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Report of Independent Registered Public Accounting Firm	1
Financial Statements
Balance Sheets	2
Statements of Operations	3
Statements of Stockholders' Deficiency	4
Statements of Cash Flows	5
Notes to Combined Financial Statements	6-9

 

 

 

 

 

 

 

 

 

 

		2007				2006
ASSETS
Current Assets:
Cash and cash equivalents		$	37,803			$	23,624
Accounts receivable (less allowance for doubtful accounts of $1,000 in 2007 and 2006)			34,885				18,989
Total Current Assets			72,688				42,613
Property and Equipment:
Property and equipment			1,052,116				892,928
Less—Accumulated depreciation			(673,764	)			(553,734	)
Net Property and Equipment			378,352				339,194
Other Assets:
Other assets			443				1,004
Employee loan			18,000				18,000
Total Other Assets			18,443				19,004
Total Assets			469,483				400,811
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:
Accounts payable			47,809				28,179
Accrued expenses			1,785				5,745
Total Current Liabilities			49,594				33,924
Due to shareholder			1,836,097				1,538,588
Total Liabilities			1,885,691				1,572,512

Stockholders' Deficiency:
Common stock (par value $0.10; 1,000 shares authorized;
198.50 shares issued and outstanding)			20				20
Additional paid in capital			1,813,974				1,813,974
Accumulated deficit			(3,230,202	)			(2,985,695	)
Total Stockholders' Deficiency			(1,416,208	)			(1,171,701	)
Total Liabilities and Stockholders' Deficiency			469,483				400,811

 

 

 

 

 

 

		2007				2006
Sales		$	668,172			$	418,347
Cost of sales			339,223				345,819
Gross Profit			328,949				72,528
Selling, general and administrative			574,130				456,891
Loss from Operations			(245,181	)			(384,363	)
Other Income:
Interest Income			674				543
Other Income			-				420
Total Other Income			674				963
Loss before provision for income taxes			(244,507	)			(383,400	)
Provision for income taxes			-				-
Net Loss		$	(244,507	)		$	(383,400	)

 

 

 

 

		Common Stock								Additional Paid				Accumulated				Total Stockholders'
		Shares				Amount				In Capital				Deficit				Deficiency
Balance, January 1, 2006			198.50			$	20			$	1,813,974			$	(2,602,295	)		$	(788,301	)
Net Loss							-								(383,400	)			(383,400	)
Balance, December 31, 2006			198.50				20				1,813,974				(2,985,695	)			(1,171,701	)
Net Loss							-								(244,507	)			(244,507	)
Balance, December 31, 2007			198.50			$	20			$	1,813,974			$	(3,230,202	)		$	(1,416,208	)

 

 

 

 

		2007				2006
Cash Flows from Operating Activities:
Net loss		$	(244,507	)		$	(383,400	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation			120,030				95,906
Changes in Assets and Liabilities:
Accounts receivable			(15,896	)			118
Prepaid Rent			-				877
Employee Loan			-				(8,000	)
Other Assets			561				18,021
Security Deposit			-				6,204
Accounts payable			19,630				(24,420	)
Accrued expenses			(3,959	)			3,647
Net Cash Used in Operating Activities			(124,141	)			(291,047	)
Cash Flows from Investing Activities:
Cash paid for equipment			(159,188	)			(250,886	)
Net Cash Used in Investing Activities			(159,188	)			(250,886	)
Cash Flows from Financing Activities:
Advances from shareholder			297,508				520,509
Net Cash Provided by Financing Activities			297,508				520,509
Increase (Decrease) in Cash and Cash Equivalents			14,179				(21,424	)
Cash and Cash Equivalents, Beginning of Year			23,624				45,048
Cash and Cash Equivalents, End of Year		$	37,803			$	23,624
Cash paid for interest expense		$	-			$	-
Cash paid for income taxes		$	-			$	-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

		December 31,
		2007				2006
Storage equipment		$	741,176			$	583,374
Website and software			150,208				150,208
Furniture and fixtures			22,837				14,038
Computer hardware and software			75,498				82,911
Data Center			62,397				62,397
			1,052,116				892,928
Less: Accumulated depreciation			673,764				553,734
Net property and equipment		$	378,352			$	339,194

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(i)	the Participant's employment with the Corporation has terminated because he has become Disabled;

 

(ii)	the Participant has died;

 

(iii)

the Participant's employment with the Corporation has been terminated by the Corporation without "cause";

 

(iv)	the sale, transfer or assignment of all or substantially all of the Corporation's assets (whether tangible or intangible), not in the ordinary course of business, whether in a single transaction or a series of transactions;

 

(v)	the sale, transfer or assignment of more than fifty (50%) percent of the outstanding capital stock of the Corporation, whether in a single transaction or a series of transactions.