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<SEC-DOCUMENT>0001161697-06-000843.txt : 20060831
<SEC-HEADER>0001161697-06-000843.hdr.sgml : 20060831
<ACCEPTANCE-DATETIME>20060831163931
ACCESSION NUMBER:		0001161697-06-000843
CONFORMED SUBMISSION TYPE:	SC 14F1
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20060831
DATE AS OF CHANGE:		20060831

SUBJECT COMPANY:	

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DIVERSIFAX INC
		CENTRAL INDEX KEY:			0000885462
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-MAILING, REPRODUCTION, COMMERCIAL ART & PHOTOGRAPHY [7330]
		IRS NUMBER:				133637458
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1130

	FILING VALUES:
		FORM TYPE:		SC 14F1
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	005-51019
		FILM NUMBER:		061068857

	BUSINESS ADDRESS:	
		STREET 1:		4274 INDEPENDENCE CT
		CITY:			SARASOTA
		STATE:			FL
		ZIP:			34241-2109
		BUSINESS PHONE:		9413512720

	MAIL ADDRESS:	
		STREET 1:		4274 INDEPENDENCE CT
		CITY:			SARASOTA
		STATE:			FL
		ZIP:			34241-2109

FILED BY:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DIVERSIFAX INC
		CENTRAL INDEX KEY:			0000885462
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-MAILING, REPRODUCTION, COMMERCIAL ART & PHOTOGRAPHY [7330]
		IRS NUMBER:				133637458
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1130

	FILING VALUES:
		FORM TYPE:		SC 14F1

	BUSINESS ADDRESS:	
		STREET 1:		4274 INDEPENDENCE CT
		CITY:			SARASOTA
		STATE:			FL
		ZIP:			34241-2109
		BUSINESS PHONE:		9413512720

	MAIL ADDRESS:	
		STREET 1:		4274 INDEPENDENCE CT
		CITY:			SARASOTA
		STATE:			FL
		ZIP:			34241-2109
</SEC-HEADER>
<DOCUMENT>
<TYPE>SC 14F1
<SEQUENCE>1
<FILENAME>dfax_14f-1.htm
<DESCRIPTION>STATEMENT RE CHANGE IN MAJORITY OF DIRECTORS
<TEXT>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>______________________________________________________________________________</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>UNITED STATES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>SECURITIES AND EXCHANGE COMMISSION</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font SIZE=2>WASHINGTON, D.C. 20549</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>STATEMENT RE CHANGE IN MAJORITY</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>OF DIRECTORS PURSUANT TO RULE 14f-1</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>UNDER SECTION 14(f)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>OF THE SECURITIES EXCHANGE ACT OF 1934</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>Commission File No. 000-20936</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=5>DIVERSIFAX, INC.</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>(Exact name of registrant in its charter)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<table border="0" cellspacing=0 cellpadding=0 width="638" style='border-collapse:collapse'>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><U><B><font SIZE=2>DELAWARE</font></B></U></p>  </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><u><b><font size=2>13-3637458</font></b></u><u></u></p> </td> </tr>
    <tr >
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(State or other jurisdiction of</font><br> <font size=2>incorporation or organization)</font></p> </td>
        <td width="319" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(I.R.S. Employer</font><br> <font size=2>Identification No.)</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Shennan Zhong Road</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>PO Box 031-114</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><u><b><font size=2>Shenzhen, China 518000</font></b></u></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>(Address of principal executive office, including Zip Code)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>Registrant&#146;s telephone number &#150; (212)561-3604</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>Securities registered under Section 12(g) of the Exchange Act:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><U><B><font SIZE=2>COMMON STOCK, $.001 PAR VALUE</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>(Title of each class)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>______________________________________________________________________________</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:4.15pt; margin-top:4.15pt;text-align:justify;'><font size=2>The number of shares outstanding of each of the Company&#146;s classes of common stock, as of August 25, 2006 is 51,726,200 shares, all of one class, $.001 par value per share. Of this number, 15,489,700 shares were held by non-affiliates of the Company</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>*Affiliates for the purpose of this item refers to the Company&#146;s officers and directors and/or any persons or firms (excluding those brokerage firms and/or clearing houses and/or depository companies holding Company&#146;s securities as record holders only for their respective clienteles&#146; beneficial interest) owing 5% or more of the Registrant&#146;s common stock, both of record and beneficially.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>______________________________________________________________________________</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>INFORMATION STATEMENT PURSUANT TO SECTION 14(f) OF THE</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>SECURITIES EXCHANGE ACT OF 1934 AND RULE 14F-1</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>We are furnishing this Information Statement to all of the holders of record</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>of our common stock, $.001 par value per share, at the close of business on August 31, 2006.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>This notice is required by Section 14(f) of the Securities</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Exchange Act of 1934 (the &#147;Exchange Act&#148;) and Rule 14f-1 of the Securities and</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Exchange Commission (&#147;SEC&#148;).</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>______________________________________________________________________________</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>NO VOTE OR OTHER ACTION OF THE COMPANY&#146;S STOCKHOLDERS IS<BR>REQUIRED IN CONNECTION WITH THIS INFORMATION STATEMENT.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>______________________________________________________________________________</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>INTRODUCTION</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>This Information Statement sets forth the change in the majority of the Company&#146;s board of directors effected by that certain Stock Transaction described below, and contains related biographical and other information concerning the Company&#146;s executive officers, directors and certain beneficial holders. This Information Statement is being filed with the Securities and Exchange Commission (&#147;SEC&#148;) and delivered to stockholders holding all 51,726,200 of the issued and outstanding shares of common stock, par value $.001 per share, of Diversifax, Inc. (&#147;DFAX&#148; or the &#147;Company&#148;), representing all of the shares otherwise entitled to vote at a meeting of stockholders for the election of the Company&#146;s directors.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>However, because the Company&#146;s articles of incorporation and by-laws permit vacancies in its board of directors (the &#147;Board&#148;) to be filled by a majority of the remaining directors, the holders of the Company&#146;s shares of common stock receiving this Information Statement are not being asked to vote or take any other action with respect to the transactions described by this Information Statement. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>All Company filings, and exhibits thereto, may be inspected without charge at the public reference section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of this material also may be obtained from the SEC at prescribed rates. The SEC also maintains a website that contains reports, proxy and information statements and other information regarding public companies that file reports with the SEC. Copies of the Company filings may be obtained from the SEC&#146;s website at http://www.sec.gov. Upon the completion of the Stock Transaction (as defined below), the Company filed a report on Form 8-K with the SEC concerning the Change in Control of the Company and the Departure and Election of Directors at the Company.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>2</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>CHANGE IN MAJORITY OF DIRECTORS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>On August 25, 2006, Juxiang Yu (the &#147;Purchaser&#148;) entered into a Stock Purchase Agreement (the &#147;Purchase Agreement&#148;) with Irwin Horowitz (the &#147;Seller&#148;). Under the terms of the Purchase Agreement, for and in consideration of $425,000, the Seller sold, and the Purchaser acquired, a total of 36,208,340 shares of the common stock, $.001 par value, of the Company, constituting 70% of the shares of the Company then issued and outstanding (the &#147;Stock Transaction&#148;).</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>As contemplated by the Stock Transaction, Mr.&nbsp;Irwin Horowitz and Mr.&nbsp;Lonnie L. Sciambi resigned from the Company&#146;s Board of Directors effective at the Effective Date (as defined below) and, prior to their resignation, elected the Purchaser to the Board of Directors in accordance with the Company&#146;s By-Laws. The Purchaser took office as director effective upon the closing of the Stock Transaction and subject to the expiration of the statutory ten (10) day waiting period following the filing by the Company with the SEC of this Information Statement pursuant to Rule 14f-1 promulgated under the Securities Exchange Act of 1934, as amended, relating to the change in control of the Board occasioned by the resignation of Mr.&nbsp;Horowitz and Mr.&nbsp;Sciambi from the Board of Directors (the &#147;Effective Date&#148;). </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>SECURITIES OWNERSHIP OF CERTAIN</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>BENEFICIAL OWNERS AND MANAGEMENT </font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>The following table sets forth information regarding beneficial ownership of the common stock of the Company by: (i) each person known by the Company to be the beneficial owner of more than 5% of the outstanding shares of its common stock as of December 31, 2005; (ii) each director and executive officer of the Company as of December 31, 2005; (iii) all officers and directors of the Company as a group as of December 31, 2005; and (iv) all proposed beneficial owners, directors and officers (individually and as a group) of the Company after giving effect to the Stock Transaction. The information is determined in accordance with Rule 13d-3 promulgated under the Exchange Act based upon information furnished by the persons listed or contained in filings made by them with the SEC. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr style='page-break-inside:avoid'>
        <td width="151" valign=bottom style='border-bottom:  solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Name and Address</font></b><br>  <b><font size=1>Of Beneficial Owner (1)</font></b></p>  </td>
        <td width="162" valign=bottom style='border-bottom:  solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Shares of DFAX Stock</font></b><br>  <b><font size=1>Beneficially Owned Prior</font></b><br>  <b><font size=1>to the Stock Transaction</font></b></p>  </td>
        <td width="82" valign=bottom style='border-bottom:  solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Percentage</font></b><br>  <b><font size=1>of  Class (2)</font></b></p>  </td>
        <td width="145" valign=bottom style='border-bottom:  solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Shares of DFAX Stock</font></b><br>  <b><font size=1>Beneficially Owned</font></b><br>  <b><font size=1>After the Stock</font></b><br>  <b><font size=1>Transaction</font></b></p>  </td>
        <td width="82" valign=bottom style='border-bottom:  solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Percentage</font></b><br>  <b><font size=1>of  Class (2)</font></b></p>  </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="151" valign=bottom style='background:#EAF9E8;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Irwin Horowitz (3)</font></p> </td>
        <td width="162" valign=bottom style='background:#EAF9E8;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>41,320,000 (4)</font></p> </td>
        <td width="82" valign=bottom style='background:#EAF9E8;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>80%</font></p> </td>
        <td width="145" valign=bottom style='background:#EAF9E8;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>5,410,000 (4)</font></p> </td>
        <td width="82" valign=bottom style='background:#EAF9E8;padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>1.05%</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="151" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Lonnie L. Sciambi (5)</font></p> </td>
        <td width="162" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0%</font></p> </td>
        <td width="145" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0%</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="151" valign=bottom style='background:#EAF9E8; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Juxiang Yu (6)</font></p> </td>
        <td width="162" valign=bottom style='background:#EAF9E8; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="82" valign=bottom style='background:#EAF9E8;padding: 0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0%</font></p> </td>
        <td width="145" valign=bottom style='background:#EAF9E8; padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>36,208,340</font></p> </td>
        <td width="82" valign=bottom style='background:#EAF9E8;padding: 0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>70%</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>
        <td width="151" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Executive Officers and Directors as a Group</font></p> </td>
        <td width="162" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>41,320,000</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>80</font><font size=2>%</font></p> </td>
        <td width="145" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>36,208,340</font></p> </td>
        <td width="82" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent: 0in;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>70%</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>__________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>A person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days from the date of this report upon the exercise of warrants or options. Each beneficial owner&#146;s percentage ownership is determined by assuming that options or warrants that are held by such person (but not those held by any other person) and which are exercisable within 60 days from the date of this report have been exercised.</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font color="#CCFFCC"><font size=2>&nbsp;</font></font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>3</font></p>

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<BR>

<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(2)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>The percentages listed in the &#147;Percent of Class&#148; column are based upon 51,726,200 issued and outstanding shares of Common Stock.</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(3)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Mr.&nbsp;Horowitz resigned from the Board of Directors effective as of the Effective Date. The address for Mr.&nbsp;Horowitz is 4274 Independence Court, Sarasota, Florida 34234.</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left>

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    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(4)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Excludes options to purchase 15,518,097 shares that were rescinded pursuant to the Purchase Agreement.</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(5)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Mr.&nbsp;Sciambi resigned from the Board of Directors effective as of the Effective Date. The Address for Mr.&nbsp;Sciambi is 4274 Independence Court, Sarasota, Florida 34234.</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr >
        <td width="48" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(6)</font></p> </td>
        <td  valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>
Juxiang Yu was elected to the Board, effective on the Effective Date. The address for Juxiang Yu is Shennan Zhong Road., PO Box 031-114, Shenzhen, China 518000.</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by the owners, have sole investment and voting power over to the shares. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>DIRECTORS AND EXECUTIVE OFFICERS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>Management</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>Pursuant to the Purchase Agreement, Ms.&nbsp;Yu was elected a director of the Company and, at the Effective Date, the resignations of Irwin Horowitz and Lonnie L. Sciambi, current directors of the Company, will become effective. The following table sets forth information regarding the current executive officers and directors of the Company and the executive officers and directors of the Company following the completion of the Stock Transaction and the Effective Date. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>The Company&#146;s existing management consists of: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=center>

<table border="0" cellspacing=0 cellpadding=0 width="624" >
    <tr >
        <td width="208" valign=top style='padding:.75pt .75pt .75pt .75pt'>
            <p style='margin:0in;margin-bottom:.0001pt;line-height:14.0pt'><u><font size=2>Name</font></u></p> </td>
        <td width="128" valign=top style='padding:.75pt .75pt .75pt .75pt'>
            <p align=center style='margin:0in;margin-bottom:.0001pt;text-align:center; line-height:14.0pt'><u><font size=2>Age</font></u></p> </td>
        <td width="288" valign=top style='padding:.75pt .75pt .75pt .75pt'>
            <p style='margin:0in;margin-bottom:.0001pt;line-height:14.0pt'><u><font size=2>Title</font></u></p> </td> </tr>
    <tr >
        <td width="208" valign=top style='padding:.75pt .75pt .75pt .75pt'>
            <p style='margin:0in;margin-bottom:.0001pt;line-height:14.0pt'><font size=2>Irwin A. Horowitz</font></p> </td>
        <td width="128" valign=top style='padding:.75pt .75pt .75pt .75pt'>
            <p align=center style='margin:0in;margin-bottom:.0001pt;text-align:center; line-height:14.0pt'><font size=2>70</font></p> </td>
        <td width="288" valign=top style='padding:.75pt .75pt .75pt .75pt'>
            <p style='margin:0in;margin-bottom:.0001pt;line-height:14.0pt'><font size=2>Chairman, CEO, President and Director</font></p> </td> </tr>
    <tr >
        <td width="208" valign=top style='padding:.75pt .75pt .75pt .75pt'>
            <p style='margin:0in;margin-bottom:.0001pt;line-height:14.0pt'><font size=2>Lonnie L. Sciambi </font></p> </td>
        <td width="128" valign=top style='padding:.75pt .75pt .75pt .75pt'>
            <p align=center style='margin:0in;margin-bottom:.0001pt;text-align:center; line-height:14.0pt'><font size=2>62</font></p> </td>
        <td width="288" valign=top style='padding:.75pt .75pt .75pt .75pt'>
            <p style='margin:0in;margin-bottom:.0001pt;line-height:14.0pt'><font size=2>Director</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><i><font size=2>Irwin A. Horowitz</font></i><font size=2>&nbsp;</font><i><font size=2>&#150; </font></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>Irwin A. Horowitz has been the Chairman of the Board, Chief Executive Officer and President of the Company since November 1, 1993. From July through October 1993, he served as Chief Operating Officer of the Company. For more than the past five years, Dr.&nbsp;Horowitz has been Chairman of the Board and President of IMSG and Affiliates, which were acquired by the Company effective November 1, 1993.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>4</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Lonnie L. Sciambi &#150; </font></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>Lonnie L. Sciambi has been a director since 1999. Mr.&nbsp;Sciambi is also managing Director and CEO of Hamilton Capital Group, an investment banking firm. He was previously Managing Director of LBC Capital Resources, Inc, an investment banking firm, and prior to that, President and CEO of Ion Networks, Inc, a telecommunications network management company. Mr.&nbsp;Sciambi, who began his career with IBM, followed by 25 years as an entrepreneur, holds a bachelor of science degree in electrical engineering from Drexel University.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>At the Effective Date, the Company&#146;s management shall consist of: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=center>

<table border="0" cellspacing=0 cellpadding=0 width="624" >
    <tr >
        <td width="207" valign=top style='padding:.75pt .75pt .75pt .75pt'>
            <p style='margin:0in;margin-bottom:.0001pt;line-height:14.0pt'><u><font size=2>Name</font></u></p> </td>
        <td width="128" valign=top style='padding:.75pt .75pt .75pt .75pt'>
            <p align=center style='margin:0in;margin-bottom:.0001pt;text-align:center; line-height:14.0pt'><u><font size=2>Age</font></u></p> </td>
        <td width="287" valign=top style='padding:.75pt .75pt .75pt .75pt'>
            <p style='margin:0in;margin-bottom:.0001pt;line-height:14.0pt'><u><font size=2>Title</font></u></p> </td> </tr>
    <tr >
        <td width="207" valign=top style='padding:.75pt .75pt .75pt .75pt'>
            <p style='margin:0in;margin-bottom:.0001pt;line-height:14.0pt'><font size=2>Juxiang Yu</font></p> </td>
        <td width="128" valign=top style='padding:.75pt .75pt .75pt .75pt'>
            <p align=center style='margin:0in;margin-bottom:.0001pt;text-align:center; line-height:14.0pt'><font size=2>31</font></p> </td>
        <td width="287" valign=top style='padding:.75pt .75pt .75pt .75pt'>
            <p style='margin:0in;margin-bottom:.0001pt;line-height:14.0pt'><font size=2>President, Secretary and Director</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Juxiang Yu</font></i><font size=2> &#150; </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>From July 1996 to June 2004, Juxiang Yu was the Branch Manager for Ping An Insurance Co. at its Guangzhou branch, and from July 2004 Ms.&nbsp;Yu served has General Manager of Guangzhou Xufei Advertising Co.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Board of Directors: Compensation and Meetings</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>All directors hold office until the completion of their term of office, which is not longer than one year, or until their successors have been elected. All officers are appointed annually by the board of directors and, subject to any existing employment agreement, serve at the discretion of the board. Currently, directors receive no compensation. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>All directors may be reimbursed by the Company for any expenses incurred in attending directors&#146; meetings provided that Claremont has the resources to pay these fees. The Company will consider applying for officers and directors liability insurance at such time when it has the resources to do so. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Committees of the Board of Directors</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>Concurrent with having sufficient members and resources, the Company&#146;s board of directors will establish an audit committee and a compensation committee. The audit committee will have a designated Audit Committee Financial Expert and be responsible to review the results and scope of the audit and other services provided by the independent auditors and review and evaluate the system of internal controls. The compensation committee will manage the stock option plan and review and recommend compensation arrangements for the officers. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>No final determination has yet been made as to the memberships of these committees or when we will have sufficient members to establish committees.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>5</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>EXECUTIVE COMPENSATION</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><b><font size=2>Executive Officers and Directors </font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>On October 29, 1996, the Company entered into a renewable one year Employment Agreement with Irwin Horowitz, pursuant to which the Company agreed to pay Irwin Horowitz a salary of $125,000, together with an annual incentive bonus equal to a percentage, which ranges from 6% to 18%, of the Company&#146;s pre-tax profits. This Agreement was terminated pursuant to the Purchase Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>The following sets forth the annual and long-term compensation for services in all capacities to the Company for the fiscal year ended November 30, 2005 paid to the Company&#146;s Chief Executive Officer (&#147;CEO&#148;) and the Company&#146;s four most highly compensated executive officers, if any, other than the CEO whose total compensation during fiscal year 2005 exceeded $100,000 and who were serving as executive officers at the end of the 2005 fiscal year (collectively, the &#147;Named Executive Officers&#148;). </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=2>EXECUTIVE COMPENSATION IN LAST FISCAL YEAR</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="624" STYLE="border-collapse:collapse">
    <tr style='height:1.25pt'>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  nowrap colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:1.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Long Term Compensation </font></b></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:1.25pt'>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  nowrap colspan="4" valign=bottom style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:1.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Annual Compensation </font></b></p> </td>
        <td  nowrap colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:1.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Awards </font></b></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Payouts </font></b></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:1.25pt'>
        <TD WIDTH="110"  VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="45"  VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="75"  VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="65"  VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Non-Cash </font></b></p> </td>
        <TD WIDTH="50"  VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD WIDTH="82"  VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Restricted </font></b></p> </td>
        <TD WIDTH="82"  VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Options/ </font></b></p> </td>
        <TD WIDTH="60" NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=1>LTIP </font></B></p> </td>
        <TD WIDTH="55" NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>All </font></b></p> </td> </tr>
    <tr style='height:1.25pt'>
        <TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Name &amp; Position </font></b></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Year </font></b></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Salary </font></b></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Bonus </font></b></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Other </font></b></p> </td>
        <td width="82" nowrap valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:1.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Stock </font></b></p> </td>
        <td width="82" nowrap valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:1.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>SARs </font></b></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Payouts </font></b></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE=" border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Other </font></b></p> </td> </tr>
    <tr style='height:1.25pt'>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Irwin A. Horowitz</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="82" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:1.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="82" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:1.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:1.25pt'>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Chairman, CEO &amp;</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="82" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:1.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="82" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:1.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:1.25pt'>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>President</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2005</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$125,000(1)</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>None</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>None</font></p> </td>
        <td width="82" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:1.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>None</font></p> </td>
        <td width="82" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:1.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>15,613,097</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>None</font></p> </td>
        <TD NOWRAP VALIGN="BOTTOM" STYLE="padding:0in 5.4pt 0in 5.4pt; height:1.25pt">
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>None</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>(1) Mr.&nbsp;Horowitz&#146;s salary for 2005 was accrued and was waived pursuant to the Purchase Agreement.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font SIZE=2>STOCK OPTION GRANTS IN LAST FISCAL YEAR</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>The following table sets forth stock options granted to the Named Executive Officers during the 2005 fiscal year.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='margin-left:4.65pt;border-collapse:collapse'>
    <tr style='height:41.25pt'>
        <td width="145" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:41.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Name</font></b></p> </td>
        <td width="123" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:41.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Number of Options</font></b><br> <b><font size=1>Granted in Fiscal</font></b><br> <b><font size=1>Year ended</font></b><br> <b><font size=1>11/30/05</font></b></p> </td>
        <td width="123" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:41.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>% of Total Options</font></b><br> <b><font size=1>Granted to</font></b><br> <b><font size=1>Employees in</font></b><br> <b><font size=1>Fiscal Year 2005</font></b></p> </td>
        <td width="76" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:41.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Exercise</font></b><br> <b><font size=1>($/Share)</font></b></p> </td>
        <td width="76" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:41.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Expiration</font></b><br> <b><font size=1>Date</font></b></p> </td>
        <td width="60" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:41.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Grant</font></b><br> <b><font size=1>Value $</font></b></p> </td> </tr>
    <tr style='height:15.0pt'>
        <td width="145" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Irwin A. Horowtiz</font></p> </td>
        <td width="123" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>10,000,000</font></p> </td>
        <td width="123" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>100</font></p> </td>
        <td width="76" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0.0001</font></p> </td>
        <td width="76" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>-</font></p> </td>
        <td width="60" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>1,000</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font SIZE=2>OPTION EXERCISES DURING AND STOCK OPTIONS HELD AT END OF 2005 FISCAL YEAR</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>The following table indicates the total number and value of exercisable stock options held by the Named Executive Officers during the 2005 fiscal year.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>6</font></p>

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<BR>

<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='margin-left:4.65pt;border-collapse:collapse'>
    <tr style='height:44.25pt'>
        <td width="119" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:44.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:44.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Number of Unexercised</font></b><br> <b><font size=1>Options at Fiscal Year End</font></b></p> </td>
        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:44.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Value of Unexercised</font></b><br> <b><font size=1>In-The-Money Options</font></b><br> <b><font size=1>At Fiscal Year End</font></b></p> </td> </tr>
    <tr style='height:14.25pt'>
        <td width="119" nowrap valign=bottom style=' border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Name</font></b></p> </td>
        <td width="95" nowrap valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Exercisable</font></b></p> </td>
        <td width="115" nowrap valign=bottom style=' border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Unexercisable</font></b></p> </td>
        <td width="89" nowrap valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Exercisable</font></b></p> </td>
        <td width="107" nowrap valign=bottom style=' border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:14.25pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=1>Unexercisable</font></b></p> </td> </tr>
    <tr style='height:15.0pt'>
        <td width="119" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Irwin Horowitz</font></p> </td>
        <td width="95" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>15,613,097</font></p> </td>
        <td width="115" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>
        <td width="89" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0.0001</font></p> </td>
        <td width="107" nowrap valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:15.0pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>Pursuant to the Stock Transaction, Purchaser acquired 36,208,340 shares of the Company&#146;s common stock. After giving effect to the Stock Transaction, Purchaser is the owner of a total of 36,208,340 shares of the 51,726,200 shares of the Company&#146;s common stock issued and outstanding, constituting, in the aggregate, 70% of the issued and outstanding shares of the Company&#146;s common stock. Upon the completion of the Stock Transaction, the Purchaser became a director of the Company.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>Section 16(a) of the Exchange Act, as amended, requires DFAX&#146;s executive officers, directors and persons who beneficially own more than 10% of Claremont&#146;s common stock to file reports of their beneficial ownership and changes in ownership (Forms 3, 4 and 5, and any amendment thereto) with the SEC. Executive officers, directors, and greater-than-ten percent holders are required to furnish DFAX with copies of all Section 16(a) forms they file. Based solely on its review of such forms received by it, except as provided below, DFAX believes that all filing requirements applicable to its directors, executive officers and beneficial owners of 10% or more of the common stock have been complied with.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>SIGNATURE</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused the report to be signed on its behalf by the undersigned thereto duly authorized.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>DIVERSIFAX, INC.</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Dated: August 31, 2006</font></p> </td>
        <td width="36" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td width="111" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><u><font size=2>/s/ Juxiang Yu</font></u></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="143" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:&nbsp;&nbsp;Juxiang Yu</font></p> </td> </tr></table>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="121" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:&nbsp;&nbsp;President</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>7</font></p>

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