:96px">Schwartz Heslin Group <BR>
8 Airport Park Boulevard</P>
<P style="margin:0px; padding-left:96px">Latham, New York 12110<BR>
</P>
<P style="margin-top:0px; margin-bottom:6.667px"><BR></P>
<P style="margin-top:0px; margin-bottom:6.667px">or to such other address as any party may specify by notice given to the other party in accordance with this Section 10.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">11.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px"><U>Arbitration</U>. &nbsp;Any disagreement, dispute, controversy or claim arising out of or relating to this Settlement Agreement shall be submitted to binding arbitration before the American Arbitration Association (&#147;AAA&#148;), in accordance with its rules of Commercial Arbitration. &nbsp;The decision of the arbitrator shall be final and binding upon the parties, and it may be entered in any court of competent jurisdiction. &nbsp;The arbitration shall take place in County, New York. &nbsp;The arbitrator shall be bound by the laws of the State of New York applicable to all relevant privileges and the attorney work product doctrine. &nbsp;Each party shall be required to provide the other party with copies of all documentation and other written, electronic or photographic materials that it intends to introduce into evidence at least ten (10) days in advance of the hearing date. &nbsp;The arbitrator shall have the power to grant equitabl
e relief where applicable under New York law. &nbsp;The arbitrator shall issue a written opinion setting forth his or her decision and the reasons therefor within thirty (30) days after the arbitration proceeding is concluded. &nbsp;The obligation of the parties to submit any dispute arising under or related to this Settlement Agreement to arbitration as provided in this Section 11 shall survive the expiration or earlier termination of this Settlement Agreement. &nbsp;Notwithstanding the foregoing, a party may seek an injunction or other appropriate relief from a court of competent jurisdiction to preserve or protect the status quo with respect to any matter pending conclusion of the arbitration proceeding, but no such application to a court shall in any way be permitted to stay or otherwise impede the progress of the arbitration proceeding. &nbsp;Each party shall pay its own costs (including, without limitation, attorney&#146;s fees and disbursements) and expenses in connection with any arbitration proceedi
ng; <U>provided</U>, <U>however</U>, the prevailing party shall be entitled to recover its reasonable attorney&#146;s fees and disbursements. &nbsp;&nbsp;Each of Docucon and Company hereby consent to the jurisdiction of the AAA in the State of New York for the purpose of any arbitration arising out of any of their obligations arising hereunder.</P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">12.</P>
<P style="margin-top:0px; margin-bottom:6.667px; text-indent:144px"><U>Miscellaneous</U>. &nbsp;(a) &nbsp;No party may assign any of its rights or delegate any of its duties under this Settlement Agreement without the prior written consent of the other parties hereto; <U>provided</U>, <U>however</U>, that Docucon may assign any of its rights or delegate any of its duties hereunder, by operation of law or otherwise, or in connection with a Change of Control (as defined below) and, following such Change of Control, this Settlement Agreement shall be enforceable by, among others, any direct or indirect parent or affiliate of Docucon or any direct or indirect holder of greater than 50% of the voting capital stock of Docucon. &nbsp;This Settlement Agreement shall be binding upon the successors and their respective representatives, subsidiaries, affiliates, successors, and permitted assigns of the parties and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Fo
r purposes of this Settlement Agreement, a Change of Control shall be deemed to have occurred in any of the following events: &nbsp;(i) a merger of Docucon with or into another entity (whether or not Docucon is the surviving corporation) resulting in a change of ownership of greater than 50% of the outstanding voting capital stock of Docucon; (ii) a tender offer by a third party resulting in a change of ownership of not less than 50% of the outstanding voting capital stock of Docucon; or (iii) the sale of all or substantially all of the assets of Docucon to a third party.</P>
<P style="margin-top:0px; margin-bottom:6.667px"><BR>
<BR></P>
<P style="margin-top:0px; margin-bottom:13.333px" align=center>4</P>
<P style="margin-top:0px; margin-bottom:10.667px"><BR></P>
<P style="margin-top:0px; margin-bottom:14.667px"><BR></P>
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<P style="margin-top:0px; margin-bottom:6.667px; page-break-before:always"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px; text-indent:96px">(b)</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:144px">Except as specifically provided in Sections 3 and 4 of this Settlement Agreement, no party other than Docucon and Company shall be deemed intended or incidental beneficiaries of this Settlement Agreement; <U>provided</U>, <U>however</U>, that a party (a &#147;<U>Potential Acquiror</U>&#148;) who enters into a definitive agreement with Docucon to engage in a transaction with Docucon which contemplates a Change of Control shall be deemed an intended third party beneficiary of this Settlement Agreement, including, without limitation, all of the representations, warranties and covenants contained herein, and shall be entitled to enforce this Settlement Agreement to the same extent as if the Potential Acquiror was a party hereto. </P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:144px; text-indent:-48px">(c)</P>
<P style="margin:0px; padding-left:144px">The provisions of this Settlement Agreement shall not be construed as a waiver of any party's right to commence arbitration proceedings under Section 11 to enforce the terms and provisions of this Settlement Agreement.</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:144px; text-indent:-48px">(d)</P>
<P style="margin:0px; padding-left:144px">This Settlement Agreement contains a complete statement of all the arrangements, understandings and agreements among the parties with respect to the subject matter hereof, supersedes all other arrangements, understandings and agreements, whether written or oral, among them relating to such subject matter, all of which are merged herein. &nbsp;This Settlement Agreement cannot be altered, modified, waived or amended, except by an instrument in writing executed by each of the parties hereto.</P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:144px; text-indent:-48px">(e)</P>
<P style="margin:0px; padding-left:144px">Section headings contained in this Settlement Agreement are included herein solely for convenience of reference only and are not intended to affect the interpretation or construction of any of the terms or provisions of this Settlement Agreement.</P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:144px; text-indent:-48px">(f)</P>
<P style="margin:0px; padding-left:144px">This Settlement Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which, when taken together shall constitute one and the same instrument. &nbsp;The facsimile signature of a party hereto shall constitute a valid and effective signature.</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="line-height:22.667px; margin:0px" align=center><B>[The remainder of this page has been intentionally left blank]</B></P>
<P style="margin-top:0px; margin-bottom:14.667px"><BR>
<BR></P>
<P style="margin-top:0px; margin-bottom:13.333px" align=center>5</P>
<P style="margin-top:0px; margin-bottom:10.667px"><BR></P>
<P style="margin-top:0px; margin-bottom:14.667px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px; color:#004488" noshade size=1.333>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:96px; page-break-before:always">IN WITNESS WHEREOF each of the parties has duly executed this Settlement Agreement as of the date first above written.</P>
<P style="margin-top:0px; margin-bottom:13.333px"><BR></P>
<P style="margin-top:0px; margin-bottom:26.667px; padding-left:264px">DOCUCON INCORPORATED </P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:264px">By: <U>/s/ Brian R. Balbirnie</U></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:264px">Name:</P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:264px; text-indent:72px">Brian R. Balbirnie</P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:264px">Title:</P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:264px; text-indent:72px">Independent Director for Docucon Incorporated</P>
<P style="margin:0px; padding-left:264px">COMPANY</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:264px">By: <U>/s/ Robert Schwartz</U></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:264px">Name: Robert Schwartz</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:264px">By<U>: /s/ Larry Heslin</U></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px; padding-left:264px">Name: Larry Heslin</P>
<P style="margin-top:0px; margin-bottom:13.333px"><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px"><BR>
<BR></P>
<P style="margin-top:0px; margin-bottom:13.333px" align=center>6</P>
<P style="margin-top:0px; margin-bottom:10.667px"><BR></P>
<P style="margin-top:0px; margin-bottom:14.667px"><BR></P>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>6
<FILENAME>ex311.htm
<DESCRIPTION>EXHIBIT 31.1
<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 31.1</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 16, 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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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>7
<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 16, 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>8
<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 September 30, 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 16, 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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