<html>
  <head>
    <title>
      Hyperdynamics S-1 6-29-2006
</title>
<!-- Licensed to: EDGARfilings LLC-->
<!-- Document Created using EDGARizer HTML 3.0.4.0 -->
<!-- Copyright 2006 EDGARfilings, Ltd., an IEC company.-->
<!-- All rights reserved EDGARfilings.com -->
</head>
  <body bgcolor="#ffffff">
    <div>
      <hr style="MARGIN-TOP: -5px; COLOR: #000000" noshade size="4">
      <hr style="MARGIN-TOP: -10px; COLOR: #000000" noshade size="1">
    </div>
    <div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div align="center">
          <table bgcolor="white" cellpadding="0" cellspacing="0" width="100%">

              <tr bgcolor="white">
                <td width="40%">&#160;</td>
                <td width="60%"><font size="2">As filed with the Securities and
                  Exchange
                  Commission on&#160;June 30, 2006</font></td>
              </tr>
              <tr bgcolor="white">
                <td width="40%">&#160;</td>
                <td width="60%"><font size="2">Registration No.
                  ______________</font></td>
              </tr>

          </table>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 396pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman">United
        States</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman">Securities
        and Exchange Commission</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Washington,
        D.C. 20549</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><strong>FORM
        S-1</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registration
        Statement</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
        The
        Securities Act of 1933</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 24pt; FONT-FAMILY: Times New Roman"><strong>HYPERDYNAMICS
        CORPORATION</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
        name of small business issuer in its charter)</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div align="left">
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td valign="middle" width="32%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Delaware</font></div>
              </td>
              <td align="left" valign="middle" width="2%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td valign="middle" width="32%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1311</font></div>
              </td>
              <td align="left" valign="middle" width="2%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td valign="middle" width="32%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;87-0400335</font></div>
              </td>
            </tr>
            <tr>
              <td valign="middle" width="32%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(State
                  or other jurisdiction of incorporation or organization)</font></div>
              </td>
              <td align="left" valign="middle" width="2%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td valign="middle" width="32%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Primary
                  standard industrial code)</font></div>
              </td>
              <td align="left" valign="middle" width="2%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td valign="middle" width="32%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(I.R.S.
                  Employer Identification Number)</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYPERDYNAMICS
        CORPORATION</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">One
        Sugar
        Creek Blvd., #125</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sugar
        Land, Texas 77478</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">voice:
        (713) 353-9400&#160;&#160;&#160;&#160;&#160;&#160;&#160; fax: (713)
        353-9421</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Address
        and telephone number of principal executive offices and principal place of
        business)</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Kent
        Watts, CEO and President</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">One
        Sugar
        Creek Blvd., #125</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sugar
        Land, Texas 77478 voice: (713)
        353-9400&#160;&#160;&#160;&#160;&#160;&#160;&#160; fax: (713)
        353-9421</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Name,
        address, including zip code, and telephone number, including area code, of
        agent
        for service)</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">With
        a
        Copy to:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Joel
        Seidner, Esq.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">880
        Tully
        Road, Suite 50</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Houston,
        Texas 77079</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">voice:
        (281) 493-1311 &#160;&#160;&#160;&#160;&#160;&#160;&#160; fax: (281)
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">667-3292</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Approximate
        date of commencement of proposed sale to the public:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        soon
        as practicable after the effective date of this Registration
        Statement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" colspan="2" valign="middle" width="37%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
                  any of the securities being registered on this Form are to be offered
                  on a
                  delayed or continuous basis pursuant to Rule 415 under the Securities
                  Act
                  of 1933 check the following box.</font></div>
              </td>
              <td align="left" valign="bottom" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">x</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" colspan="2" valign="middle" width="37%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
            </tr>
            <tr>
              <td align="left" colspan="2" valign="middle" width="37%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
                  this form is filed to register additional securities for an offering
                  pursuant to Rule 462(b) under the Securities Act, please check
                  the
                  following box and list the Securities Act registration statement
                  number of
                  the earlier effective&#160;registration statement for the same
                  offering.</font></div>
              </td>
              <td align="left" valign="bottom" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" colspan="2" valign="middle" width="37%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
            </tr>
            <tr>
              <td align="left" colspan="2" valign="middle" width="37%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
                  this Form is a post-effective amendment filed pursuant to Rule
                  462(c)
                  under the Securities Act, check the following box and list the
                  Securities
                  Act registration statement number of the earlier effective registration
                  statement for the same offering.</font></div>
              </td>
              <td align="left" valign="bottom" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" colspan="2" valign="middle" width="37%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
            </tr>
            <tr>
              <td align="left" colspan="2" valign="middle" width="37%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
                  this Form is a post-effective amendment filed pursuant to Rule
                  462(d)
                  under the Securities Act, check the following box and list the
                  Securities
                  Act registration statement number of the earlier effective registration
                  statement for the same offering.</font></div>
              </td>
              <td align="left" valign="bottom" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div>
        <hr style="MARGIN-TOP: -5px; COLOR: #000000" noshade size="1">
        <hr style="MARGIN-TOP: -13px; COLOR: #000000" noshade size="4">
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">1</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%; TEXT-ALIGN: center" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CALCULATION
        OF REGISTRATION FEE</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div align="left">
        <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="top" width="23%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Title
                  of Each Class of Securities to be Registered</strong></font></div>
              </td>
              <td width="2%" style="border-bottom: medium none;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td align="right" valign="top" width="16%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>Amount
                  to be Registered (1) (2)</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td align="right" valign="top" width="16%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>Proposed
                  Maximum Offering Price Per Share</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td align="right" valign="top" width="16%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>Proposed
                  Maximum Aggregate Offering Price</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td align="right" valign="top" width="16%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>Amount
                  of Registration Fee</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="23%" style="border-bottom: medium none;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td width="2%" style="border-bottom: medium none;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: medium none;">
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: medium none;">
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: medium none;">
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: medium none;">
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="23%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
                  Stock par value $0.001 underlying warrants</font></div>
              </td>
              <td valign="top" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="top" width="16%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,100,000
                  shares</font></div>
              </td>
              <td align="left" valign="top" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="top" width="16%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2.21</font></div>
              </td>
              <td align="left" valign="top" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="top" width="16%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,641,000.00</font></div>
              </td>
              <td align="left" valign="top" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="top" width="16%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">500.00</font></div>
              </td>
              <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" width="23%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td valign="top" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="top" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="top" width="16%" style="border-bottom: white;">
              </td>
              <td align="left" valign="top" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="top" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="top" width="16%" style="border-bottom: white;">
              </td>
              <td align="left" valign="top" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="top" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="top" width="16%" style="border-bottom: white;">
              </td>
              <td align="left" valign="top" width="2%" style="border-bottom: white;">&#160;</td>
              <td align="left" valign="top" width="1%" style="border-bottom: white;">&#160;</td>
              <td align="right" valign="top" width="16%" style="border-bottom: white;">
              </td>
              <td align="left" valign="top" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="23%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
                  Stock par value $0.001 underlying convertible debentures</font></div>
              </td>
              <td valign="top" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="right" valign="top" width="16%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,000,000
                  shares</font></div>
              </td>
              <td align="left" valign="top" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="top" width="16%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2.21</font></div>
              </td>
              <td align="left" valign="top" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="top" width="16%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,105,000.00</font></div>
              </td>
              <td align="left" valign="top" width="2%" style="border-bottom: #cceeff;">&#160;</td>
              <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="top" width="16%" style="border-bottom: #cceeff;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">710.00</font></div>
              </td>
              <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="23%" style="border-bottom: white solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td width="2%" style="border-bottom: white solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: white solid;">
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: white solid;">
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: white solid;">
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: black thin solid;">
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="23%" style="border-bottom: #cceeff solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">TOTAL
                  REGISTRATION FEE</font></div>
              </td>
              <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: #cceeff solid;">
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: #cceeff solid;">
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: #cceeff solid;">
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,210.00</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">2</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%; TEXT-ALIGN: center" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div>
          <hr style="COLOR: black" align="left" noshade size="1" width="20%">
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The
        Proposed Maximum Offering Price Per Share was computed pursuant to Rule 457
        under the Securities Act of 1933, as amended (the &#8220;Securities Act&#8221;) solely for
        the purpose of calculating the registration fee. This fee computation is
        based
        on the closing price of the common stock on the American Stock Exchange under
        the stock symbol &#8220;HDY&#8221; on&#160;June 23, 2006.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        In
        accordance with Rule 416 promulgated under the Securities Act of 1933, this
        Registration Statement also registers an indeterminate number of shares of
        common stock to be offered pursuant to terms which provide for a change in
        the
        amount of securities being offered or issued to prevent dilution resulting
        from
        stock splits, stock dividends, or similar transactions.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>THE
        REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
        AS
        MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
        A
        FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
        SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
        SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
        EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
        8(A),
        MAY DETERMINE.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>THE
        INFORMATION IN THIS PROSPECTUS IS SUBJECT TO COMPLETION OR AMENDMENT. THE
        SECURITIES COVERED BY THIS PROSPECTUS CANNOT BE SOLD UNTIL THE REGISTRATION
        STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BECOMES EFFECTIVE.
        THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION
        OF AN
        OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE
        IN
        WHICH AN OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION
        OR
        QUALIFICATION UNDER THE SECURITIES LAWS OF THAT STATE.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">3</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%; TEXT-ALIGN: center" align="right">
          </div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FORM
        S-1</strong></font><a name="id_0_3"/><a name="id_0_4"/></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PART
        I</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>INFORMATION
        REQUIRED IN A PROSPECTUS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">4</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%; TEXT-ALIGN: center" align="right">
          </div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WE
        HAVE FILED A REGISTRATION STATEMENT RELATING TO THESE SECURITIES WITH THE
        SECURITIES AND EXCHANGE COMMISSION. WE WILL AMEND AND COMPLETE THE INFORMATION
        IN THIS PROSPECTUS. THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND
        MAY
        BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT
        FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS
        IS NOT AN OFFER TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING AN OFFER
        TO
        BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
        PERMITTED.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="right" valign="top" width="90%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subject
                  To Completion&#160;: &#160;June 30,
                  2006&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PROSPECTUS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>HYPERDYNAMICS
        CORPORATION</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">One
        Sugar
        Creek Blvd., #125</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sugar
        Land, Texas 77478 voice: (713) 353-9400&#160;&#160;&#160;&#160;&#160;&#160; fax:
        (713) 353-9421</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>5,100,000
        Shares of Common Stock</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
        prospectus relates to the sale of up to 5,100,000 shares of our common stock
        by
        the Selling Stockholders. We will not receive proceeds from the sale of our
        shares by the Selling Stockholders. However, we may receive proceeds of up
        to
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$6,610,000
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">from
        the
        exercise of the warrants overlying some of the common stock only if </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cornell
        Capital Partners, LP</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        utilizes
        the cash method exercise.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a name="TAB2"/>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;
        Our common stock is traded on the American Stock Exchange under the trading
        symbol &#8220;HDY.&#8221;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>INVESTING
        IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CONSIDER
        CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 32 OF THIS PROSPECTUS BEFORE
        MAKING
        A DECISION TO PURCHASE OUR STOCK.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NEITHER
        THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION
        HAS
        APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
        ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
        OFFENSE.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        date
        of this Prospectus is _______________ , 2006</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">5</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%; TEXT-ALIGN: center" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Dealer
        Prospectus Delivery Obligation</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Until
        ______________, 2006, all dealers that effect transactions in these securities,
        whether or not participating in this offering, may be required to deliver
        a
        prospectus. This is in addition to the dealers' obligation to deliver a
        prospectus when acting as underwriters and with respect to their unsold
        allotments or subscriptions.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">6</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%; TEXT-ALIGN: center" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TABLE
        OF CONTENTS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div align="left">
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="bottom" width="88%">&#160;</td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Available
                  Information</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Prospectus
                  Summary</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Risk
                  Factors</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">32</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Information
                  About Forward-Looking Statements</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">37</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Selected
                  Financial Data</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">37</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Supplementary
                  Financial Information</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">39</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Use
                  of Proceeds</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">41</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Description
                  of Business</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">41</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Description
                  of Property</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">45</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Legal
                  Proceedings</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">47</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Management&#8217;s
                  Discussion and Analysis</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">49</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Financial
                  Statements</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">58
                  and F-1</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Market
                  Risk</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">58</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Market
                  for Common Equity and Related Stockholder Matters</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">58</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Directors,
                  Executive Officers, Promoters and Control Persons</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">58</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
                  Compensation</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">62</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Security
                  Ownership of Certain Beneficial Owners and Management</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">63</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certain
                  Relationships and Related Transactions</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">66</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Description
                  of Securities</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">68</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Selling
                  Stockholders</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">68</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Plan
                  of Distribution</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">69</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Changes
                  In and Disagreements With Accountants on Accounting and Financial
                  Disclosure</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">70</font></div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
                  of Named Experts and Counsel</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">70</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="88%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Disclosure
                  of Commission Position on Indemnification for Securities Act
                  Liabilities</font></div>
              </td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">70</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="88%">&#160;</td>
              <td align="right" valign="bottom" width="2%">&#160;</td>
              <td align="left" valign="bottom" width="10%">
                <div style="MARGIN-LEFT: 45pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">&#160;</div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">7</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%; TEXT-ALIGN: center" align="right">
          </div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AVAILABLE
        INFORMATION</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        are
        currently subject to the reporting requirements of the Securities Exchange
        Act
        of 1934, as amended (the &#8220;Exchange Act&#8221;). We file periodic reports, proxy
        materials and other information with the Securities and Exchange Commission
        (the
&#8220;Commission&#8221;). In addition, we will furnish stockholders with annual reports
        containing audited financial statements certified by our independent accountants
        and interim reports containing unaudited financial information as&#160;may be
        necessary or desirable. We will provide without charge to each person who
        receives a copy of this prospectus, upon written or oral request, a copy
        of any
        information that is incorporated by reference in this prospectus (not including
        exhibits to the information that is incorporated by reference unless the
        exhibits are themselves specifically incorporated by reference). Such request
        should be directed to: Kent Watts, Hyperdynamics Corporation, One Sugar Creek
        Blvd., #125, Sugar Land, Texas 77478, voice: (713) 353-9400, fax: (713)
        353-9421. Our Web site is www.hypd.com.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        provide free of charge on our Web site our annual report on Form 10-K, quarterly
        reports on Form 10-Q, current reports on Form 8-K, and amendments to those
        reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange
        Act as soon as reasonably practicable.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        have
        filed with the Commission a Registration Statement under the Securities Act
        of
        1933, as amended (the &#8220;Securities Act&#8221;) with respect to the securities offered
        by this prospectus. This prospectus does not contain all of the information
        set
        forth in the Registration Statement, parts of which are omitted in accordance
        with the rules and regulations of the Commission. For further information
        with
        respect to us and this offering, reference is made to the Registration
        Statement, including its exhibits, that may be inspected without charge at
        the
        public reference room maintained by the Commission at 100 F Street N.E.,
        Washington , D.C. 20549, tel. 1-800-SEC-0330. Copies of such material may
        also
        be obtained from the Public Reference Section of the Commission at 100 F
        Street
        N.E., Washington , D.C. 20549.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Web
        site of the Commission is www.sec.gov that contains reports, proxy and
        information statements and other information regarding issuers that file
        electronically with the Commission. Visitors to the Commission's Web site
        may
        access such information by searching the EDGAR database.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><a name="a2"/>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PROSPECTUS
        SUMMARY</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>About
        Hyperdynamics</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
        growth is dependent on our attaining profit from our operations and our raising
        capital through the sale of stock or debt. There is no assurance that we
        will be
        able to operate at a profit or sell our stock or debt. Our stock is traded
        on
        the American Stock Exchange under the symbol &#8220;HDY.&#8221;&#160;Our Web site is
        www.hypd.com. Our executive offices are located at Hyperdynamics
        Corporation,&#160;One Sugar Creek Blvd, #125, Sugar Land, Texas 77478, voice:
        (713) 353-9400, fax: (713) 353-9421. In this prospectus, we refer to ourselves
        and our subsidiaries as &#8220;Hyperdynamics,&#8221; &#8220;HDY, &#8220;We,&#8221; Us,&#8221; &#8220;Our&#8221; and the
&#8220;Company.&#8221;&#160;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        explore for and produce oil and gas. We are active in onshore exploration,
        drilling and production in Louisiana. We own farmout rights for approximately
        16,000,000 acres offshore Guinea upon which we have conducted extensive
        geophysical seismic testing and geochemical testing. We are presently
        negotiating a direct Production Sharing Agreement (&#8220;PSA&#8221;) with Guinea for a new
        PSA for the same offshore acreage.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        June
        2006, we entered into a financing arrangement with </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cornell
        Capital Partners, LP</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        in the
        gross amount of $6,000,000 whereby we have already received the net amount
        of
        $1,800,000. We pay 9% of the proceeds of each of the three debentures to
        an
        affiliate of Cornell. We received an additional net amount of $1,820,000
        pursuant to the second debenture. When the registration statement is ordered
        effective by the Commission, we expect to receive another net amount of
        $1,820,000. Since only the Commission can order that a registration statement
        is
        effective, we cannot determine when or if the registration statement will
        be
        effective. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        connection with the Cornell transaction, we issued 2,100,000 warrants to
        Cornell. We </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">may
        receive proceeds of up to </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$6,610,000
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">from
        the
        exercise of the warrants if Cornell utilizes the cash method
        exercise.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Impact
        of Cornell transaction on share price</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        The
        Cornell transactions consist of 3 convertible debentures each maturing three
        years from each issue date and 3 warrants that Cornell purchased from us.
        The
        debentures have a fixed conversion price of $2.00 per share of our common stock.
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
        Cornell purchases all three debentures and subsequently converts the three
        debentures at the fixed conversion price of $2.00 per share of common stock,
        we
        will have issued an aggregate of 3,000,000 shares of common stock. If Cornell
        exercises all of the warrants, we will issue 2,100,000 shares of common stock.
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        warrants expire in 2011 and are in three tranches consisting of:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 18pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">one
                  warrant to purchase 955,000 shares of common stock&#160;at an exercise
                  price of $2.50 per share;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 18pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">one
                  warrant to purchase 715,000 shares of common stock&#160;at an exercise
                  price of $3.50 per share; and</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 18pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">one
                  warrant to purchase 430,000 shares of common stock&#160;at an exercise
                  price of $4.00 per share. </font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
        Cornell converts all of the debentures and exercises all of the warrants,
        we
        will issue an aggregate of 5,100,000 shares to Cornell. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Agreements with Cornell.</font></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">8</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%; TEXT-ALIGN: center" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        June
        22, 2006, a condition subsequent to an agreement signed on June 19, 2006
        occurred, allowing the financing transaction with Cornell to proceed. The
        condition subsequent was the approval of the transaction by the American
        Stock
        Exchange. We are sometimes called the "Obligor" or the "Company," and Cornell
        is
        sometimes called the "Holder" or the "Investor" or "Buyer," in the contracts
        described below.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        financing transaction is between us and Cornell Capital Partners, LP. Pursuant
        to the transaction we received the net cash amount of $1,800,000 from Cornell
        which is the net sale proceeds of the first debenture in the face amount
        of
        $2,000,000 less fees of 9% which we pay to an affiliate of Cornell. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        received an additional net amount of $1,820,000 pursuant to the second
        debenture. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        anticipate receiving further additional proceeds in the net amount of $1,820,000
        from yet another debenture upon the effectiveness of the registration statement.
        Each of the three convertible debentures has a face amount of $2,000,000.
        Each
        convertible debenture is convertible into our common stock at a fixed price
        of
        $2.00 per share. If Cornell ultimately converts all three debentures in full,
        we
        will have issued an aggregate of 3,000,000 shares of common stock to Cornell
        in
        connection with the conversion of the debentures. The registration statement
        will register the 3,000,000 shares of common stock underlying the convertible
        debentures. Until the debentures are fully repaid or converted into common
        stock, they bear interest at the rate of 10% per annum. The aggregate monthly
        cash repayment is $175,000 for all of the 3 debentures less offsets from
        conversion amounts.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        further consideration, we issued to Cornell three warrants to purchase an
        aggregate of 2,100,000 shares of our common stock. The registration statement
        will also register 2,100,000 shares of common stock underlying the warrants.
        The
        warrants expire on June 19, 2011. The terms of the three warrants are: (a)
        one
        warrant to purchase 955,000 shares of common stock at an exercise price of
        $2.50
        per share; (b) one warrant to purchase 715,000 shares of common stock at
        an
        exercise price of $3.50 per share; and (c) one warrant to purchase 430,000
        shares of common stock at an exercise price of $4.00 per share. If Cornell
        ultimately exercises all three warrants in full, then we will have issued
        2,100,000 shares of common stock to Cornell in connection with the warrants,
        and
        we will have received an additional $6,610,000 in cash proceeds from the
        warrant
        exercises.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        are
        filing this registration statement to register 5,100,000 shares of common
        stock
        (3,000,000 shares underlying the debentures and 2,100,000 shares underlying
        the
        warrants). Since only the Commission can order a Form S-1 effective, we do
        not
        know when or if the Form S-1 will become effective. The Form S-1 will register
        the number of shares of common stock underlying the convertible debentures
        and
        the warrants.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        debentures have customary default, notice and cure provisions. If we default,
        receive notice from Cornell and fail to cure the default during the allotted
        time for cure (which varies depending on the type of default), then the
        conversion price of the debentures will become variable depending on our
        stock
        price at the time of conversion (a so called "market" conversion price, or
        a so
        called "future price" conversion price). If an uncured default occurs, we
        may
        have to issue more shares than the number of shares in the Form S-1 and in
        such
        a case we would have to file a new Form S-1. Pursuant to the rules of the
        American Stock Exchange, we cannot issue more that 9,215,406 shares of common
        stock in this transaction with Cornell unless we obtain shareholder
        approval.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Agreements with Cornell:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>THE
                  FIRST DEBENTURE</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        sold
        the first convertible debenture to Cornell at the first closing which occurred
        on June 22, 2006. Pursuant to the terms of the first convertible debenture,
        we
        promise to pay to Cornell or its successors and assigns the principal sum
        of
        $2,000,000 together with accrued but unpaid interest on or before June 19,
        2009
        (the "Maturity Date"). Interest accrues on the outstanding principal balance
        at
        the annual rate of 10%. Interest is calculated on the basis of a 365-day
        year
        and the actual number of days elapsed. Interest is to be paid to Cornell
        or its
        assignee. We will make monthly scheduled payments ("Scheduled Payments")
        on the
        Debenture and all other debentures issued in connection with the Securities
        Purchase Agreement consisting of a total of $175,000 of principal plus accrued
        and unpaid interest, commencing with the first Scheduled Payment which shall
        be
        due and payable on the earlier of (a) September 1, 2006 or (b) three days
        after
        the date that the Registration Statement is declared effective and continuing
        on
        the first business day of each calendar month until paid in full. The Debenture
        shall become due and immediately payable, including all accrued but unpaid
        interest, upon an Event of Default. If the Holder converts a portion of the
        principal amount outstanding under this Debenture or any other debenture
        issued
        in connection with the Securities Purchase Agreement prior to a Scheduled
        Payment due date, the Obligor shall be entitled to an off-set of the amount
        due
        pursuant to such Schedule Payment equal to the amount converted (the "Off-Set
        Amount"). In such event we are still obligated to make a Scheduled Payment
        reduced by the Off-Set Amount. At our option we have the right to redeem
        a
        portion or all amounts outstanding under this Debenture prior to the Maturity
        Date, which are not otherwise due pursuant to a Scheduled Payment, provided
        that
        the Closing Bid Price of the of the our Common Stock is less than $2.00 at
        the
        time of the Redemption Notice. We will pay an amount equal to the principal
        amount being redeemed plus a redemption premium ("Redemption Premium") equal
        to
        twenty percent (20%) of the principal amount being redeemed, and accrued
        interest, (collectively referred to as the "Redemption Amount"). In order
        to
        make a redemption, we must first provide written notice to Cornell. After
        receipt of the Redemption Notice, Cornell will have three business days to
        elect
        to convert all or any portion of this Debenture.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">9</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Debenture is secured by a Security Agreement dated June 19, 2006 between
        the
        Holder and Trendsetters Production Company the "Security Agreement") and
        a
        Subsidiary Security Agreement dated June 19, 2006.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">An
        "Event
        of Default" means any one of the following events:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
        default in the payment of the principal of, interest on or other charges
        in
        respect of this Debenture, free of any claim of subordination (whether on
        a
        Scheduled Payment due date, a Conversion Date or the Maturity Date or by
        acceleration or otherwise), which is not cured within three (3) business
        days of
        notice of such breach;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(ii)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Obligor or any material subsidiary of the Obligor shall commence, or there
        shall
        be commenced against the Obligor or any material subsidiary of the Obligor
        under
        any applicable bankruptcy or insolvency laws as now or later in effect or
        any
        successor, or the Obligor or any material subsidiary of the Obligor commences
        any other proceeding under any reorganization, arrangement, adjustment of
        debt,
        relief of debtors, dissolution, insolvency or liquidation or similar law
        of any
        jurisdiction whether now or later in effect relating to the Obligor or any
        material subsidiary of the Obligor or there is commenced against the Obligor
        or
        any material subsidiary of the Obligor any such bankruptcy, insolvency or
        other
        proceeding which remains undismissed for a period of 61 days; or the Obligor
        or
        any material subsidiary of the Obligor is adjudicated insolvent or bankrupt;
        or
        any order of relief or other order approving any such case or proceeding
        is
        entered; or the Obligor or any material subsidiary of the Obligor suffers
        any
        appointment of any custodian, private or court appointed receiver or the
        like
        for it or any substantial part of its property which continues undischarged
        or
        unstayed for a period of sixty one (61) days; or the Obligor or any material
        subsidiary of the Obligor makes a general assignment for the benefit of
        creditors; or the Obligor or any material subsidiary of the Obligor shall
        fail
        to pay, or shall state that it is unable to pay, or shall be unable to pay,
        its
        debts generally as they become due; or the Obligor or any material subsidiary
        of
        the Obligor shall call a meeting of its creditors with a view to arranging
        a
        composition, adjustment or restructuring of its debts; or the Obligor or
        any
        material subsidiary of the Obligor shall by any act or failure to act expressly
        indicate its consent to, approval of or acquiescence in any of the foregoing;
        or
        any corporate or other action is taken by the Obligor or any material subsidiary
        of the</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Obligor
        for the purpose of effecting any of the foregoing. The term "material
        subsidiary" shall mean any subsidiary with total assets in excess of
        $100,000;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iii)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Obligor shall default in any of its obligations under any other debenture
        or any
        mortgage, credit agreement or other facility, indenture agreement, factoring
        agreement or other instrument under which there may be issued, or by which
        there
        may be secured or evidenced any indebtedness for borrowed money or money
        due
        under any long term leasing or factoring arrangement of the Obligor in an
        amount
        exceeding $500,000, whether such indebtedness now exists or shall later be
        created and such default shall result in such indebtedness becoming or being
        declared due and payable prior to the date on which it would otherwise become
        due and payable, except those being contested in good faith;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">10</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iv)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Common Stock shall cease to be quoted for trading or listing for trading
        on any
        of (a) the American Stock Exchange, (b) New York Stock Exchange, (c) the
        Nasdaq
        National Market, (d) the Nasdaq Capital Market, or (e) the Nasdaq OTC Bulletin
        Board ("OTC") (each, a "Subsequent Market") and shall not again be quoted
        or
        listed for trading on any Subsequent Market within five (5) Trading Days
        of such
        delisting;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(v)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Obligor shall fail to file the Underlying Shares Registration Statement within
        the time periods set forth in the Investor Registration Rights Agreement
        ("Registration Rights Agreement") of even date herewith between the Obligor
        and
        the Holder, or the Underlying Shares Registration Statement shall not have
        been
        declared effective by the Commission within forty five (45) days of the
        Scheduled Effective Deadline as set forth in the Registration Rights Agreement,
        provided however, that a default shall not occur if a delay in the effectiveness
        is the result of the SEC commenting that a specific part of the Transaction
        Document is adverse to the SEC ordering effectiveness and the Obligor has
        used
        its best efforts to respond to, and resolve such comment, which shall be
        determined in the reasonable discretion of the Holder;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(vi)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
        the
        effectiveness of the Underlying Shares Registration Statement lapses for
        any
        reason or the Holder shall not be permitted to resell the shares of Common
        Stock
        underlying this Debenture under the Underlying Shares Registration Statement,
        in
        either case, for more than ten (10) consecutive Trading Days or an aggregate
        of
        thirty (30) Trading Days (which need not be consecutive Trading
        Days);</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(vii)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Obligor shall fail for any reason to deliver Common Stock certificates to
        a
        Holder prior to the fifth (5th) Trading Day after a Conversion Date or the
        Obligor shall provide notice to the Holder, including by way of public
        announcement, at any time, of its intention not to comply with requests for
        conversions of this Debenture such breach is not cured within three (3) days
        of
        notice of such breach;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(viii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Obligor shall fail for any reason to deliver the payment in cash pursuant
        to a
        Buy-In within five (5) days after notice is claimed delivered;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(x)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;&#160;&#160;
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Obligor shall fail to observe or perform in any material respect any other
        covenant, agreement or warranty contained in, or otherwise commit any breach
        or
        default of any provision of this Debenture or any Transaction Document which
        is
        not cured within twenty (20) business days after the Obligor is provided
        with
        written notice from the Holder.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
        the time that any portion of this Debenture is outstanding, if any Event
        of
        Default has occurred, the full principal amount of this Debenture, together
        with
        interest and other amounts owing to the date of acceleration shall become
        at the
        Holder's election, immediately due and payable in cash, provided however,
        the
        Holder may request (but shall have no obligation to request) payment of such
        amounts in Common Stock of the Obligor. In addition to any other remedies,
        the
        Holder shall have the right (but not the obligation) to convert this Debenture
        at any time after (x) an Event of Default or (y) the Maturity Date at the
        Conversion Price then in-effect (including, without limitation, the Default
        Conversion Price). </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Conversion
        of Debenture</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Debenture shall be convertible into shares of Common Stock at the option
        of the
        Holder, in whole or in part at any time and from time to time, after the
        Original Issue Date. The number of shares of Common Stock issuable upon a
        conversion equals the quotient obtained by dividing (x) the outstanding amount
        of this Debenture to be converted by $2.00. The Obligor shall deliver Common
        Stock certificates to the Holder prior to the Fifth (5th) Trading Day after
        a
        Conversion Date.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Conversion
        Restrictions</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">11</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
        Holder
        may not convert this Debenture or receive shares of Common Stock as payment
        of
        interest to the extent such conversion or receipt of such interest payment
        would
        result in the Holder, together with any affiliate, beneficially owning in
        excess
        of 4.99% of the then issued and outstanding shares of Common Stock, including
        shares issuable upon conversion of, and payment of interest on, this Debenture
        held by such Holder. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Total
        Transaction Shares shall not be greater than 9,215,406 shares (which does
        not
        exceed 19.99% of the 46,308,573 outstanding shares of Common Stock as of
        the
        date of the Securities Purchase Agreement), until the Obligor's shareholders
        approve (without the vote of any shares acquired in this transaction and
        related
        transactions) the issuance of the Total Transaction Shares. "Total Transaction
        Shares" shall mean, in the aggregate, any shares of Common Stock issued under
        (a) this Debenture to the Holder, or its affiliates, and transferees, subsequent
        transferees, or any other debenture issued pursuant to the Securities Purchase
        Agreement (b) the Warrant Shares (as defined in the Securities Purchase
        Agreement), and (c) any shares of Common Stock issued as Liquidated Damages
        (as
        defined in the Registration Rights Agreement).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Conversion
        Price and Adjustments to Conversion Price.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        conversion price (the "Fixed Conversion Price" or "Conversion Price") in
        effect
        on any Conversion Date shall be equal to $2.00, subject to anti-dilution
        adjustments.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1A.</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>THE
                  SECOND DEBENTURE</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        sold
        the second debenture to Cornell before the filing of this registration
        statement. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        second debenture matures on June 28, 2009 and has the same terms as the first
        debenture.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1C.</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>THE
                  THIRD DEBENTURE</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
        to the Securities Purchase Agreement we will sell third debenture to Cornell
        upon the effectiveness of the registration statement. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        issue
        date of the third debenture will be on the date that the registration statement
        is ordered effective by the commission. That date is not determinable at
        this
        time. The third debenture will mature 3 years from its issue date, and has
        the
        same terms as the first and second debenture.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>THREE
                  WARRANTS</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
        to the Securities Purchase Agreement, we issued </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">three
        warrants to Cornell, all issued on June 19, 2006, with similar terms except
        for
        the exercise price and number of underlying shares of common stock. The unique
        terms of each of the three warrants are: (a) one warrant to purchase 955,000
        shares of common stock at an exercise price of $2.50 per share; (b) one warrant
        to purchase 715,000 shares of common stock at an exercise price of $3.50
        per
        share; and (c) one warrant to purchase 430,000 shares of common stock at
        an
        exercise price of $4.00 per share. The three warrants expire in
        2011</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        material terms of each of the Warrants are as follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cornell,
        is entitled to purchase from the Company upon surrender of the Warrants the
        number of shares of common stock at the applicable exercise price or as
        subsequently adjusted. However, in no event shall the holder be entitled
        to
        exercise this Warrant or be forced to exercise this Warrant for a number
        of
        Warrant Shares in excess of that number of Warrant Shares which, upon giving
        effect to such exercise, would cause the aggregate number of shares of Common
        Stock beneficially owned by the holder and its affiliates to exceed 4.99%
        of the
        outstanding shares of the Common Stock following such exercise, except within
        60
        days of the Expiration Date (however, such restriction may be waived by Holder
        (but only as to itself and not to any other holder) upon not less than 65
        days
        prior notice to the Company).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exercise
        of Warrant</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
        Warrant may be exercised by the holder (i) on a cash basis or (ii) if an
        Event
        of Default has occurred, or if at the time of exercise, one year has elapsed
        from the Issuance Date and the Warrant Shares are not subject to an effective
        registration statement, then on a cashless exercise.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">12</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%; TEXT-ALIGN: center" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Adjustment
        of Warrant Exercise Price and Number of Shares upon Issuance of Common
        Stock.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
        and
        whenever on or after the Issuance Date of this Warrant, the Company issues
        or
        sells, or is deemed to have issued or sold, any shares of Common Stock (other
        than (i) Excluded Securities, (ii) shares of Common Stock which are issued
        or
        deemed to have been issued by the Company in connection with an Approved
        Stock
        Plan, or (iii) the Other Securities) for a consideration per share less than
        a
        price (the "Applicable Price") equal to the Warrant Exercise Price in effect
        immediately prior to such issuance or sale, then immediately after such issue
        or
        sale the Warrant Exercise Price then in effect shall be reduced to an amount
        equal to such consideration per share. Upon each such adjustment of the Warrant
        Exercise Price, the number of Warrant Shares issuable upon exercise of this
        Warrant shall be adjusted to the number of shares determined by multiplying
        the
        Warrant Exercise Price in effect immediately prior to such adjustment by
        the
        number of Warrant Shares issuable upon exercise of this Warrant immediately
        prior to such adjustment and dividing the product by the Warrant Exercise
        Price
        resulting from such adjustment.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        number of shares of Common Stock issuable upon exercise of this Warrant shall
        in
        no event be increased to an amount such that the Total Transaction Shares
        shall
        be greater than 9,215,406 shares (which no more than 19.99% of the 46,308,573
        outstanding shares of Common Stock as of the date of Securities Purchase
        Agreement), until the Company's shareholders approve (without the vote of
        any
        shares acquired in this transaction and related transactions) the issuance
        of
        the Total Transaction Shares. "Total Transaction Shares" shall mean, in the
        aggregate, any shares of Common Stock issued under (a) the Convertible
        Debentures issued in connection with the Securities Purchase Agreement to
        the
        Holder, or its affiliates, and transferees, subsequent transferees, or any
        other
        debenture issued pursuant to the Securities Purchase Agreement (b) the Warrant
        Shares (as defined in the Securities Purchase Agreement), and (c) any shares
        of
        Common Stock issued as Liquidated Damages (as defined in the Registration
        Rights
        Agreement).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purchase
        Rights; Reorganization, Reclassification, Consolidation, Merger or
        Sale.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Adjustment
        of Warrant Exercise Price upon Subdivision or Combination of Common Stock.
        If
        the Company at any time after the date of issuance of this Warrant subdivides
        (by any stock split, stock dividend, recapitalization or otherwise) one or
        more
        classes of its outstanding shares of Common Stock into a greater number of
        shares, any Warrant Exercise Price in effect immediately prior to such
        subdivision will be proportionately reduced and the number of shares of Common
        Stock obtainable upon exercise of this Warrant will be proportionately
        increased. If the Company at any time after the date of issuance of this
        Warrant
        combines (by combination, reverse stock split or otherwise) one or more classes
        of its outstanding shares of Common Stock into a smaller number of shares,
        any
        Warrant Exercise Price in effect immediately prior to such combination will
        be
        proportionately increased and the number of Warrant Shares issuable upon
        exercise of this Warrant will be proportionately decreased. Any adjustment
        shall
        become effective at the close of business on the date the subdivision or
        combination becomes effective.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Distribution
        of Assets. If the Company shall declare or make any dividend or other
        distribution of its assets (or rights to acquire its assets) to holders of
        Common Stock, by way of return of capital or otherwise (including, without
        limitation, any distribution of cash, stock or other securities, property
        or
        options by way of a dividend, spin off, reclassification, corporate
        rearrangement or other similar transaction) (a "Distribution"), at any time
        after the issuance of this Warrant, then, in each such case:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">13</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%; TEXT-ALIGN: center" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Limitations.
        Notwithstanding the above warrant provisions, the number of shares of Common
        Stock issuable upon exercise of this Warrant shall in no event be increased
        to
        an amount such that the Total Transaction Shares shall be greater than 9,215,406
        shares (which no more than 19.99% of the 46,308,573 outstanding shares of
        Common
        Stock as of the date of Securities Purchase Agreement), until the Company's
        shareholders approve (without the vote of any shares acquired in this
        transaction and related transactions) the issuance of the Total Transaction
        Shares. "Total Transaction Shares" shall mean, in the aggregate, any shares
        of
        Common Stock issued under (a) the Convertible Debentures issued in connection
        with the Securities Purchase Agreement to the Holder, or its affiliates,
        and
        transferees, subsequent transferees, or any other debenture issued pursuant
        to
        the Securities Purchase Agreement (b) the Warrant Shares (as defined in the
        Securities Purchase Agreement), and (c) any shares of Common Stock issued
        as
        Liquidated Damages (as defined in the Registration Rights
        Agreement).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purchase
        Rights; Reorganization, Reclassification, Consolidation, Merger or
        Sale.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
        at any
        time the Company grants, issues or sells any Options, Convertible Securities
        or
        rights to purchase stock, warrants, securities or other property pro rata
        to the
        record holders of any class of Common Stock (the "Purchase Rights"), then
        the
        holder of this Warrant will be entitled to acquire, upon the terms applicable
        to
        such Purchase Rights, the aggregate Purchase Rights which such holder could
        have
        acquired if such holder had held the number of shares of Common Stock acquirable
        upon complete exercise of this Warrant immediately before the date on which
        a
        record is taken for the grant, issuance or sale of such Purchase Rights,
        or, if
        no such record is taken, the date as of which the record holders of Common
        Stock
        are to be determined for the grant, issue or sale of such Purchase
        Rights.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
        recapitalization, reorganization, reclassification, consolidation, merger,
        sale
        of all or substantially all of the Company's assets to another Person or
        other
        transaction in each case which is effected in such a way that holders of
        Common
        Stock are entitled to receive (either directly or upon subsequent liquidation)
        stock, securities or assets with respect to or in exchange for Common Stock
        is
        referred to herein as an "Organic Change." Prior to the consummation of any
        (i)
        sale of all or substantially all of the Company's assets to an acquiring
        Person
        or (ii) other Organic Change following which the Company is not a surviving
        entity, the Company will secure from the Person purchasing such assets or
        the
        successor resulting from such Organic Change (in each case, the "Acquiring
        Entity") a written agreement (in form and substance satisfactory to the holders
        of Warrants representing at least two-thirds (iii) of the Warrant Shares
        issuable upon exercise of the Warrants then outstanding) to deliver to each
        holder of Warrants in exchange for such Warrants, a security of the Acquiring
        Entity evidenced by a written instrument substantially similar in form and
        substance to this Warrant and satisfactory to the holders of the Warrants
        (including an adjusted warrant exercise price equal to the value for the
        Common
        Stock reflected by the terms of such consolidation, merger or sale, and
        exercisable for a corresponding number of shares of Common Stock acquirable
        and
        receivable upon exercise of the Warrants without regard to any limitations
        on
        exercise, if the value so reflected is less than any Applicable Warrant Exercise
        Price immediately prior to such consolidation, merger or sale). Prior to
        the
        consummation of any other Organic Change, the Company shall make appropriate
        provision (in form and substance satisfactory to the holders of Warrants
        representing a majority of the Warrant Shares issuable upon exercise of the
        Warrants then outstanding) to insure that each of the holders of the Warrants
        will thereafter have the right to acquire and receive in lieu of or in addition
        to (as the case may be) the Warrant Shares immediately theretofore issuable
        and
        receivable upon the exercise of such holder's Warrants (without regard to
        any
        limitations on exercise), such shares of stock, securities or assets that
        would
        have been issued or payable in such Organic Change with respect to or in
        exchange for the number of Warrant Shares which would have been issuable
        and
        receivable upon the exercise of such holder's Warrant as of the date of such
        Organic Change (without taking into account any limitations or restrictions
        on
        the Exercisability of this Warrant).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>REGISTRATION
                  RIGHTS AGREEMENT</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">14</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        are
        required to file a registration statement to register the shares underlying
        the
        debentures and the warrants no later than 30 days from June 22, 2006 which
        was
        the date of the first closing. The Company will cause the Registration Statement
        to remain effective until all of the Registrable Securities have been sold.
        The
        Company shall use its best efforts (i) to have the Initial Registration
        Statement declared effective by the SEC no later than one hundred thirty
        five
        (135) days from the date of the first closing. (the "Scheduled Effective
        Deadline") and (ii) to insure that the Initial Registration Statement and
        any
        subsequent Registration Statement remains in effect until all of the Registrable
        Securities have been sold, subject to the terms and conditions of this
        Agreement. In the event the Registration Statement is not filed by the Scheduled
        Filing Deadline or is not declared effective by the SEC on or before the
        Scheduled Effective Date, or if after the Registration Statement has been
        declared effective by the SEC, sales cannot be made pursuant to the Registration
        Statement (whether because of a failure to keep the Registration Statement
        effective, failure to disclose such information as is necessary for sales
        to be
        made pursuant to the Registration Statement, failure to register sufficient
        shares of Common Stock or otherwise) then as partial relief for the damages
        to
        any holder of Registrable Securities by reason of any such delay in or reduction
        of its ability to sell the underlying shares of Common Stock (which remedy
        shall
        not be exclusive of any other remedies at law or in equity), the Company
        will
        pay as liquidated damages (the "Liquidated Damages") to the holder, at the
        holder's option, either a cash amount or shares of the Company's Common Stock
        within three (3) business days, after demand therefore, equal to two percent
        (2%) of the liquidated value of the Convertible Debentures outstanding as
        Liquidated Damages for each thirty (30) day period after the Scheduled Filing
        Deadline or the Scheduled Effective Date as the case may be. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company shall keep the Registration Statement effective pursuant to Rule
        415 at
        all times until the date on which the Investor shall have sold all the
        Registrable Securities covered by such Registration Statement (the "Registration
        Period"), which Registration Statement (including any amendments or supplements
        thereto and prospectuses contained therein) shall not contain any untrue
        statement of a material fact or omit to state a material fact required to
        be
        stated therein, or necessary to make the statements therein, in light of
        the
        circumstances in which they were made, not misleading. The Company shall
        prepare
        and file with the SEC such amendments (including post-effective amendments)
        and
        supplements to a Registration Statement and the prospectus used in connection
        with such Registration Statement, which prospectus is to be filed pursuant
        to
        Rule 424 promulgated under the Securities Act, as may be necessary to keep
        such
        Registration Statement effective at all times during the Registration Period,
        and, during such period, comply with the provisions of the Securities Act
        with
        respect to the disposition of all Registrable Securities of the Company covered
        by such Registration Statement until such time as all of such Registrable
        Securities shall have been disposed of in accordance with the intended methods
        of disposition by the seller or sellers thereof as set forth in such
        Registration Statement. In the case of amendments and supplements to a
        Registration Statement which are required to be filed pursuant to this Agreement
        by reason of the Company's filing a report on Form 10-K, Form 10-Q or Form
        8-K
        or any analogous report under the Securities Exchange Act of 1934, as amended
        (the "Exchange Act"), the Company shall incorporate such report by reference
        into the Registration Statement, if applicable, or shall file such amendments
        or
        supplements with the SEC on the same day on which the Exchange Act report
        is
        filed which created the requirement for the Company to amend or supplement
        the
        Registration Statement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
        expenses incurred in connection with registrations, filings or qualifications
        shall be paid by the Company.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>SECURITIES
                  PURCHASE AGREEMENT</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company and Cornell entered into the Securities Purchase Agreement on June
        19,
        206, pursuant to which the First Closing of the purchase and sale of the
        ConvertibleDebentures took place on June 22, 2006. The Second Closing of
        thepurchase and sale of the Convertible Debentures took place prior to the
        date
        the RegistrationStatement was filed with the SEC, and the Third Closing ofthe
        purchase and sale of the Convertible Debentures shall take place immediately
        followingthe date the Registration Statement is declared effective by the
        SEC</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">15</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        have
        agreed to take all steps necessary in our control to maintain the effectiveness
        and availability of an equity credit line that we already have. We are limited
        in the number and value of puts we may make against the equity credit line
        to
        aggregate gross proceeds of up to $500,000 per sixty (60) day period. However,
        if (a) the Registration Statement has been filed, (b) no Event of Default
        has
        occurred, (c) the Closing Bid Price of the Common Stock is above $5 for five
        consecutive Trading Days, (d) the Closing Bid Price remains above $5.00 on
        the
        day a put is made, then the Company may exceed the limitation set forth above
        and instead make up to two puts per 30 day period using a volume matrix price
        formula, the result of which is based on future stock volume and stock prices
        and it not determinable at this time. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        have
        reserved for issuance to the Buyers 6,000,000 shares for issuance upon
        conversions of the Convertible Debentures and 2,100,000 shares for issuance
        upon
        exercise of the Warrants </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company has paid Yorkville Advisors, LLC a fee of $180,000 of the first
        Debenture Purchase Price, a fee of $180,000 of the second Debenture Purchase
        Price, and will pay a fee of $180,000 of the third Debenture Purchase Price.
        The
        Company paid a structuring fee to Yorkville Advisors, LLC of $15,000. The
        Company paid Yorkville Advisors, LLC a due diligence fee of $5,000.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        issued
        to the Buyer (a) a warrant to purchase 955,000 shares of Common Stock at
        an
        exercise price of $2.50 per share, (b) a warrant to purchase 715,000 shares
        of
        Common Stock at an exercise price of $3.50 per share, and (c) a warrant to
        purchase 430,000 shares of Common Stock at an exercise price of $4.00 per
        share
        (collectively, the "Warrants"). </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cornell
        has represented and agreed that neither it nor any of its affiliates had
        an open
        short position in the Common Stock of the Company, and that it shall not,
        and
        that it will cause its affiliates not to, engage in any short sales of or
        hedging transactions with respect to the Common Stock as long as any Convertible
        Debentures shall remain outstanding</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">So
        long
        as any Convertible Debentures are outstanding, except with respect to the
        Excluded Securities (as defined below), the Company shall not, without the
        prior
        written consent of the Buyer(s), (i) issue or sell shares of Common Stock
        or
        Preferred Stock without consideration or for a consideration per share less
        than
        the bid price of the Common Stock determined immediately prior to its issuance,
        (ii) issue any preferred stock, warrant, option, right, contract, call, or
        other
        security or instrument granting the holder thereof the right to acquire Common
        Stock without consideration or for a consideration less than such Common
        Stock's
        Bid Price determined immediately prior to it's issuance, (iii) enter into
        any
        security instrument granting the holder a security interest in any and all
        assets of the Company, or (iv) file any registration statement on Form S-8,
        except to register up to 1,000,000 shares of common stock issued in connection
        with the Company's employee stock option plan. Notwithstanding the forgoing,
        the
        Company may issue and sell shares pursuant to its equity line of credit.
        For the
        purposes hereof, the term "Excluded Securities" shall mean up to 300,000
        shares
        per 90 day period issued at any time as compensation to employees or
        consultants, provided such shares are issued at current market prices at
        the
        time of issuance.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        obligation of Cornell to accept the Convertible Debentures at the Third Closing
        is subject to the satisfaction, at or before the Third Closing Date, of each
        of
        the following conditions:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Common Stock shall be authorized for quotation on the a Primary Market, trading
        in the Common Stock shall not have been suspended for any reason, and the
        Conversion Shares shall have been approved for listing or quotation on the
        Primary Market.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        representations and warranties of the Company shall be true and correct in
        all
        material respects as of the date when made and as of the Third Closing Date
        as
        though made at that time (except for representations and warranties that
        speak
        as of a specific date) and the Company shall have performed, satisfied and
        complied in all material respects with the covenants, agreements and conditions
        required by this Agreement to be performed, satisfied or complied with by
        the
        Company at or prior to the Third Closing Date.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">16</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company shall have executed and delivered to the Buyer(s) the Convertible
        Debentures.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Registration Statement shall have been declared effective by the
        SEC.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company shall not be in default under any of the Transaction
        Documents.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
        conditions to the First Closing and the Second Closing shall have been
        performed.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company shall have certified, in a certificate executed by two officers of
        the
        Company and dated as of the Third Closing Date, that all conditions to the
        Third
        Closing have been satisfied.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>THE
                  AMENDMENT TO THE SECURITIES PURCHASE AGREEMENT</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
        the
        request of the American Stock Exchange we added explicit language to the
        Securities Purchase Agreement to set forth that the aggregate number of shares
        that could be issued in the transaction with Cornell shall not be greater
        than
        9,215,406 shares (which does not exceed 19.99% of the 46,308,573 outstanding
        shares of Common Stock as of the date of the Securities Purchase Agreement),
        until the Obligor's shareholders approve (without the vote of any shares
        acquired in this transaction and related transactions) the issuance of the
        Total
        Transaction Shares.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

            <tr valign="top" style="line-height: 1.25;">
              <td align="left" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.</font></td>
              <td align="left">
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>TWO
                  SECURITY AGREEMENTS</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        and
        two of our subsidiaries gave Cornell a security interest in some
        assets.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Parent
        Security Agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        consideration of the debentures and warrant transactions, we granted to Cornell
        a security interest in:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
        goods
        including, without limitation, machinery, equipment, furniture, furnishings,
        fixtures, signs, lights, tools, parts, supplies and motor vehicles of every
        kind
        and description owned by the Company or in which the Company may
        have.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
        inventory including, but not limited to, all goods, wares, merchandise, parts,
        supplies, finished products, other tangible personal property, including
        such
        inventory as is temporarily out of Company's custody or possession and including
        any returns upon any accounts or other proceeds, including insurance proceeds,
        resulting from the sale or disposition of any of the foregoing;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
        contract rights and general intangibles, including, without limitation,
        goodwill, trademarks, trade styles, trade names, leasehold interests,
        partnership or joint venture interests, patents and patent applications,
        copyrights, deposit accounts;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
        documents, warehouse receipts, instruments and chattel paper of the
        Company;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
        accounts and other receivables, instruments or other forms of obligations
        and
        rights to payment. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(f)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
        the
        extent assignable, all rights under all present and future authorizations,
        permits, licenses and franchises issued or granted in connection with the
        operations of any of its facilities</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">17</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(g)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">except
        with respect to SCS Corporation and SCS Guinea SARL or any other interest,
        direct or indirect, that the subsidiaries may have or acquire in connection
        with
        Guinea, all equity interests, securities or other instruments in other
        companies, including, without limitation, any subsidiaries, investments or
        other
        entities (whether or not controlled); and;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(h)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">all
        products and proceeds (including, without limitation, insurance proceeds)
        from
        the above-described Pledged Property.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Pledged Property shall specifically exclude any and all interests in SCS
        Corporation and SCS Guinea SARL and any other interest, direct or indirect,
        now
        or in the future in connection with Guinea, and nothing herein shall be deemed
        to encumber any assets of either SCS Corporation or SCS Guinea SARL or any
        other
        interest, direct or indirect, that the subsidiaries may have or acquire in
        connection with Guinea.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subsidiary
        Security Agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        consideration of the debenture and warrant transactions, two of our
        subsidiaries, Trendsetter Production Company and HYD Resources Corporation,
        granted to Cornell a security interest in effectively all of their
        assets.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

            <tr valign="top" style="line-height: 1.25;">
              <td align="left" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.</font></td>
              <td align="left">
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>IRREVOCABLE
                  TRANSFER AGENT INSTRUCTIONS</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        gave
        our transfer agent irrevocable instructions on the procedure to follow when
        issuing shares to Cornell whereby the transfer agent will issue shares to
        Cornell upon delivery to the transfer agent of a conversion notice or an
        exercise notice. The shares to be issued will have no restricted legend.
        We have
        appointed an escrow agent to deliver the notices from Cornell to the transfer
        agent. Acts, errors, commissions or omission of the escrow agent shall not
        cause
        a default of the irrevocable transfer agent instructions, nor a default of
        any
        related agreement. The transfer agent shall rely exclusively on the notice
        and
        shall have no liability for relying on such notice. Any notice constitutes
        an
        irrevocable instruction to the transfer agent to process such notices. We
        agreed
        that it shall we will not replace the transfer agent without the prior written
        consent of Cornell. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>THE
        OFFERING</u></strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="14%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Outstanding
                  Common Stock Before This Offering</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td align="left" valign="top" width="84%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">46,308,573
                  (as of&#160;June 29, 2006).</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="middle" width="14%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td width="2%">&#160;</td>
              <td align="left" valign="top" width="84%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="14%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
                  Stock Offered</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td align="left" valign="top" width="84%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Up
                  to 5,100,000 shares of common stock underlying the 3 convertible
                  debenture
                  and the 2,100,000 warrants to be issued to Selling
                  Stockholders.</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="middle" width="14%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td width="2%">&#160;</td>
              <td align="left" valign="top" width="84%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="14%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Outstanding
                  Common Stock After This Offering</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td align="left" valign="top" width="84%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">51,408,573
                  shares (if all offered shares are sold).</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="middle" width="14%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td width="2%">&#160;</td>
              <td align="left" valign="top" width="84%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="14%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Offering
                  Price&#160;</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td align="left" valign="top" width="84%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Determined
                  at the time of sale by the Selling Stockholders.</font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="middle" width="14%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td width="2%">&#160;</td>
              <td align="left" valign="top" width="84%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="14%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td align="left" valign="top" width="84%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
                  will not receive any proceeds from the sale of the common stock
                  offered by
                  the Selling Stockholders that may be sold pursuant to this prospectus.
                  However, we may receive proceeds of up to </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$6,610,000
                  </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">from
                  the exercise of the warrants overlying some of the common stock
                  only if
                  Cornell utilizes the cash method of exercise. </font></div>
              </td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="middle" width="14%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td width="2%">&#160;</td>
              <td align="left" valign="top" width="84%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
            </tr>
            <tr bgcolor="#cceeff">
              <td align="left" valign="top" width="14%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Risk
                  Factors</font></div>
              </td>
              <td width="2%">&#160;</td>
              <td align="left" valign="top" width="84%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  securities offered hereby involve a high degree of risk. See &#8220;Risk
                  Factors&#8221; on page 32. </font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">18</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%; TEXT-ALIGN: center" align="right">
          </div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>RISK
        FACTORS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">You
        should carefully consider the following risk factors before purchasing our
        common stock. The risks and uncertainties described below are not the only
        ones
        we face. There may be additional risks and uncertainties that are not known
        to
        us or that we do not consider to be material at this time. If the events
        described in these risks occur, our business, financial condition and results
        of
        operations would likely suffer. This prospectus contains forward-looking
        statements that involve risks and uncertainties. Our actual results may differ
        significantly from the results discussed in the forward-looking statements.
        This
        section discusses the risk factors that might cause those
        differences.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Risks
        about the Oil and Gas Industry</u></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>OIL
        AND GAS PRICES ARE VOLATILE.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
        revenues, cash flow, operating results, financial condition and ability to
        borrow funds or obtain additional capital depend substantially on the prices
        that we receive for oil and gas production. Declines in oil and gas prices
        may
        adversely affect our financial condition, liquidity, ability to obtain financing
        and operating results. Lower oil and gas prices also may reduce the amount
        of
        oil and gas that we can produce economically. High oil and gas prices could
        preclude acceptance of our business model. Depressed prices in the future
        could
        have a negative effect on our future financial results. Historically, oil
        and
        gas prices and markets have been volatile, with prices fluctuating widely,
        and
        they are likely to continue to be volatile. Prices for oil and gas are subject
        to wide fluctuations in response to relatively minor changes in supply and
        demand, market uncertainty and a variety of additional factors that are beyond
        our control. These factors include:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 45pt;">&#160;</td>
              <td style="width: 27pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                  domestic and foreign supplies of
                  oil;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 45pt;">&#160;</td>
              <td style="width: 27pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                  level of consumer product demand;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 45pt;">&#160;</td>
              <td style="width: 27pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">weather
                  conditions;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 45pt;">&#160;</td>
              <td style="width: 27pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">political
                  conditions in oil producing regions, including the Middle
                  East;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 45pt;">&#160;</td>
              <td style="width: 27pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                  ability of the members of the Organization of Petroleum Exporting
                  Countries to agree to and maintain oil price and production
                  controls;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 45pt;">&#160;</td>
              <td style="width: 27pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                  price of foreign imports;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 45pt;">&#160;</td>
              <td style="width: 27pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">actions
                  of governmental authorities;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 45pt;">&#160;</td>
              <td style="width: 27pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">domestic
                  and foreign governmental
                  regulations;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 45pt;">&#160;</td>
              <td style="width: 27pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                  price, availability and acceptance of alternative
                  fuels;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 45pt;">&#160;</td>
              <td style="width: 27pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">overall
                  economic conditions.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">These
        factors and the volatile nature of the energy markets make it impossible
        to
        predict with any certainty future oil and gas prices. Our inability to respond
        appropriately to changes in these factors could negatively affect our
        profitability.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>INVESTMENT
        IN THE OIL AND GAS BUSINESS IS RISKY.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Oil
        and
        gas exploration and development are inherently speculative activities. There
        is
        no certain method to determine whether or not a given lease will produce
        oil or
        gas or yield oil or gas in sufficient quantities and quality to result in
        commercial production. There is always the risk that development of a lease
        may
        result in dry holes or in the discovery of oil or gas that is not commercially
        feasible to produce. There is no guarantee that a producing asset will continue
        to produce. Because of the high degree of risk involved, there can be no
        assurance that we will recover any portion of our investment or that our
        investment in leases will be profitable.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>THERE
        ARE DRILLING AND OPERATIONAL HAZARDS.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        oil
        and gas business involves a variety of operating risks, including:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">blowouts,
                  cratering and explosions;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">mechanical
                  and equipment problems;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">uncontrolled
                  flows of oil and gas or well
                  fluids;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">fires;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">marine
                  hazards with respect to offshore
                  operations;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">formations
                  with abnormal pressures;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">pollution
                  and other environmental risks;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">natural
                  disasters.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
        of
        these events could result in loss of human life, significant damage to property,
        environmental pollution, impairment of our operations and substantial losses.
        Locating pipelines near populated areas, including residential areas, commercial
        business centers and industrial sites, could increase these risks. In accordance
        with customary industry practice, we will maintain insurance against some,
        but
        not all, of these risks and losses. The occurrence of any of these events
        not
        fully covered by insurance could have an adverse effect on our financial
        position and results of operations.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">19</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%; TEXT-ALIGN: center" align="right">
          </div>
        </div>
      </div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WE
        ARE SUBJECT TO GOVERNMENTAL REGULATIONS.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Oil
        and
        gas operations in the United States are subject to extensive government
        regulation and to interruption or termination by governmental authorities
        on
        account of ecological and other considerations. The Environmental Protection
        Agency of the United States and the various state departments of environmental
        affairs closely regulate gas and oil production effects on air, water and
        surface resources. Furthermore, proposals concerning regulation and taxation
        of
        the gas and oil industry are constantly before Congress. It is impossible
        to
        predict future proposals that might be enacted into law and the effect they
        might have on us. Thus, restrictions on gas and oil activities, such as
        production restrictions, price controls, tax increases and pollution and
        environmental controls may have an adverse effect on us.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>THE
        OIL AND GAS INDUSTRY IS SUBJECT TO HAZARDS RELATED TO POLLUTION AND
        ENVIRONMENTAL ISSUES.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hazards
        in the drilling and/or the operation of gas and oil properties, such as
        accidental leakage or spillage, are sometimes encountered. Such hazards may
        cause substantial liabilities to third parties or governmental entities,
        the
        payment of which could reduce distributions or result in the loss of our
        leases.
        Although it is anticipated that insurance will be obtained by third party
        operators for our benefit, we may be subject to liability for pollution and
        other damages due to environmental events which cannot be insured against
        due to
        prohibitive premium costs, or for other reasons. Environmental regulatory
        matters also could increase substantially the cost of doing business, may
        cause
        delays in producing oil and gas or require the modification of operations
        in
        certain areas.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
        operations are subject to numerous stringent and complex laws and regulations
        at
        the Federal, state and local levels governing the discharge of materials
        into
        the environment or otherwise relating to environmental protection. Failure
        to
        comply with these laws and regulations may result in the assessment of
        administrative, civil and criminal penalties, the imposition of remedial
        requirements, and the imposition of injunctions to force future
        compliance.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Oil
        Pollution Act of 1990 and its implementing regulations impose a variety of
        requirements related to the prevention of oil spills, and liability for damages
        resulting from such spills in United States waters. OPA 90 imposes strict
        joint
        and several liability on responsible parties for oil removal costs and a
        variety
        of public and private damages, including natural resource damages. While
        liability limits apply in some circumstances, a party cannot take advantage
        of
        liability limits if the spill was caused by gross negligence or willful
        misconduct or resulted from violation of a Federal safety, construction or
        operation regulation. If a party fails to report a spill or to cooperate
        fully
        in a cleanup, liability limits likewise do not apply. Even if applicable,
        the
        liability limits for offshore facilities require the responsible party to
        pay
        all removal costs, plus up to $75 million in other damages. For onshore
        facilities, the total liability limit is $350 million. OPA 90 also requires
        a
        responsible party at an offshore facility to submit proof of its financial
        ability to cover environmental cleanup and restoration costs that could be
        incurred in connection with an oil spill.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Comprehensive Environmental Response, Compensation, and Liability Act, also
        known as the &#8220;Superfund&#8221; law, and analogous state laws impose joint and several
        liability on certain classes of persons that are considered to have contributed
        to the release of a &#8220;hazardous substance&#8221; into the environment. These parties
        include the owner or operator of the site where the release occurred, and
        those
        that disposed or arranged for the disposal of hazardous substances found
        at the
        site. Responsible parties under CERCLA may be subject to joint and several
        liability for remediation costs at the site, and may also be liable for natural
        resource damages. Additionally, it is not uncommon for neighboring landowners
        and other third parties to file tort claims for personal injury and property
        damage allegedly caused by hazardous substances released into the
        environment.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">State
        and
        local statutes and regulations require permits for drilling operations, drilling
        bonds and reports concerning operations. In addition, there are state statutes,
        rules and regulations governing conservation matters, including the unitization
        or pooling of oil and gas properties, establishment of maximum rates of
        production from oil and gas wells and the spacing, plugging and abandonment
        of
        such wells. Such statutes and regulations may limit the rate at which oil
        and
        gas could otherwise be produced from our properties and may restrict the
        number
        of wells that may be drilled on a particular lease or in a particular
        field.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Risks
        About Our Business</u></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>GEOPOLITICAL
        INSTABILITY.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        conduct business in Guinea, which is in a region of the world where there
        have
        been recent civil wars, revolutionary wars, and internecine conflicts. Although
        Guinea is a peaceful nation, external or internal political forces could
        potentially create a political or military climate that might cause a change
        in
        political leadership or the outbreak of hostilities. Such a change could
        result
        in our having to cease our Guinea operations and result in the loss or delay
        of
        our rights under the PSA.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>GEOPOLITICAL
        POLITICS.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        could
        lose the Guinea acreage. We are presently operating under a farmout from
        a PSA
        through USOil Corporation (&#8220;USOil&#8221;). However, in the recent past USOil told us
        that the PSA had been terminated by the &#8220;proper authority.&#8221;&#160;Subsequently
        the government of Guinea told us that the termination did not come from the
        proper authority. If the PSA is determined to have been lawfully terminated
        or
        if we are unable to negotiate a new PSA with the government, we will lose
        the
        Guinea acreage. That outcome would mean that we would not be able to drill
        for
        oil and gas in Guinea.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WE
        MAY HAVE WRITE DOWNS OF OUR ASSETS DUE TO PRICE
        VOLATILITY.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SEC
        accounting rules require us to review the carrying value of our oil and gas
        properties on a quarterly basis for possible write down or impairment. Under
        these rules, capitalized costs of proved reserves may not exceed a ceiling
        calculated at the present value of estimated future net revenues from those
        proved reserves. Capital costs in excess of the ceiling must be permanently
        written down. A decline in oil and natural gas prices could cause a write
        down
        which would negatively affect our net income.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">20</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%; TEXT-ALIGN: center" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ESTIMATES
        OF OIL AND GAS RESERVES ARE UNCERTAIN AND MAY VARY SUBSTANTIALLY FROM ACTUAL
        PRODUCTION.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        do not
        have any reserve reports or geology or petroleum engineering reports. There
        are
        numerous uncertainties inherent in estimating quantities of proved reserves
        and
        in projecting future rates of production and timing of expenditures, including
        many factors beyond our control. A reserve report is the estimated quantities
        of
        oil and gas based on reports prepared by third party reserve engineers. Reserve
        reporting is a subjective process of estimating underground accumulations
        of oil
        and natural gas that cannot be measured in an exact manner. The accuracy
        of any
        reserve estimate is a function of the quality of available geological,
        geophysical, engineering and economic data and the precision of engineering
        and
        judgment. As a result, estimates of different engineers often vary. The
        estimates of reserves, future cash flows and present value are based on various
        assumptions, including those prescribed by the SEC relating to oil and natural
        gas prices, drilling and operating expenses, capital expenditures, taxes
        and
        availability of funds, and are inherently imprecise.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>THE
        UNAVAILABILITY OR HIGH COST OF DRILLING RIGS, EQUIPMENT, SUPPLIES, PERSONNEL
        AND
        OILFIELD SERVICES COULD ADVERSELY IMPACT US.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Drilling
        activity offshore Guinea will require that we have access to an offshore
        drilling rig. Either unavailability, shortages or increases in the cost of
        drilling rigs, equipment, supplies or personnel could delay or adversely
        affect
        our Guinea operations. There can be no assurance that we will be able to
        obtain
        the necessary equipment or that services will be available at economical
        prices.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FAILURE
        TO FIND OIL AND GAS.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        may
        not be able to find oil and gas in commercial quantities, and if not, our
        future
        revenue potential would be substantially reduced.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WE
        MAY BE UNABLE TO ACQUIRE OIL AND GAS LEASES.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
        engage
        in oil and gas exploration, we must first acquire rights to conduct exploration
        and recovery activities on identified prospects. We may not be successful
        in
        acquiring farmouts, permits, lease options, leases or other rights to explore
        for or recover oil and gas. Other major and independent oil and gas companies
        with financial resources significantly greater than ours may bid against
        us for
        the purchase of oil and gas leases. If we or our subsidiaries are unsuccessful
        in acquiring these leases, permits, options and other interests, our prospect
        inventory for exploration and drilling could be significantly reduced, and
        our
        business, results of operations and financial condition could be substantially
        harmed.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EXPANSION
        OF OUR EXPLORATION PROGRAM WILL REQUIRE CAPITAL FROM OUTSIDE
        SOURCES.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        do not
        currently have the financial resources to explore and drill all of our currently
        identified prospects. Absent raising additional capital or entering into
        joint
        venture agreements, we will not be able to increase our exploration and drilling
        operations at the projected rate. This could limit the size of our business.
        There is no assurance that capital will be available in the future to us
        or that
        capital will be available under terms acceptable to us. We will need to raise
        additional money, either through the sale of equity securities (which could
        dilute the existing stockholders' interest), through the entering of joint
        venture agreements (which, while limiting our risk, could reduce our ownership
        interest in particular assets), or from borrowings from third parties (which
        could result in additional assets being pledged as collateral and which would
        increase our debt service requirements).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Additional
        capital could be obtained from a combination of funding sources, many of
        which
        could have an adverse effect on our business, results of operations and
        financial condition. These potential funding sources, and the potential adverse
        effects attributable thereto, include:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">cash
                  flow from operating activities, which is sensitive to prices we
                  receive
                  for oil and natural gas and the success of current and future
                  operations;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">borrowings
                  from financial institutions, which may subject us to certain restrictive
                  covenants, including covenants restricting our ability to raise
                  additional
                  capital or pay dividends;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">debt
                  offerings, which would increase our leverage and add to our need
                  for cash
                  to service such debt (which could result in additional assets being
                  pledged as collateral and which could increase our debt service
                  requirements);</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">additional
                  offerings of equity securities, which would cause dilution of our
                  common
                  stock;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">sales
                  of prospects generated by the exploration program, which would
                  reduce
                  future revenues from that program;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">additional
                  sales of interests in our projects, which could reduce future
                  revenues.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
        ability to raise additional capital will depend on the results of operations
        and
        the status of various capital and industry markets at the time such additional
        capital is sought. Capital may not become available to us from any particular
        source or at all. Even if additional capital becomes available, it may not
        be on
        terms acceptable to us. Failure to obtain additional financing on acceptable
        terms may have an adverse effect on our business, results of operations and
        financial condition.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WE
        HAVE COMPETITION FROM OTHER COMPANIES.</strong></font></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">21</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%; TEXT-ALIGN: center" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
        large
        number of companies and individuals engage in drilling for gas and oil, and
        there is competition for the most desirable prospects. We will encounter
        intense
        competition from other companies and other entities in the sale of our gas
        and
        oil production. We could be competing with numerous gas and oil companies
        which
        may have financial resources significantly greater than ours. Further, the
        quantities of gas and oil to be delivered by us may be affected by factors
        beyond our control, such as the inability of the wells to deliver at the
        necessary quality and pressure, premature exhaustion of reserves, changes
        in
        governmental regulations affecting allowable production and priority
        allocations, and price limitations imposed by Federal and state regulatory
        agencies.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WE
        DEPEND ON INDUSTRY VENDORS AND MAY NOT BE ABLE TO OBTAIN ADEQUATE
        SERVICES.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        are
        and will continue to be dependent on industry vendors for the success of
        our oil
        and gas exploration projects. These contracted services include, but are
        not
        limited to, accounting, drilling, completion, workovers (remedial down hole
        work
        on a well) and reentries (entering an existing well and changing the direction
        and/or depth of a well), geological evaluations, engineering, leasehold
        acquisition (landmen), operations, legal, investor relations/public relations,
        and prospect generation. We could be harmed if we fail to attract quality
        industry vendors to participate in the drilling of prospects which we identify
        or if our industry vendors do not perform satisfactorily. We often have,
        and
        will continue to have, little control over factors that would influence the
        performance of our vendors.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WE
        RELY ON THIRD PARTIES FOR PRODUCTION SERVICES AND PROCESSING
        FACILITIES.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        marketability of our production depends upon the proximity of our reserves
        to,
        and the capacity of, facilities and third party services, including oil and
        natural gas gathering systems, pipelines, trucking or terminal facilities,
        and
        processing facilities. The unavailability or lack of capacity of such services
        and facilities could result in the shut-in of producing wells or the delay
        or
        discontinuance of development plans for properties. A shut-in or delay or
        discontinuance could adversely affect our financial condition. In addition,
        Federal and state regulation of oil and natural gas production and
        transportation affect our ability to produce and market oil and natural gas
        on a
        profitable basis.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>OUR
        APPROACH TO TITLE ASSURANCE COULD ADVERSELY AFFECT OUR BUSINESS AND
        OPERATIONS.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        intend
        to purchase oil and gas interests and leases from third parties or directly
        from
        the mineral fee owners as the inventory upon which we will perform our
        exploration activities. The existence of a title deficiency can render a
        lease
        worthless and can result in a large expense to us. Title insurance covering
        the
        mineral leaseholds is not generally available and in all instances, we forego
        the expense of retaining lawyers to examine the title to the mineral interest
        to
        be placed under lease or already placed under lease until the drilling block
        is
        assembled and ready to be drilled. We rely upon the judgment of oil and gas
        lease brokers or experienced landmen who perform the field work in examining
        records in the appropriate governmental office before attempting to acquire
        or
        place under lease a specific mineral interest. This is customary practice
        in the
        oil and gas industry. However, if there is a defect in title, the amount
        that we
        paid for such oil and gas leases or interests is generally lost. If the
        defective lease covers acreage which is critical to the success of a particular
        project, the loss could have an adverse effect by making the target area
        potentially undrillable.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>RISKS
        RELATED TO OUR FINANCIAL OPERATIONS</u></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WE
        HAVE A HISTORY OF LOSSES.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        have
        experienced substantial operating losses. We expect to incur significant
        operating losses until sales increase. We will also need to raise sufficient
        funds to finance our activities. We may be unable to achieve or sustain
        profitability.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WE
        HAVE AN ACCUMULATED DEFICIT AND MAY INCUR ADDITIONAL
        LOSSES.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        have a
        substantial accumulated deficit. We may not be able to meet our debts as
        they
        become due. If we are unable to generate sufficient cash flow or obtain funds
        to
        pay debt, we will be in default.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WE
        MAY EXPERIENCE POTENTIAL FLUCTUATIONS IN RESULTS OF
        OPERATIONS.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
        future revenues may be affected by a variety of factors, many of which are
        outside our control, including (a) the success of project results; (b) swings
        in
        availability of drilling services needed to implement projects and the pricing
        of such services; (c) a volatile oil and gas pricing market which may make
        certain projects that we undertake uneconomic; (d) the ability to attract
        new
        independent professionals with prospects in a timely and effective manner;
        and
        (e) the amount and timing of operating costs and capital expenditures relating
        to conducting our business operations and infrastructure. As a result of
        our
        limited operating history and the emerging nature of our business plan, it
        is
        difficult to forecast revenues or earnings accurately, which may fluctuate
        significantly from quarter to quarter.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>IF
        WE CANNOT OBTAIN ADDITIONAL FINANCING, WE MAY HAVE TO CURTAIL OPERATIONS
        AND MAY
        ULTIMATELY CEASE TO EXIST.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
        financial statements reflect recurring, ongoing and substantial yearly net
        losses, and negative cash flows from operations. These conditions require
        sufficient additional funding or alternative sources of capital to meet our
        working capital needs. We have raised capital by selling common stock, issuing
        convertible debentures and our equity line of credit which will also requires
        us
        to issue common stock. However, future financing may not be available in
        amounts
        or on terms acceptable to us, if at all. If we cannot raise funds on acceptable
        terms, or achieve positive cash flow, we may be forced to curtail operations
        or
        may ultimately cease to exist.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WE
        MAY NOT BE ABLE TO RAISE THE REQUIRED CAPITAL TO CONDUCT OUR OPERATIONS;
        EQUITY
        LINE OF CREDIT.</strong></font></div><br>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">22</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%; TEXT-ALIGN: center" align="right">
          </div>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        may
        require additional capital resources in order to conduct our operations.
        If we
        cannot obtain additional funding, we may make reductions in the scope and
        size
        of our operations. In order to grow and expand our business, and to introduce
        our services to the marketplace, we will need to raise additional funds.
        We have
        an equity line of credit. We have made 5 puts on the equity line of credit
        since
        February 2006 in the aggregate amount of $967,00. At June 23, 2006, the
        remaining amount available for us to draw down on the equity line of credit
        is
        $19,032,900. The equity line of credit expires in February 2009, after which
        we
        will not be able to draw down on the equity line of credit even if has not
        been
        fully utilized by us. The Cornell agreements limit our use of the equity
        line of
        credit. Whether as a result of the Cornell Agreements or as a result of our
        discretion, between now and February 2009, we may not have drawn down the
        full
        $19,032,900 currently available in the equity line of credit. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>RISKS
        ABOUT OUR SECURITIES</u></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WE
        MAY ISSUE ADDITIONAL SHARES OF COMMON STOCK IN THE FUTURE, WHICH COULD CAUSE
        DILUTION TO ALL SHAREHOLDERS.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        may
        seek to raise additional equity capital in the future. Any issuance of
        additional shares of our common stock will dilute the percentage ownership
        interest of all shareholders and may dilute the book value per share of our
        common stock.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SHAREHOLDERS
        COULD INCUR NEGATIVE IMPACT DUE TO THE REMOVAL OF THE LEGEND ON A SIGNIFICANT
        PERCENTAGE OF OUR OUTSTANDING SHARES OF COMMON STOCK, OR THE EXERCISE OF
        OPTIONS
        AND WARRANTS.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        of&#160;June 26, 2006, approximately 9,320,146 shares of our common stock was
        restricted stock some of which was eligible to be sold immediately pursuant
        Rule
        144 of the Securities Act of 1933, as amended. We have outstanding approximately
        6,6,088,778 warrants and options (excluding the 2,100,000 warrants issued
        to
        Cornell). If these options and warrants are exercised, the underlying shares
        will ultimately become subject to resale pursuant to Rule 144. We do not
        know
        when or if these options will be exercised. In the event that a substantial
        number of these shares are offered for sale in the market by several holders,
        the market price of our common stock could be adversely affected.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SHAREHOLDERS
        COULD INCUR NEGATIVE IMPACT DUE TO THE SALE OF THE SHARES IN THIS
        OFFERING.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        registration of 5,100,000 shares in this registration statement will also
        increase the number of common shares which could be sold in the public market.
        The availability of public trading for such a large number of shares may
        have an
        adverse effect on the trading prices of our common stock. No prediction can
        be
        made as to the effect, if any, that sales of shares of our common stock or
        the
        availability of such shares for sale will have on the market prices prevailing
        from time to time. Nevertheless, the possibility that substantial amounts
        of
        common stock may be sold in the public market would likely have an adverse
        effect on prevailing market prices for the common stock.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>OUR
        MANAGEMENT CONTROLS A SIGNIFICANT PERCENTAGE OF OUR CURRENT OUTSTANDING COMMON
        STOCK; THEIR INTERESTS MAY CONFLICT WITH THOSE OF OUR
        SHAREHOLDERS.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        of&#160;June 26, 2006, our Directors and Executive Officers and their affiliates
        collectively and beneficially owned approximately 38 % of our outstanding
        common
        stock, including all warrants exercisable within 60 days of the date of this
        prospectus. This concentration of voting control gives our Directors and
        Executive Officers and their respective affiliates substantial influence
        over
        any matters which require a shareholder vote, including, without limitation,
        the
        election of Directors, even if their interests may conflict with those of
        other
        shareholders. It could also have the effect of delaying or preventing a change
        in control of or otherwise discouraging a potential acquirer from attempting
        to
        obtain control of us. This could have an adverse effect on the market price
        of
        our common stock or prevent our shareholders from realizing a premium over
        the
        then prevailing market prices for their shares of common stock.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>IF
        WE ISSUE SECURITIES PURSUANT TO THE EQUITY LINE OF CREDIT, THEN EXISTING
        STOCKHOLDERS MAY EXPERIENCE SIGNIFICANT DILUTION.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        utilize an equity line of credit. The sale of shares pursuant to equity line
        of
        credit will have a dilutive impact on our stockholders. As a result, our
        net
        income per share could decrease in future periods, and the market price of
        our
        common stock could decline. In addition, the lower our stock price at the
        time
        we exercise draw down on the equity line of credit, the more shares we will
        have
        to issue. If our stock price decreases, then our existing stockholders would
        experience greater dilution.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>IMPACT
        OF THE EQUITY LINE OF CREDIT </strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        we
        draw down on the equity line of credit, our such common stock will be purchased
        at or less than the then market price. Sales of such common stock could cause
        the market price of our common stock to decline.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>OUR
        STOCK PRICE IS HIGHLY VOLATILE AND YOU MAY LOSE SOME OR ALL OF YOUR
        INVESTMENT.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Trading
        prices of our common stock may fluctuate in response to a number of events
        and
        factors, such as:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">general
                  economic conditions changes in interest
                  rates;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">conditions
                  or trends in the oil and gas
                  business;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">fluctuations
                  in the stock market in general and market prices for oil and gas
                  companies
                  in particular;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">23</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%; TEXT-ALIGN: center" align="right">
          </div>
        </div>
      </div><br>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">quarterly
                  variations in our operating
                  results;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">new
                  products, services, innovations, and strategic developments by
                  our
                  competitors or us, or business combinations and investments by
                  our
                  competitors or us;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">changes
                  in environmental regulation;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">changes
                  in our capital structure, including issuance of additional debt
                  or equity
                  to the public;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">additions
                  or departures of our key personnel;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">corporate
                  restructurings, including layoffs or closures of
                  facilities;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">&#160;</td>
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">certain
                  analyst reports, news and
                  speculation.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
        of
        these events may cause our stock price to rise or fall and may adversely
        affect
        our business and financing opportunities.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WE
        DO NOT INTEND TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE; THEREFORE, YOU
        MAY
        NEVER SEE A RETURN ON YOUR INVESTMENT.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        do not
        anticipate the payment of cash dividends on our common stock in the foreseeable
        future. We anticipate that any profits from our operations will be devoted
        to
        our future operations. Any decision to pay dividends will depend upon our
        profitability at the time, cash available and other factors.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>THE
        SHARES AVAILABLE FOR SALE BY THE SELLING STOCKHOLDERS COULD SIGNIFICANTLY
        REDUCE
        THE MARKET PRICE OF OUR COMMON STOCK.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
        total
        of 5,100,000 shares of our common stock are being registered for resale under
        this prospectus. The market price of our common stock could drop if a
        substantial amount of these shares are sold in the public market. A drop
        in the
        market price will reduce the value of your investment.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SELLING
        STOCKHOLDERS MAY SELL SECURITIES AT ANY PRICE OR TIME WHICH COULD REDUCE
        THE
        MARKET PRICE OF OUR COMMON STOCK.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Selling Stockholders may offer and sell their shares at prices and times
        determined by them. However, the Selling Stockholders are not required to
        engage
        in any stock selling at all. The timing of sales and the prices at which
        the
        shares are sold by the Selling Stockholders could have an adverse effect
        upon
        the public market for our common stock. If the Selling Stockholders offer
        or
        sell their shares at less than the then prevailing market price, our stock
        price
        may decline.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SINCE
        WE HAVE NOT PAID ANY DIVIDENDS ON OUR COMMON STOCK AND DO NOT INTEND TO DO
        SO IN
        THE FUTURE, A PURCHASER OF OUR COMMON STOCK WILL ONLY REALIZE A GAIN ON THEIR
        INVESTMENT IF THE MARKET PRICE OF OUR COMMON STOCK
        INCREASES.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        have
        never paid, and do not intend to pay, any cash dividends on our common Stock
        for
        the foreseeable future. An investor in this offering, in all likelihood,
        will
        only realize a profit on their investment if the market price of our common
        stock increases in value.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>MATERIAL
        RISKS RELATED TO OUR CORPORATE GOVERNANCE</u></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>OUR
        DIRECTORS AND OFFICERS HAVE RIGHTS TO INDEMNIFICATION.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Delaware General Corporation Law provides that we will indemnify our directors
        and officers if they are a party to any civil or criminal action. This may
        discourage&#160;claimants from making claims against the directors and officers
        even if the claims have merit. The cost of indemnification could be
        high.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Insofar
        as indemnification for liabilities arising under the Securities Act may be
        permitted to our directors, officers and controlling persons pursuant to
        the
        foregoing provisions, we have been advised that in the opinion of the Securities
        and Exchange Commission, such indemnification is against public policy as
        expressed in the Securities Act and is therefore unenforceable.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a name="a5"/>&#160;</div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">24</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
    </div>
    <div>&#160;</div>
    <div>
      <div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><a name="a4"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>INFORMATION
          ABOUT</strong></font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FORWARD-LOOKING
          STATEMENTS</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Some
          of
          the statements contained in this prospectus, including, without limitation,
          statements containing the words &#8220;believes,&#8221; &#8220;anticipates,&#8221; &#8220;expects,&#8221; and other
          words of similar import, are &#8220;forward-looking statements.&#8221;&#160;Forward-looking
          statements involve known and unknown risks, uncertainties and other factors
          which may cause our actual results, performance or achievements to be materially
          different from any future results, performance, or achievements expressed
          or
          implied by forward-looking statements. Given these uncertainties, readers
          are
          cautioned not to place undue reliance on forward-looking
          statements.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a name="a5"/>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SELECTED
          FINANCIAL DATA</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SELECTED
          ANNUAL FINANCIAL DATA&#160;</strong></font></div>
        <div>
          <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2005</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2004</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2003</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2002</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2001</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">172,699</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">38,344</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">468,022</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">355,628</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">426,601</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%">&#160;</td>
                <td width="2%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
                <td align="right" valign="bottom" width="9%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
                <td align="right" valign="bottom" width="9%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
                <td align="right" valign="bottom" width="9%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
                <td align="right" valign="bottom" width="9%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
                <td align="right" valign="bottom" width="9%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                    from Operations</font></div>
                </td>
                <td width="2%" style="border-bottom: white solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(4,899,905</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,116,914</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,414,700</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,012,759</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,881,129</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NET
                    LOSS CHARGEABLE TO COMMON SHAREHOLDERS</font></div>
                </td>
                <td width="2%" style="border-bottom: white solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(5,344,570</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,677,821</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,645,316</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,180,866</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,911,971</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Basic
                    and Diluted loss per common share</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.13</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.12</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.12</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.18</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.21</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Weighted
                    average shares outstanding</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">41,646,844</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">31,938,926</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">22,580,526</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,426,561</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,655,960</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Working
                    Capital (deficit)</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,413,761</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,624,848</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,266,584</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(723,960</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,083,108</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Capital
                    Expenditure (deficit)</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,889,993</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,973,424</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">147,002</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(5,250</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(999,170</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Long
                    Term Liabilities</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,696</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">725,604</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">255,793</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">183,345</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">81,292</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stockholders'
                    Equity</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,145,449</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,660,190</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(317,101</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">367,388</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">84,737</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                    Assets</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,209,322</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,282,662</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,480,294</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,424,966</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,568,939</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SELECTED
          QUARTERLY FINANCIAL DATA (Unaudited)</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
          <div>
            <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                <tr>
                  <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                  <td colspan="5" valign="bottom" width="25%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Nine
                      months ended</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="bottom" width="71%" style="border-bottom: medium none;">&#160;</td>
                  <td width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="bottom" width="71%" style="border-bottom: medium none;">&#160;</td>
                  <td width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
                      31,</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
                      31,</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2005</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="bottom" width="71%" style="border-bottom: medium none;">&#160;</td>
                  <td width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                  </td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">329,052</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                  </td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">148,693</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                      from operations</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                  </td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(4,402,573</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                  </td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,282,223</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                      loss chargeable to common&#160;shareholders</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                  </td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(5,793,977</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                  </td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,681,256</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Basic
                      and diluted loss per common share</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                  </td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.14</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                  </td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.09</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Weighted
                      average shares outstanding</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">42,468,964</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">41,498,372</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Working
                      capital (deficit)</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                  </td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,818,269</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                  </td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(349,925</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Long
                      term liabilities</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                  </td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">_</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                  </td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">173,164</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stockholders
                      equity</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                  </td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,513,937</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                  </td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,068,923</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                      Assets</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                  </td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,704,728</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                  </td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,277,270</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                </tr>

            </table>
          </div>
          <div>&#160;</div>
        </div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">25</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="14" valign="bottom" width="54%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Quarter
                    Ended</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>September
                    30</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>December
                    31</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                    31</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>June
                    30</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenue</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">87,410</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;&#160;&#160;&#160;&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">107,408</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;&#160;&#160;&#160;&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,234</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;&#160;&#160;&#160;&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;&#160;&#160;&#160;&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">329,052</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gross
                    profit (loss)</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(606,083</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(472,506)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(107,544)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,186,143</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                    from operations</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,385,086</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,372,752</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,645,635</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(4,402,573</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                    loss</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,444,032</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,477,161</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,792,584</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(5,711,977</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Basic
                    and diluted loss per common share</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                  </div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.03</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                  </div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.04</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.06</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.14</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="14" valign="bottom" width="54%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Quarter
                    Ended</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2005</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>September
                    30</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>December
                    31</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                    31</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>June
                    30</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenue</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">66,156</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;&#160;&#160;&#160;&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">54,535</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;&#160;&#160;&#160;&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,002</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;&#160;&#160;&#160;&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">24,006</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;&#160;&#160;&#160;&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">172,699</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gross
                    profit (loss)</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(129,429</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(166,058</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(238,025</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(642,318</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,175,830</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                    from operations</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(965,774</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,251,722</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,064,726</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,617,683</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(4,899,905</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                    loss</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,019,675</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,476,195</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,084,191</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,636,064</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(5,216,125</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Basic
                    and diluted loss per common share</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.03</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.04</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.03</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.03</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.13</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="14" valign="bottom" width="54%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Quarter
                    Ended</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2004</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>September
                    30</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>December
                    31</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                    31</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>June
                    30</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenue</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">--</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;&#160;&#160;&#160;&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">24,027</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;&#160;&#160;&#160;&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">--</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;&#160;&#160;&#160;&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">14,317</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;&#160;&#160;&#160;&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">38,344</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gross
                    profit (loss)</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">--</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(25,687</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(42,522</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(100,647</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(168,856</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                    from operations</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(4,479,717</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(321,097</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,290,726</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,974,626</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,116,914</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                    loss</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(4,518,720</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(647,551</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,348,774</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,024,002</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,491,043</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Basic
                    and diluted loss per common share</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.17</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.02</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.04</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.00</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.13</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SUPPLEMENTARY
          FINANCIAL INFORMATION</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Supplemental
          Oil and Gas Information (Unaudited)</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Capitalized
          Costs</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Capitalized
          costs incurred in property acquisition, exploration, and development activities
          as of March 31, 2006 are as follows:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div align="left">
          <table cellpadding="0" cellspacing="0" id="ftable" width="50%">

              <tr>
                <td align="left" valign="bottom" width="35%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                    capitalized:</font></div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="35%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proved
                    properties</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">786,084</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="35%" style="border-bottom: white;">&#160;</td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="35%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unproved
                    properties</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,133,609</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="35%" style="border-bottom: white;">&#160;</td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="35%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Less
                    accumulated depletion</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(117,913</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="35%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                    capitalized costs</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,801,780</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">26</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Costs
          incurred in oil and gas producing activities for the&#160;nine months&#160;ended
          March 31, 2006 and 2005 are as follows:</font></div>
        <div align="left">
          <table cellpadding="0" cellspacing="0" id="ftable" width="50%">

              <tr>
                <td align="left" valign="bottom" width="21%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
                  <div>&#160;</div>
                </td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2005</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="21%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Property
                    acquisition costs</font></div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="21%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proved</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">69,259</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="21%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unproved</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,329</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="21%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exploration
                    costs</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">931,711</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="21%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Development
                    costs</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">607,175</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Results
          of operations for oil and gas producing activities for the nine months
          ended
          March 31, 2006 and 2005 are as follows:</font></div>
        <div align="left">
          <table cellpadding="0" cellspacing="0" id="ftable" width="50%">

              <tr>
                <td align="left" valign="bottom" width="21%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
                  <div>&#160;</div>
                </td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2005</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="21%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Oil
                    and gas sales</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">329,052</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,002</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="21%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Production
                    costs</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">488,788</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">36,211</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="21%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exploration
                    costs</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,101</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">43,640</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="21%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation,
                    depletion and amortization</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">231,000</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">80,602</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="21%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gain
                    on sale of oil and gas properties</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">361,193</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Capitalized
          costs incurred in property acquisition, exploration, and development activities
          as of June 30, 2005 (fiscal year end) are as follows:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div align="left">
          <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="50%">

              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="35%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                    capitalized - unproved properties</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,072,503</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="35%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Less
                    accumulated depletion</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="35%" style="border-bottom: #cceeff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                    capitalized costs</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,072,503</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="35%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Costs
          incurred in oil and gas producing activities for the years ended June 30,
          2005
          and 2004 are as follows:</font></div>
        <div align="left">
          <table cellpadding="0" cellspacing="0" id="ftable" width="50%">

              <tr>
                <td valign="bottom" width="21%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2005</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2004</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="21%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Property
                    acquisition costs</font></div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="21%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proved</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">69,259</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="21%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unproved</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,329</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="21%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exploration
                    costs</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">931,711</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="21%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Development
                    costs</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">607,175</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">27</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font size="2">Results
          of operations for oil and gas producing
          activities for the years ended June 30, 2005 and 2004 are as
          follows:</font></div>
        <div align="center">
          <table cellpadding="0" cellspacing="0" id="ftable" width="80%">

              <tr>
                <td valign="bottom" width="51%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2005</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2004</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="51%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Oil
                    and gas sales</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">52,008</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="51%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Production
                    costs</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">271,337</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="51%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exploration
                    costs</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="51%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation,
                    depletion and amortization</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="51%" style="border-bottom: #cceeff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gain
                    on sale of oil and gas properties</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="51%" style="border-bottom: white solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Results
                    of operations for oil and gas producing activities</font></div>
                </td>
                <td width="2%" style="border-bottom: white solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(219,329</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">28</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>NO
          OIL AND GAS RESERVE DATA</u></strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          do not
          have a report from an independent petroleum engineer. We have not made
          any
          internal estimates of proved developed and undeveloped reserves. The
          determination of oil and gas reserve quantities involves numerous estimates
          which are highly complex and interpretive. Such estimates are subject to
          continuing reevaluation. Reserve quantities may change as additional information
          becomes available. We expect to have a report from an independent petroleum
          engineer completed during the calendar year 2006. We did not sell any gas
          in
          fiscal 2005 or 2006. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><a name="a7"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>USE
          OF PROCEEDS</strong></font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          will
          pay for the cost of registering the shares of common stock in this offering.
          W</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">e
          will
          not receive proceeds from the sale of our shares by the Selling Stockholders.
          However, we may receive proceeds of up to </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$6,610,000
          </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">from
          the
          exercise of the warrants overlying some of the common stock only if Cornell
          utilizes the cash method exercise. We will use such proceeds for general
          corporate purposes and working capital in connection with our oil and gas
          operations. We will </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">use
          the
          proceeds of the debenture for general corporate purposes and working capital
          in
          connection with our oil and gas operations.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Examples
          of the Use of Proceeds:</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div align="left">
          <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr>
                <td align="left" valign="bottom" width="18%" style="border-bottom: medium none;">&#160;</td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="18%" style="border-bottom: medium none;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
                  </div>&#160; </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td colspan="5" valign="bottom" width="38%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Warrant
                    Proceeds (if any)(**)</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="19%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="18%" style="border-bottom: medium none;">&#160;</td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="18%" style="border-bottom: medium none;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: white; FONT-FAMILY: Times New Roman">______________________</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="18%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="18%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="19%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="18%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Source:</font></div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="18%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Debenture
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
                  <div>&#160;</div>
                </td>
                <td align="left" colspan="2" valign="bottom" width="18%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Minimum</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
                  <div>&#160;</div>
                </td>
                <td align="left" colspan="2" valign="bottom" width="18%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Maximum</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="19%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="18%" style="border-bottom: medium none;">&#160;</td>
                <td width="2%" style="border-bottom: medium none;">
                  <div>&#160;</div>
                </td>
                <td align="left" colspan="2" valign="bottom" width="18%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds
                    (*)</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
                  <div>&#160;</div>
                </td>
                <td align="left" colspan="2" valign="bottom" width="18%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
                  <div>&#160;</div>
                </td>
                <td align="left" colspan="2" valign="bottom" width="18%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
                  <div>&#160;</div>
                </td>
                <td align="left" colspan="2" valign="bottom" width="19%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Use</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="18%" style="border-bottom: medium none;">&#160;</td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="18%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="18%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="18%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="19%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="18%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Debenture
                    #1</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="5%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="13%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,800,000
                    (received)</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="17%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="17%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="18%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">General
                    corporate</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="18%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Debenture#2</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="5%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="13%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,820,000
                    (received)</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="17%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="17%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="18%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">purposes
                    and</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="18%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Debenture
                    #3</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="5%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="13%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,820,000
                    (expected)((***)</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="17%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="17%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="18%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">working
                    capital</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="18%" style="border-bottom: white;">&#160;</td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="13%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="17%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="17%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="18%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="18%" style="border-bottom: #cceeff;">&#160;</td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="5%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="13%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="17%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="17%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="18%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="18%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Warrant
                    #1</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="13%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="17%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="17%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,387,500</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="18%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">General
                    corporate</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="18%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Warrant
                    #2</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="5%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="13%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="17%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="17%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,502,500</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="18%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">purposes
                    and</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="18%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Warrant
                    #3</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="13%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="17%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="17%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,720,000</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="18%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">working
                    capital</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">____________________________</font></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(*)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                    of a 9% fee we pay to an affiliate of
                    Cornell.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(**)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">There
                    is no assurance than any warrants will be
                    exercised.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(***)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expected
                    upon effectiveness of the registration
                    statement.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><a name="a8"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DESCRIPTION
          OF BUSINESS</strong></font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Descriptors.</strong></font></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 45pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HDY</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Hyperdynamics
                    Corporation</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
                    is the company listed on the American Stock
                    Exchange.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 45pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYDR</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>HYD
                    Resources</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
                    is the name of a business segment of HDY that is composed of
                    our oil and
                    gas operations in Louisiana.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 45pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYD</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>HYD
                    Resources Corporation</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
                    owns drilling rigs, a workover rig and drilling equipment. HYD
                    is in our
                    HYDR business segment. We own HYD.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 45pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">TPC</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Trendsetter
                    Production Company</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
                    is an authorized oil and gas operator in Louisiana. TPC is in
                    our HYDR
                    business segment. We own TPC.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 45pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SCS</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>SCS
                    Corporation</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
                    is engaged in oil and gas exploration activities located&#160;offshore
                    Guinea, West Africa. We own SCS. SCS is also the name of a business
                    segment of HDY that is composed of our oil and gas exploration
                    activity in
                    Guinea.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 45pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SCSG</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;<u>SCS
                    Guinea SARL</u>&#8221; is a Guinea limited liability company located in Conakry,
                    Guinea. We own 65% of SCSG, which was formed to manage the business
                    associated with SCS's farmed out 2002 Oil and Gas Production
                    and Sharing
                    Agreement with the government of the Republic of
                    Guinea.</font></div>
                </td>
              </tr>

          </table>
        </div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">29</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Introduction.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hyperdynamics
          Corporation (&#8220;Hyperdynamics&#8221;) is a Delaware corporation. At inception we were a
          value added reseller of computer hardware and software. Our business plan
          was to
          develop into a complete service provider of integrated information technology
          services. During the fiscal year ended June 30, 2001, we began to offer
          our
          Integrated Technology Service Provider (ITSP) product, a bundled service
          offering for clients who wished to outsource their information technology
          department in addition to receiving Internet service. We discontinued this
          integrated service beginning in fiscal year 2002, about a year after acquiring
          our subsidiary, SCS Corporation (&#8220;SCS&#8221;). When we acquired SCS, we decided to
          implement a dramatic change in our business plan. SCS quickly became our
          only
          operating subsidiary. In the summer of 2001, months after the SCS acquisition,
          we began offering products and services targeted specifically to the oil
          and gas
          industry such as seismic data management services, customized geological
          workstations, and data transcription services. Additionally, SCS's management
          had years of experience which included both oil and gas exploration and
          the
          provision of seismic data management services to the oil and gas industry.
          In
          2002, SCS got the opportunity to become involved in an exploration project
          offshore of the Republic of Guinea, West Africa (&#8220;Guinea&#8221;). Additionally in
          2004, we began exploration and production activities in Louisiana, USA
          through
          our business segment HYD Resources (&#8220;HYDR&#8221;).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          2005,
          a misunderstanding arose in connection with our Guinea exploration project.
          We
          believe that the Guinea exploration project dispute will be resolved favorably
          and we have received a letter from the Guinea government to that effect.
          We
          believe that the Guinea exploration project misunderstanding will be resolved
          favorably.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          2004,
          we started a new subsidiary, HYD Resources Corporation (&#8220;HYD&#8221;) which owns
          drilling rigs, a workover rig and drilling equipment. We drill oil wells
          in
          proven areas within the United States. Thus far all of our drilling activity
          has
          occurred in Louisiana. Our primary goal for HYDR is to cost effectively
          generate
          domestic production revenues. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          continue to use our seismic data management or NuData (sm) services in
          house. In
          fiscal 2005, we copied all the vintage data of the Republic of Guinea from
          nine
          track data tapes to DVD. This software continues to meet our in-house data
          management requirements. Our seismic data management capabilities facilitate
          the
          further analysis and use of the data acquired pursuant to the needs of
          our
          exploration work programs.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Current
          Focus and Direction of Business Plan.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          current business focuses are offshore oil and gas exploration and exploitation
          in Guinea, and onshore production in Louisiana.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Production
          and Sharing Agreement for Exploration Territory Offshore The Republic of
          Guinea</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
          In
          early 2002, SCS management, in association with USOil Corporation of Houston,
          Texas (&#8220;USOil&#8221;) began to evaluate the viability of USOil's oil and gas
          concession off the coast of The Republic of Guinea, West Africa (&#8220;Guinea&#8221;).
          After SCS's review of older seismic data collected from that concession,
          we
          decided that the concession provided a good business opportunity. We negotiated
          an agreement with USOil to revitalize the then dormant 1995 Production
          and
          Sharing Agreement that USOil still had in effect with Guinea. We proposed
          to
          perform a regional seismic data acquisition across the concession using
          modern
          digital technology. USOil agreed to the proposal and the Government of
          Guinea
          was amenable to our proposal and issued permits. SCS proceeded in 2002
          to
          acquire one thousand kilometers of regional two dimensional (&#8220;2D&#8221;) seismic
          lines. In December 2002 USOil negotiated a new Production and Sharing Agreement
          (&#8220;2002 PSA&#8221;) with Guinea. USOil farmed out 100% of the rights and obligations of
          this agreement to SCS. The 2002 PSA gives rights for exploration and production
          across the concession of approximately sixteen million (16,000,000) acres.
          In
          November 2003, SCS acquired another four thousand kilometers of 2D seismic.
          We
          performed our exploration work in Africa under Guinea's Hydrocarbon Development
          Program, which was instituted by President Lansana Conte. During fiscal
          2004 we
          accomplished critical exploration work: a 4000 kilometer 2D seismic data
          shoot,
          the processing of the seismic data acquired, and the evaluation of that
          data and
          data that had been acquired in the past.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Until
          SCS
          began the exploration program, the geological information relating to offshore
          Guinea was scant. The first exploration activity in our concession area
          occurred
          in the 1970s. The technology available for data acquisition and processing
          at
          that time did not reveal geological information with great precision. The
          area
          was not considered as attractive as other areas which more clearly evidenced
          hydrocarbon systems using contemporaneous technology and which were easier
          to
          explore and develop. Accordingly, very little additional exploration work
          occurred on the concession until we began our work in 2002. The general
          economic
          environment has changed dramatically since the 1970s. Today, oil is more
          scarce
          and the price of oil is the highest it has ever been. Exploration and
          development is occurring in certain areas around the world that were previously
          not explored because the cost was perceived to exceed the potential benefits,
          and offshore Guinea had been viewed as an area such as this for many years
          based
          on old geological and geophysical data. We conducted our surveys using
          modern
          technology which more accurately depicts the geological character of the
          area.
          The geological work that we and our vendors have performed supports our
          plan to
          begin drilling exploration wells.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">30</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          regional 2D seismic acquired in 2002 included about 1,000 kilometers of
          new
          data, which we reevaluated during 2004. We used the information from this
          regional data shoot to design a more detailed 2D coverage of a 4,000 kilometer
          grid and we acquired the additional data. During 2004, we completed the
          processing and interpretation of this additional 4,000 kilometers of seismic
          data. This fulfilled our work obligation under the initial exploration
          phase of
          the 2002 PSA.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          interpretation and analysis of this data kept us in full compliance with
          our
          required work under the 2002 PSA and began our strategy to exceed minimum
          requirements in support of our commitment to a hydrocarbon discovery. We
          continued our analyses with new and better methods into 2005. This work
          is
          continually providing us with growing evidence in the form of documented
          direct
          hydrocarbon indicators.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          2004,
          after completion of the initial processing and reprocessing of our newly
          acquired 4,000 kilometers of digital 2D data, we were able to determine,
          through
          intense detailed analysis and mapping procedures, the existence of direct
          hydrocarbon indicators, including many noted gas seeps sourcing from the
          ocean
          floor in our coverage area. Based on this and the other geological and
          geophysical analysis, we contracted TDI-Brooks International (&#8220;TDI&#8221;) to perform
          an extensive geochemical analysis. In 2004 we obtained a permit from the
          government of Guinea and the geochemical work program began offshore Guinea
          in
          2004. A total of 57 core samples were acquired and delivered back to TDI's
          laboratory at College Station, Texas and an analysis was completed in August
          2004. The results of the coring program added additional evidence supporting
          our
          plan to drill our first exploration wells.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          addition to the geochemical analysis, we had originally planned to implement
          a
          three&#160;dimensional (&#8220;3D&#8221;) survey in early 2004. We decided to defer the 3D
          survey&#160;because we desired to first perform further analysis of our data in
          order to design a more efficient program which would concentrate our efforts
          on
          the most prospective areas in the concession. We contracted with internationally
          known Petroleum Geo-Services (&#8220;PGS&#8221;) to perform a third party detailed and
          comprehensive analysis and interpretation of all our seismic data which
          PGS
          began in July 2004, and PGS presented its preliminary report to us in August
          2004 revealing significant corroborating evidence of hydrocarbons, but
          most
          importantly it clearly expressed agreement with our view that there is
          a well
          defined working petroleum system across the concession in Guinea. PGS gave
          us
          their completed report in December 2004. This report supported our work,
          giving
          us additional corroborating evidence to go forward with drilling in Guinea.
          One
          of the main issues with regard to determining the next step was the
          corroborating evidence of the size of the drilling targets. This confirmed
          our
          belief that the next step should be drilling our first exploration wells
          as
          opposed to spending any more time and money on 3D seismic. Due to the size
          of
          the structures, we determined that we would gain much more by simply spending
          the money to drill. In January 2005, we began looking at ways to put together
          drilling operations. Additionally, we stepped up our&#160;communications and
          negotiations with potential oil company working interest partners
          and&#160;drilling companies, and we began work to contract drilling platforms to
          use to drill our exploration wells. We refined their work during the first
          half
          of 2005and we focused on four targets in shallow to medium depth water.
          We also
          developed a multi channel strategy to drill wells faster. The first channel
          is
          to partner with oil companies on a working interest basis. The second is
          to
          raise significant private funds and to contract directly with a drilling
          company
          and drilling platform vendors ourselves. The third strategy was to contract
          with
          turn key offshore drilling companies whereby we would direct the drilling
          operations of the contractor. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          made
          progress toward this goal and in June 2005, we sent a request for a drilling
          permit to Guinea, through USOil. The request was to obtain a permit to
          drill as
          many as four exploration wells offshore Guinea. In July 2005 we received
          a
          notice from USOil which alleged that the 2002 PSA had been canceled by
          the
          government of Guinea. We disagreed totally with that and filed suit against
          USOil in July 2005. We immediately began working diligently to clear up
          this
          misunderstanding with the Government of Guinea. In August 2005, we hired
          Mr.
          Famourou Kourouma as our new Vice President of Guinea Affairs (we do not
          consider this to be an executive officer position ). Famourou Kourouma
          was born
          and raised in Guinea. He began his work for us in Guinea in August 2005
          with the
          goal being to get us back into a position to begin our Guinea drilling
          program.
          Through Famourou Kourouma's many meetings and contacts with business and
          government officials, including two separate meetings with the Head of
          State,
          support for our issues was sincerely expressed by the government. In September
          2005, Kent Watts, our president, arrived in Guinea to meet with government
          officials who told Kent Watts that the government of Guinea had not terminated
          PSA. The Secretary General Son Excelence of Guinea, Mr. Fode Bangoura,
          told us
          that he was pleased to discuss our issues and that he was very encouraged
          and
          believed that we were the right company for the work. Fode Bangoura then
          said
          that he will begin by reviewing everything in detail and he would discuss
          the
          information with the minister committee and a proposal from the President
          will
          be submitted to the National Assembly for approval.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          December 2005, Famourou Kourouma reported that someone in Guinea may have
          misinformed the government about who was doing exploration work that we
          had
          actually performed. Famourou Kourouma reported that we have the support
          of
          Guinea ministers, politicians and President Lansana Conte to begin our
          drilling
          program. The Guinea government now understands the rights we have and the
          work
          we have done. We need to obtain a drilling permit form the government of
          Guinea.
          We can report that we have had conversations with Guinea government officials
          which appear to us to suggest that the government looks favorably on our
          desire
          to start drilling. We have received a letter encouraging dialog form the
          government of Guinea. However, we have not obtained a written drilling
          permit
          yet. The letter dated December 5, 2005 from the government of Guinea to
          us,
          states that the government is currently examining the Sharing and Production
          Agreement (the &#8220;PSA&#8221;) and royalties between the Republic of Guinea and SCS
          Corporation and considers it extremely important, and that the government
          of
          Guinea wishes to work as transparently as possible on this in the interest
          of
          both countries.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          September 2005, Mr. Kent Watts, CEO ,and Mr. Kourouma, VPGA, had a private
          meeting at the presidential palace in Conakry, Guinea with the Ministre
          Secretaire General De La Presidence De La Republique De Guinee, Son Excelence
          Mr. Fode Bangoura (referred to as the &#8220;MSG&#8221;). Our issues pertaining to being
          allowed to continue our work were discussed. First and foremost, the MSG
          emphatically denied that any termination letter had been generated or authorized
          by his office. This means that the termination letter forwarded to us by
          USOil
          and reported in our Form 8-K was a fake and not valid.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">31</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">After
          some additional interpretive dialogue, Mr. Watts and Mr. Kourouma asked
          the
          Secretary General, &#8220;what could we report as a summary outcome of our meeting
          together.&#8221;&#160;Mr. Kourouma reported to Mr. Watts the following substantive
          interpretation of the Secretary General's response.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;The
          Secretary General Son Excelence Mr. Fode Bangoura told us that he was pleased
          to
          discuss our issues with us and that he was very encouraged and believed
          that we
          were the right company for the work. He then said that he will begin by
          reviewing everything in detail. Then he will discuss the information with
          the
          minister committee and a proposal from the President will be submitted
          to the
          National Assembly for approval. Once the proposal is approved, the National
          Assembly will issue a legal approval (&#8220;projet de lois&#8221;). Then he said that he
          will inform us of the approval and at that time he will perform all steps
          necessary to allow us to continue our work.&#8221; </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Seismic
          Data Management Services.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          August
          2004, we entered into a contract with Texas Geophysical Company (&#8220;TGC&#8221;) relating
          to its data from Northern Alaska covering an offshore area of the Alaska
          National Wildlife Refuge (&#8220;ANWR&#8221;). Under this contract, SCS became the sales
          agent and seismic data management provider for TGC's ANWR data. TGC has
          the
          rights to the only 2D seismic data known to cover this area. Should oil
          companies license this data, SCS will perform the data processing and will
          earn
          associated service revenues and a percentage of the license fees.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Development
          of SCS NuData(TM) Management System.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          September 2002, we acquired the copyrights and all rights to the source
          code of
          the ONYX and ONYXII related conversion and transcription software. The
          software
          is instrumental in providing the technical capabilities to handle virtually
          any
          type of tape transcription and data conversion service. The ONYX software
          establishes a major competitive advantage for us as a primary component
          for our
          SCS NuData Management System. The ONYX software has been developed over
          the last
          five years and we are in the process of completing the latest version of
          the
          software to take full advantage of Microsoft's 32 bit Operating Systems
          such as
          Windows XP and future 64 bit operating systems. ONYX facilitates over 120
          different tape formats including such common formats like SEG A, B, C,
          or D,
          Western Code 4.2 and 1, Geocore 4, and Tempest. These formats are converted
          to
          the more standard SEG-Y format and then consolidated to DVD. Features of
          the
          NuData Management System in addition to the ONYX based conversion capabilities
          include:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
                    custom and unique tape tracking system tightly monitoring and
                    managing the
                    transcription process and database to organize and keep track
                    of all the
                    data associated with a particular line or area of seismic data.
                    Bundled
                    services to scan well logs, maps and other related information
                    to PDF
                    format and consolidate such related data on the same disk or
                    DVD as the
                    converted seismic data.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Strong
                    quality assurance procedures. Data sets are catalogued in the
                    NuData
                    database and then compared to client's database and reconciled
                    to NuData
                    database.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Once
                    consolidated on DVD, there are many different data management
                    and backup
                    solutions available, for example, online virtual private network
                    (VPN)
                    access established privately or high speed transmission from
                    Hyperdynamics
                    transcription facility to remote sites across high bandwidth
                    capacity
                    connection.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">While
                    we maintain the ability to service third party companies, the
                    primary
                    benefit of our NuData capability is to make our exploration activities
                    significantly more efficient.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">When
          coupled with our extensive industry experience, the NuData Management System
          allows us to consolidate our seismic data in ways that save substantial
          amounts
          in future data maintenance expenses. We can dramatically enhance our
          accessibility and utility of our seismic data, thereby enhancing our ability
          to
          find new oil and gas reserves faster and at a lower cost. In summary, the
          NuData
          Management System makes the data we manage more secure, accessible, manageable,
          and portable all while saving us significant time and money.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Domestic
          Oil Field Service and Production.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          April
          2004, we acquired our new subsidiary, HYD Resources Corporation. It is
          our
          second operating subsidiary with corporate offices located at our home
          office
          in&#160;Sugar Land, Texas&#160;and one field office located in La Salle Parish
          in Louisiana. HYD Resources Corporation had approximately $375,000 worth
          of
          assets, the bulk of which was oil field equipment. At the time of its
          acquisition, HYD Resources Corporation also had no prior history of operations.
          HYD Resources Corporation drills oil wells in proven areas within the United
          States. Thus far, all of our drilling activity is in Louisiana.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          January 2005, Hyperdynamics acquired an inactive company from the
          former&#160;owners of HYD Resources Corporation named Trendsetter Production
          Company (&#8220;TPC&#8221;). TPC is an authorized operator in the state of Louisiana. This
          immediately made us an oil and gas operator.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          evaluate the performance of these two companies (HYD Resources Corporation
          and
          Trendsetter Production Company) as a single business unit through our business
          segment named HYD Resources (&#8220;HYDR&#8221;).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">One
          of
          HYDR's activities is the acquisition and repair of oil field equipment.
          We can
          then use this equipment to drill for our own oil and gas production, establish
          production facilities, and maintain our producing wells. Because of our
          capabilities to drill and operate, we acquired the working interest on
          614 acres
          in Louisiana. We intend to continue to acquire oil leases in known producing
          areas and drill these leases to increase our own production revenues. We
          can
          acquire onshore producing leases with a very low risk and we can enhance
          the
          production of wells by working over existing wells. We typically sell a
          portion
          of the working interest in our onshore wells. </font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">32</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Since
          2005, we have drilled or reworked 16 oil wells on three separate leases.
          While
          drilling our first lease known as the J. W. Norris lease, it was determined
          that
          significant amounts of high pressure gas existed on the lease. As each
          well
          drilled continued to hit additional gas zones, the first twelve wells were
          left
          basically shut-in and it was determined that we would need to install a
          gas
          gathering system, contract with a pipeline transmission company and then
          execute
          a contract with a company to buy our gas. This process to establish a means
          to
          sell our gas began in June 2005 and we signed a contract with Tennessee
          Gas on
          September 2, 2005. We subsequently delivered our contract to sell our gas
          with
          British Petroleum in September 2005. This has enabled us to install a gas
          gathering system and metering equipment to begin selling our natural gas
          reserves. We have not yet sold commercial quantities of gas. We began drilling
          oil wells on the Kelly lease. The first well drilled, Kelly #1 began initially
          with flow rates of approximately 30 barrels per day in July 2005. This
          increased
          to approximately 70 barrels per day in early August and is expected to
          level out
          at around 50 barrels per day. We drilled Kelly # 2 which was completed
          at the
          end of August 2005. While drilling Kelly #1 and Kelly #2, we discovered
          new gas
          zones as well. Since the gas metering equipment for the Norris lease will
          actually be located on the Kelly lease, we believe that drilling additional
          gas
          wells to increase gas production will be much easier and faster once the
          gas
          system is completed. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
          the 12 months ended June 30, 2006, we sold approximately 15,450 barrels
          of oil
          (not adjusted to reflect the royalty interest or our fractional ownership
          of the
          working interest.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Employees
          and Independent Contractors.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          currently have </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">22
          </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">full
          time
          employees and </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">one
          </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">part
          time
          employee of which </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">13
          people
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">are
          a
          part of corporate overhead</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          and
          three </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">are
          directly associated with SCS and attributable to the exploration and seismic
          data management effort</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
          Seven
          people </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">are
          focused on </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">our
          d</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">omestic
          oil field production</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          of which
          one person is a manager and 6 people a</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">re
          hourly
          employees working on oil field workover, production, and shop work.&#160;
Additionally, we use independent contractors to minimize fixed overhead.
          No
          employees are represented by a union and we believe that our labor relations
          are
          good.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Alliance
          Partnerships, Key Vendors and Technical Certifications.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hyperdynamics
          maintains certifications with Microsoft as a Microsoft Solution Provider
          and
          Great Plains Software as an eEnterprise reseller. Our technical capabilities
          are
          focused on software development such as our new version of ONYX software
          that is
          the part of our NuData (sm) end-to-end seismic data services. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          oil
          industry vendors include the following:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Spectrum
          Geophysical Processing Company (&#8220;Spectrum&#8221;) provides us with professional data
          processing services. Spectrum is a member of a UK registered group of companies
          providing seismic data processing, nonexclusive surveys and electronic
          data
          management services to a wide range of international clients. Spectrum
          has its
          headquarters in Woking, England, with operational centers in Houston and
          Cairo.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Petroleum
          Geophysical Services (&#8220;PGS&#8221;) provides us with seismic acquisition and
          independent data interpretation services. PGS provides a broad range of
          seismic
          and reservoir services, including data acquisition, processing, interpretation,
          and field evaluation. PGS also owns and operates four floating production,
          storage and offloading units (FPSOs). PGS operates on a worldwide basis
          with
          headquarters in Oslo, Norway.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">TDI-Brooks
          International (&#8220;TDI&#8221;) provides us with geochemical core analysis of our
          concession. &#160;TDI is the recognized leader in offshore surface geochemical
          exploration and heat flow measurement.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Competition.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
          large
          number of companies and individuals engage in drilling for gas and oil,
          and
          there is competition for the most desirable prospects. We will encounter
          intense
          competition from other companies and other entities in the sale of our
          oil and
          gas. We could be competing with numerous gas and oil companies which may
          have
          financial resources significantly greater than ours. The quantities of
          oil and
          gas that we may produce and deliver may be affected by factors beyond our
          control, such as the inability of the wells to deliver at the&#160;necessary
          quality and pressure, premature exhaustion of reserves, changes in governmental
          regulations affecting allowable production and priority allocations, and
          price
          limitations imposed by Federal and state regulatory agencies.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Key
          Customers.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Oil
          production from our Louisiana properties is purchased by one customer,
          Plains&#160;Marketing LLC. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Research
          and Development.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          do not
          expend a material amount on research and development. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Cost
          of Compliance with Environmental Laws.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Because
          we are engaged in extracting natural resources, our business is subject
          to
          various Federal, state and local provisions regarding the environment.
          Compliance with&#160;environmental laws may necessitate significant capital
          outlays, affect our earnings potential, and&#160;cause material changes in our
          current and proposed business activities. At the present time, however,
          the
          environmental laws do not materially hinder nor adversely affect our business.
          Capital expenditures relating to environmental control facilities have
          not been
          material to our operations since our inception. In 2005, we did one oil
          well
          clean up. The cost of the clean up was less than $5,000. We have abided
          by and
          are in compliance with the&#160;environmental law. There were no clean ups in
          2006.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">33</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Recent
          Events.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          August
          2005, we hired Mr. Famourou Kourouma as our new Vice President of Guinea
          Affairs. His task is primarily to interface with the Guinea government.
          Famourou
          Kourouma will receive compensation from us in the amount of $2,000 per
          month and
          he may also receive between 200,000 and 400,000 options base upon our relations
          with the government of Guinea.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          October 2005, we established SCS Guinea SARL (SCSG&#8221;), a Guinea limited liability
          company located in Conakry, Guinea. We own 65% of SCSG, which was formed
          to
          manage the business associated with SCS's farmed out 2002 Oil and Gas Production
          and Sharing Agreement with the government of the Republic of Guinea. Mr.
          Baba
          Kourouma is the General Manager of SCSG. Baba Kourouma is the brother of
          Famourou Kourouma. Baba Kourouma is a citizen of Guinea who is an electrical
          engineer educated in Czechoslovakia. He has owned and managed a trucking
          business that dealt extensively with the government. He currently holds
          and
          manages the contract to manufacture the footwear for the Armed Forces of
          Guinea.
&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DESCRIPTION
          OF PROPERTY</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Description
          of Oil and Gas Properties--Foreign.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          are
          engaged in oil and&#160;gas operations.&#160;In West Africa, offshore Guinea, we
          are engaged in oil and gas geophysical exploration. We have not yet done
          any
          drilling off the coast of Guinea.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;[Graphic
          of Map of Offshore Guinea Oil and Gas Leases]</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          2002,
          SCS management, in association with USOil began to evaluate the&#160;viability
          of USOil's oil and gas concession off the coast of Guinea. After SCS's
          review of
          older seismic data collected from that concession, we decided that the
          concession provided a good business opportunity. Thus, we negotiated an
          agreement with USOil to revitalize the then&#160;dormant 1995 Production and
          Sharing Agreement that USOil still had in effect with Guinea. We proposed
          to
          perform a regional seismic data acquisition across the concession using
          modern
          digital technology. USOil agreed to the proposal and the Government of
          Guinea
          was amenable to our proposal and issued permits. SCS proceeded in 2002
          to
          acquire one thousand kilometers of regional two dimensional (&#8220;2D&#8221;) seismic
          lines. In 2002 USOil negotiated a new Production and Sharing Agreement
          (&#8220;2002
          PSA&#8221;) with Guinea. USOil farmed out 100% of the rights and obligations of this
          agreement to SCS. This 2002 PSA gives exclusive rights for exploration
          and
          production across the concession of 16 million acres.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          2003,
          SCS acquired another four thousand kilometers of 2D seismic. The 2003 seismic
          data was processed by Spectrum Energy Information and Technology. In 2004,
          we
          engaged Petroleum Geo Services to perform an independent evaluation of
          our
          seismic data. In we hired TDI Brooks to perform a seabed coring program
          and in
          November of 2004, we employed Infoterra to conduct a satellite seep study
          offshore Guinea. In January of 2005, we deployed PrimeView to further analyze
          our seismic data through a technique known as attribute analysis. The
          culmination of all of this effort and expense was evident when in 2005
          we sent a
          request for a drilling permit to Guinea, through USOil Corporation. The
          request
          was to obtain a permit to drill as many as 4 wells offshore Guinea.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          minimum remaining term of our Guinea farmout is described as follows:&#160;If a
          well is not drilled by December 2, 2005, then SCS Corporation will be granted
          an
          extension until December 2, 2006 to drill a well. If a well is not drilled
          by
          December 2, 2006, then SCS will relinquish our entire concession of 16
          million
          acres. If a well is drilled by December 2, 2006,&#160;then SCS will have until
          December 2, 2011 to drill additional wells and evaluate areas for exploitation.
          Once we determine an area to be capable of commercial production, SCS can
          secure
          it as an &#8220;Exploitation Area&#8221; of a simple geometrical shape of 50 km x 50 km with
          a payment of one million dollars to the Republic of Guinea. The Exploitation
          Area is held for 35 years for each well drilled in its boundaries. SCS
          can have
          multiple Exploitation Areas. After December 2, 2011, SCS will surrender
          all
          acreage to the Republic of Guinea with the exception of the Exploitation
          Areas.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          above
          would be the case if there had been no interruption to the work. However,
          a
          dispute arose when we asked Guinea for a drilling permit. If we take a
          legal
          position with respect to the dispute, regarding the timing of the work,
          part of
          our claim will include that we have been prevented from performing our
          work and
          thus the time to perform will need to be adjusted and extended accordingly
          once
          we are allowed to continue.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Description
          of Oil and Gas Properties--Domestic.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Beginning
          in 2004, in Louisiana (onshore), we started drilling for and produced oil.
          During that time we also started drilling for gas, sometimes in the
          sa</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">me
          borehole as was drilled for oil. As of June 26, 2006, we drilled in Louisiana
          an
          aggregate of 8 wells, and reworked 8 shut in wells that predate our acquisition
          of the leases. We finance our Louisiana drilling and production operations
          from
          internal resources and by selling some of the working interest in oil and
          gas
          leases to investors, while&#160;retaining a portion of the working interest for
          ourselves.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          domestic energy operations are conducted by our business segment HYD Resources
          (HYDR&#8221;). HYDR provides drilling, work over and construction services internally
          and to third parties. It also leases and operates oil properties. HYDR
          has
          approximately 698 acres of land under lease for oil and gas development.
          Of this
          total, leases held by production total approximately 258 acres . We have
          70%
          working interest on the Kelly and Norris leases, and a 100% working interest
          on
          the two </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Magee
          Smith </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">leases
          in
          La Salle Parish, Louisiana that are currently producing oil.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;[Graphic
          of Map of Louisiana Oil and Gas Leases]</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">34</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Reserves
          Reported To Other Agencies.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          did
          not report any estimates of total, proved net oil or gas reserves to any
          other
          Federal authority or agency.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Production.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          average sales price (including transfers) per unit of oil produced in fiscal
          2006 was $53.61 per barrel. We have not yet produced or sold any gas in
          commercial quantities. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Lifting
          Costs.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          average production cost (lifting cost) per barrel of oil produced in fiscal
          2006
          was $30.19 per barrel. We expect this cost to decrease as additional production
          is brought online. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Productive
          Crude Oil Wells and Natural Gas Wells.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          number of productive crude oil and natural gas wells in which we held an
          interest as&#160;of June 30, 2006 was as follows:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div>
          <div align="center">
            <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="60%">

                <tr>
                  <td align="left" valign="bottom" width="31%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
                  </td>
                  <td width="2%" style="border-bottom: black thin solid;">
                    <div>&#160;</div>
                  </td>
                  <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(1)
                      </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Gross</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                    <div>&#160;</div>
                  </td>
                  <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(2)
                      </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Net</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="bottom" width="31%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Crude
                      Oil Wells:</font></div>
                  </td>
                  <td width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="bottom" width="31%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="bottom" width="31%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">United
                      States</font></div>
                  </td>
                  <td width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="31%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Onshore</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">16</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12.4</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="31%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td width="2%" style="border-bottom: black thin solid;">&#160;&#160;
</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;&#160;
</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;
                      </font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;&#160;
</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;&#160;
</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;
                      </font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;&#160;
</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="31%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">International:</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="31%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="31%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Guinea</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="31%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Offshore</font></div>
                  </td>
                  <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="31%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">16</font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12.4</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                </tr>

            </table>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">___________________________________</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Productive
          wells are producing wells and wells capable of production. A gross&#160;well is
          a well in which a working interest is owned. The number of gross wells
          is the
          total number of wells in which a working interest is owned.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
          net
          well is deemed to exist when the sum of fractional ownership
          working&#160;interests in gross wells equals one. The number of net wells is the
          sum of the fractional working&#160;interests owned in gross wells expressed as
          whole numbers and fractions thereof. One or more completions in the same
          borehole are counted as one well in this table.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Acreage.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          developed and undeveloped acreage (including both leases and concessions)
          that
          we held as of June 30, 2006 are as follows:</font></div>
        <div>&#160;</div>
        <div align="left">
          <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr>
                <td align="left" valign="bottom" width="27%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="5" valign="bottom" width="34%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Developed
                    Acreage (1) (2)</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
                  <div>&#160;</div>
                </td>
                <td align="left" colspan="5" valign="bottom" width="34%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Undeveloped
                    Acreage (2) (3)</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="27%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Location</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="16%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Gross
                    Acres</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                  <div>&#160;</div>
                </td>
                <td align="left" colspan="2" valign="bottom" width="16%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Net
                    Acres</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                  <div>&#160;</div>
                </td>
                <td align="left" colspan="2" valign="bottom" width="16%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Gross
                    Acres</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                  <div>&#160;</div>
                </td>
                <td align="left" colspan="2" valign="bottom" width="16%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Net
                    Acres</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="27%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">United
                    States</font></div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="16%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="16%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="16%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="16%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="27%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Onshore</font></div>
                </td>
                <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="16%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="16%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="16%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="16%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="27%" style="border-bottom: medium none;">&#160;</td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="16%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="16%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="16%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="16%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="27%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Louisiana</font></div>
                </td>
                <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">258</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">178</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">440</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">365</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="27%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="27%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Foreign</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="27%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Offshore</font></div>
                </td>
                <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: #ffffff solid;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: #ffffff solid;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: #ffffff solid;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="27%" style="border-bottom: #cceeff;">&#160;</td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="27%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Guinea</font></div>
                </td>
                <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">16,000,000</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,120,000</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="27%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">258</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">178</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">16,000,440</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="15%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,120,365</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">35</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">_________________________________</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)
          </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Developed
          acreage is acreage spaced or assignable to productive wells.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
          gross
          acre is an acre in which a working interest is owned. A net acre is&#160;deemed
          to exist when the sum of fractional ownership working interests in gross
          acres
          equals one. The number of net acres is the sum of the fractional working
          interests owned in gross acres expressed as whole numbers and fractions
          thereof.
          Undeveloped acreage is considered to be those leased acres on which wells
          have
          not been drilled or completed to a point that would permit the production
          of
          commercial quantities of crude oil and natural gas regardless of whether
          or not
          such acreage contains proved reserves.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Included
          within undeveloped acreage are those leased acres (held by production&#160;under
          the terms of a lease) that are not within the spacing unit containing,
          or
          acreage assigned to, the productive well so holding such lease.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Net
          Exploratory and Development Wells.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          following table sets forth, as of June 30, 2006, the number of net exploratory
          and development wells we drilled thus far since 2005. An exploratory well
          is a
          well drilled to find and produce crude oil or natural gas in an unproved
          area,
          to find a new reservoir in a field previously found to be </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">productive
          of crude oil or natural gas in another reservoir, or to extend a known
          reservoir. A development well, for purposes of the following table is a
          well
          drilled within the proved area of a crude oil or natural gas reservoir
          to the
          depth of a stratigraphic horizon known to be productive. The number of
          wells
          drilled refers to the number of wells completed at any time during fiscal
          2006,
          regardless of when drilling was initiated. Completion refers to the installation
          of permanent equipment for the production of crude oil or natura</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">l
          gas, or
          in the case of a dry hole, to the reporting of abandonment to the appropriate
          agency.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div>
          <div>
            <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                <tr>
                  <td align="left" valign="bottom" width="27%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="11" valign="bottom" width="27%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Net
                      Exploratory Wells</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="11" valign="bottom" width="27%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Net
                      Development Wells</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="bottom" width="27%" style="border-bottom: #ffffff solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="left" colspan="5" valign="bottom" width="13%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Productive
                      (1)</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="left" colspan="5" valign="bottom" width="13%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Dry
                      (2)</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="left" colspan="5" valign="bottom" width="13%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Productive
                      (1)</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="left" colspan="5" valign="bottom" width="13%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Dry
                      (2)</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="bottom" width="27%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Year
                      Ended June 30, 2006</strong></font></div>
                  </td>
                  <td width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="6%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>US</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="6%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Int'l</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="6%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>US</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="6%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Int'l</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="6%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>US</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="6%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Int'l</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="6%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>US</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="6%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Int'l</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="bottom" width="27%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="right" colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="27%" style="border-bottom: #cceeff solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                  <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                </tr>

            </table>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">____________________________</font></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
                    productive well is an exploratory or development well that is
                    not a dry
                    hole.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
                    dry hole is an exploratory or development well determined to
                    be incapable
                    of producing either crude oil or natural gas in sufficient quantities
                    to
                    justify completion as an oil or gas
                    well.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Drilling
          In Progress</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
          June
          26, 2006, there was no drilling in progress. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Delivery
          Commitments--Offshore Guinea.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">When,
          if
          and as there is production in Guinea that falls under the terms of the
          2002 PSA,
          a 15% royalty will be paid to the Republic of Guinea and 3% will be paid
          to
          USOil subject to our litigation with them.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Delivery
          Commitments--Onshore Louisiana.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          have
          no domestic delivery commitments.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Description
          of Physical Facilities--Description of Operations Center in
          Louisiana.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          own .7
          acre of highway frontage land containing a metal building of approximately
          7,000
          square feet that we use for our oil and gas operations in Jena, Louisiana.
          In
          December 2005, we paid $52,330 for this property. The property is well
          located
          and well suited to facilitate the organization and mobilization of our
          oil and
          gas drilling and production in Louisiana.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Description
          of Physical Facilities--Description of Administrative Office
          Property.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          executive and administrative offices&#160;are located at&#160;One Sugar Creek
          Blvd., Suite 125, Sugar Land, Texas 77478 where we&#160;lease 6,752 square feet
          of space. The lease term is 65 months beginning on February 1, 2006 or
          our move
          in date. The space is presently being remodeled for us. We will get 5 months
          of
          free rent.&#160; We have prepaid 3 months of rent and given the landlord a
          $75,000 letter of credit for 18 months to secure the cost of the build-out.
          The
          letter of credit will be released after 18 months. The monthly rent is
          $10,972
          per month. As of June 26, 3006, the buildout has not been
          completed.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">36</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><a name="a10"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>LEGAL
          PROCEEDINGS</strong></font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Dixon
          Financial Services.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          2001,
          we were named as a defendant in a lawsuit styled Dixon Financial Services,
          Ltd.
          v. Fidelity Transfer Company, Erin Oil Exploration, Inc., Bill Knollenberg,
          Ron
          Bearden, R.F. Bearden Associates, Inc., James Chang, Nick H. Johnson, Riley
          L.
          Burnett, Jr., Johnson, Burnett &amp; Chang, L.L.P., Greenberg, Peden, Siegmyer
&amp; Oshman, P.C., George Siegmyer and Hyperdynamics Corporation; Cause No.
          2001-06263; In the 215th Judicial District Court of Harris County,
          Texas.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
          suit
          alleged breach of contract for failure to deliver share certificates in
          the name
          of Dixon Financial Services for 574,500 shares of our stock which were
          held in a
          nominee name. In 2000, The Erin Oil Exploration parties, including their
          attorneys, brought suit against us, wrongfully claiming that the shares
          were
          subject to their claims against other persons and obtained a temporary
          restraining order preventing the transfer of the shares. Fidelity Transfer,
          as
          our transfer agent, refused to transfer the shares to Dixon because of
          the
          restraining order. We set aside the temporary restraining order as to the
          shares
          and the shares were not subject to a later temporary injunction. However,
          legal
          counsel for the Erin Oil parties wrongfully asserted to Fidelity Transfer
          that
          the shares were subject to the injunction and Fidelity Transfer refused
          to
          transfer the shares to Dixon Financial for a period of at least three months
          during which the share price dropped from more than $6.00 a share to slightly
          more than $1.00 per share. We and Dixon Financial brought claims against
          the
          Erin Oil parties and their legal counsel for their wrongful conduct. The
          Erin
          Oil legal counsel&#160;asserted a litigation privilege under Texas law. The Erin
          Oil parties and their legal counsel filed motions for summary judgment
          asserting
          the litigation privilege as a bar to liability. The trial court granted
          all such
          motions for summary judgment.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fidelity
          Transfer asserted that it was not subject to jurisdiction in Texas and
          we
          determined that Fidelity Transfer was not currently solvent for purposes
          of any
          judgment against it in this matter. Fidelity Transfer is no longer a party
          to
          this lawsuit at this time, but we have a formal agreement allowing us to
          pursue
          recovery against Fidelity Transfer at a later time.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
          the
          end of April 2005, we and Dixon Financial entered into an agreement to
          settle
          and resolve this litigation. The agreement provides, among other things,
          that
          since the claims of both Dixon Financial and us against the Erin Oil parties
          and
          their legal counsel are similar, that we will bear the cost of appealing
          the
          summary judgments granted to the Erin Oil parties on the litigation privilege
          defense to liability. The agreement further provides that we agree to a
          judgment
          in the amount of $2,015,264 for the failure to deliver the shares into
          the name
          of Dixon Financial. However, Dixon Financial has agreed that it will not
          abstract or otherwise seek to enforce the agreed judgment, except in the
          event
          that the appeal is unsuccessful or the Erin Oil parties are determined
          not to be
          liable for any other reason. If the appeal is unsuccessful, we and Dixon
          Financial have agreed that we will pay the sum of $240,000 payable in the
          amount
          of $10,000 per month for a period of 24 months. This agreement is subject
          to
          court approval. We reasonably believe that our liability, if any, will
          not arise
          prior to January 2007. In the event that the appeal is successful, we will
          not
          be obligated to pay any amount of money other than legal fees and expenses.
          If
          the appeal is successful, we will seek to recover our damages and costs
          from the
          Erin Oil parties and their legal counsel. The Erin Oil parties' legal counsel
          has insurance which has been providing a defense and which may pay for
          any
          liability awarded against the Erin Oil parties' counsel.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          proposed agreed judgment described above was submitted to the court in
          May 2005.
&#160;As of June 23, 2006, the judge had not signed the agreed
          judgment.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Wellington,
          LLC.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
          April
          9, 2001, we were named as a defendant in a lawsuit styled Wellington, LLC
          vs.
          Hyperdynamics Corporation et al. Civil Action# 18811-NC, The Court of Chancery
          of Delaware.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Plaintiff claims that we did not carry out conversion of Series A preferred
          stock to common stock. On August 9, 2002 Plaintiff, Defendant, and their
          respective counsels executed an &#8220;Agreement for Transfer of Claims in Delaware
          Action to Georgia. Subsequently, the lawsuit was moved in its entirety
          to
          Atlanta, Georgia to be litigated under the lawsuit discussed below. Under
          the
          agreement, the Plaintiff in the Delaware action, Wellington, LLC. would
          become
          the Defendant in Atlanta. During the fiscal year ended June 30, 2004, the
          Court
          of Chancery of Delaware dismissed the Delaware case.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
          November 5, 2001, we filed a lawsuit styled Hyperdynamics Corporation,
          Plaintiff, v. J.P. Carey Securities, Inc., J.P. Carey Asset Management
          LLC,
          Joseph C. Canouse, John C. Canouse, James P. Canouse, Jeffrey Canouse,
          Southridge Capital Management LLC, Stephen Hicks a/k/a Steve Hicks, Thomson
          Kernaghan &amp; Co., Limited, Mark Valentine, Talya Davies, Cache Capital (USA),
          L.P., Carpe Diem, Carpe Diem LTD., Wellington, LLC, Minglewood Capital,
          LLC,
          Falcon Securities, LTD, Navigator Management LTD., David Sims, and Citco
          Trustees (Cayman) Limited, Defendants; and Wellington LLC,
          Counterclaim/Third-Party Plaintiff, v. Hyperdynamics Corporation, a Delaware
          corporation, Kent Watts, Michael Watts, Robert Hill, Harry J. Briers, DJX,
          Ltd.,
          a Belize corporation, and Does 1-10, Counterclaim/Third-Party Defendants,
          Civil
          Action File No. 2001CV44988, In The Superior Court of Fulton County, State
          of
          Georgia.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          filed
          our First Amended Complaint against Defendants on September 12, 2002 in
          which we
          presented thirteen counts for Causes of Action against defendants including
          &#8220;Violations of Georgia Racketeer Influenced and Corrupt Organizations&#8221; (RICO)
          Act (O.C.G.A. SS 16-14-1, ET SEO).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          believe that more than one of the Defendants worked together to create
          the
          appearance of providing initial long term financing ($3,000,000) and additional
          financing commitments (up to additional $5,000,000), all from reputable
          sources,
          while the Defendants' real plan was to manipulate our stock through
          contractually prohibited short selling and multiple breaches of the
          contractually agreed to selling covenants.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">37</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          are
          subject to counterclaims in this Georgia litigation. The counterclaimants
          allege
          that Hyperdynamics and its Officers and Directors breached their fiduciary
          duties to shareholders and committed other tortuous acts. We intend to
          continue
          to vigorously pursue damages and defend all counterclaims. Discovery is
          being
          primarily focused on jurisdictional issues at this time. During the litigation
          we have made numerous claims of discovery abuse resulting in certain defendants
          and defense attorney's involved being sanctioned by the court. They have
          filed
          for sanctions against us as well. The court dismissed all non-Georgia
          defendants. We have filed a notice of appeal of that ruling.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>USOil
          Corporation.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
          July
          29, 2005, our wholly owned subsidiary filed a lawsuit styled SCS Corporation,
          Plaintiff v. USOil Corporation, Defendant; Cause No. 2005-49205; in the
          333rd
          Judicial District Court of Harris County, Texas. We allege breach of contract,
          fraud, negligent misrepresentation, and we seek a declaratory judgment.
          </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          have
          added two defendants, DINESH SHUKLA and</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">JOSEPH
          R.
          DELAWA.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          We have
          also filed a Motion to Compel against US OIL that is currently pending
          requesting additional documents.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          We have
          also propounded discovery to Shukla.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Trendsetter
          Investors, LLC</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
          March
          8, 2006, a lawsuit was filed against us styled Trendsetter Investors, LLC,
          Plaintiff vs. Hyperdynamics Corporation, Trendsetter Production Co., Kent
          Watts,
          Michael Watts, Christopher Watts and Harry Briers, Defendants; Civil Action
          No.
          H 06-0746; in the United States District Court for the Southern District
          of
          Texas, Houston Division.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Plaintiff alleges Fraud or Deceit in the Sale of Securities, Common Law
          Fraud,
          Fraud by Omission and Control Person Liability. Plaintiff seeks unspecified
          monetary damages. We deny all their allegations and are vigorously defending
          ourselves. We have filed a motion to dismiss on behalf of all defendants.
          The
          case is currently stayed by the Court pending a ruling on these motions
          to
          dismiss. We believe this plaintiff's shareholders are one and the same
          as the
          members of a control group (the "Manning Group") led by Mr. Jack Manning.
          Manning is a Houston based attorney and has been a supporter of Hyperdynamics
          Corporation in the past. In private equity deals since April of 2003, he
          and his
          group have purchased common stock in the price range of $.15 to $.80 per
          share.
          We believe that the Manning Group through the circumstances surrounding
          the
          Trendsetter LLC working interest investment, has an agenda to unjustly
          enrich
          themselves through our securities. We are considering counter claims against
          Trendsetter LLC and each member of the Manning Group. We have significant
          concerns that they collectively have or have had over 10% of our common
          stock
          and they have been acting in concert, making them an undisclosed affiliate
          group.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Manning,
          Moore, Long</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
          May 5,
          2006 a lawsuit was served styled Jack Manning, Sue Manning, Stephen Moore
          and
          Geoffrey Long, Plaintiffs versus Hyperdynamics Corporation and Kent Watts,
          defendants. The suit was filed in the 189th District Court of Harris County,
          Texas with cause no. 2006-22135. The Plaintiff alleges they had the pre-emptive
          right to invest in Hyperdynamics Corporation's common stock. We deny all
          their
          allegations and will vigorously defend ourselves and are evaluating all
          possible
          counter claim actions. We believe this lawsuit is tied to the Trendsetter
          LLC
          litigation discussed above, and is a part of their groups' concerted attack
          on
          the company as a strategy to receive undue enrichment in the form of our
          common
          stock. We have exchanged the first round of written discovery and intend
          to
          conduct additional discovery, including depositions.&#160;&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Of
          far
          more importance to us is that this group may have been or is now acting
          together
          in concert since as far back as April 2003 when they funded a bridge loan
          and
          collectively invested and purchased 2,878,969 shares of common stock. At
          that
          time there was approximately 27,000,000 shares of common stock outstanding.
          This
          would have given them greater than 10% of the outstanding common stock
of the
          company. In review of our records, during the period of time between October
          of
          2003 through approximately the end of March of 2004, this group dramatically
          increased their holdings of Hyperdynamics Corporation's common stock. Based
          on
          concerted actions since then, we are seriously evaluating all corroborating
          information concerning the possibility that their group is an undisclosed
          affiliate of Hyperdynamics Corporation.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">38</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><a name="a11"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>MANAGEMENT&#8217;S
          DISCUSSION AND ANALYSIS</strong></font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CAUTIONARY
          STATEMENT ON FORWARD-LOOKING INFORMATION</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          are
          including the following cautionary statement to make applicable and take
          advantage of the safe harbor provision of the Private Securities Litigation
          Reform Act of 1995 for any forward-looking statements made by us, or on
          our
          behalf. This prospectus contains forward-looking statements. Forward-looking
          statements include statements concerning plans, objectives, goals, strategies,
          expectations, future events or performance and underlying assumptions and
          other
          statements, which are other than statements of historical facts. Certain
          statements contained herein are forward-looking statements and, accordingly,
          involve risks and uncertainties, which could cause actual results or outcomes
          to
          differ materially from those expressed in the forward-looking statements.
          Our
          expectations, beliefs and projections are expressed in good faith and we
          believe
          them to have a reasonable basis, including without limitations, our examination
          of historical operating trends, data contained in our records and other
          data
          available from third parties, but there can be no assurance that our
          expectations, beliefs or projections will result or be achieved or accomplished.
          In addition to other factors and matters discussed elsewhere herein, the
          following are important factors that, in our view, could cause actual results
          to
          differ materially from those discussed in the forward-looking statements:
          our
          ability to respond to changes in the information system environment,
          competition, the availability of financing, if available, on terms and
          conditions acceptable to us, and the availability of personnel in the future.
          We
          have no obligations to update or revise these forward-looking statements
          to
          reflect future events.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          fiscal year end is June 30.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Results
          of Operations --- Reportable segments.</u></strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hyperdynamics
          has two reportable segments:&#160;Our operations in Guinea and our Louisiana
          operations (&#8220;HYDR&#8221;). SCS is engaged in oil and gas exploration activities
          pertaining to offshore Guinea, West Africa. Additionally, it provides seismic
          data transcription and management services to support its activities and
          to
          external customers. The seismic data work is performed in the USA. HYDR
          is
          engaged in oil and gas exploration and production activities in Louisiana,
          USA.
          HYDR also provides some oilfield services to external customers. Hyperdynamics
          evaluates performance based on profit or loss from operations. The reportable
          segments are managed by separate management teams who are evaluated based
          on
          their segment's performance</font></div>
        <div>&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr>
                <td align="left" valign="bottom" width="32%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>By
                    Segment.</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="8" valign="bottom" width="32%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="8" valign="bottom" width="32%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="32%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" colspan="8" valign="bottom" width="32%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Year
                    ended June 30,</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" colspan="8" valign="bottom" width="32%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Year
                    ended June 30,</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="32%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2005</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2004</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>%
                    Change</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2004</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2003</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>%
                    Change</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="32%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues</font></div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="32%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SCS</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,140</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">18,314</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(83</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%)&#160;&#160;
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">18,314</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">450,831</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(96</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%)</font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="32%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYDR</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">169,259</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9,974</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">**
                    (2</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9,974</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">**(1</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="32%" style="border-bottom: #cceeff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Corporate</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">300</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,056</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(97</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,056</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,191</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(42</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%)</font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="32%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total
                    Revenues</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>$</strong></font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>172,699</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>$</strong></font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>38,344</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>350</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>%</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>$</strong></font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>38,344</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>$</strong></font></div>
                </td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>468,022</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>(92</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>%)</strong></font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Note:&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">**&#160;&#160;(1)
          There were no adequate results to compare in 2003 for HYDR.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">**
          (2)
          Data only reflects two months of operation in 2004 and is not
          comparable.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Based
          on
          the factors discussed for each segment below for the three months ended
          March
          31, 2006, our net loss chargeable to common shareholders for 2006 increased
          $1,708,643 or 154% to ($2,820,084) or ($.06) per basic and diluted loss
          per
          common share. This compares to ($1,111,441) or ($.03) per basic and diluted
          loss
          per common share for the three months ended March 31, 2005. The net loss
          chargeable to common shareholders includes a provision for preferred stock
          dividends of $27,500in 2006 compared to $27,250 in 2005.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
          the three months ended March 31, 2006, we realized increasing oil production
          revenues of $134,234 with $-0- service revenue compared to $28,002 oil
          production revenue and $-0- in service revenue for the three months ended
          March
          31, 2005. Revenues are not directly comparable as the focus of the company
          over
          the last year has shifted towards building production revenue and away
          from
          service revenue. The increase in net losses for March 31, 2006 is primarily
          attributed to an increase in cost of maintaining and repairing our production
          facilities in preparation for bringing newly anticipated oil and natural
          gas
          production online. Cost of revenues decreased to $241,249 for the three
          months
          ended March 31, 2006 compared to $266,027 for March the three months March
          31,
          2005. This $24,249 or 9% increase due to the billing of recoverable drilling
          costs to our working interest partners. General and administrative expenses
          were
          $1,018,039 and $804,577 for the three months ended March 31, 2006 and March
          31,
          2005, respectively. The increase of $213,462 is primarily due to the
          establishment of a reserve for uncollectible working interest billings
          in the
          amount of $201,784 during the quarter as a result of a lawsuit filed by
          one of
          our working interest holders.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">39</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          following tables summarize balance sheet and income statement data about
          Hyperdynamics' reportable segments and corporate overhead for the three
          months
          ended March 31, 2006 and 2005.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SCS&#160;</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>HYDR&#160;</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Corporate&#160;</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>As
                    of March 31, 2006:</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;Segment
                    assets</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,274,928</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,226,819</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">202,981</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,704,728</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Three
                    months ended March 31, 2006</strong></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Revenues
                    from external customers</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;Revenues
                    from external customers</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,234
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,234
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;Depreciation,
                    depletion and amortization</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,019
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">142,808
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,032
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">158,859
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;Loss
                    from operations</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(180,965</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(802,562</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(662,108</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,645,635</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;Expenditures
                    for long-lived assets</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,629
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">174,474
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,813
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">180,916
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>As
                    of March 31, 2005:</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;Segment
                    assets</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,074,834
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,480,284
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">722,152</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,277,270</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Three
                    months ended March 31, 2005</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;Revenues
                    from external customers</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,002</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,002</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;Depreciation,
                    depletion and amortization</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,243</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12,669</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,465</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">24,377</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;Loss
                    from operations</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(112,903</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(329,705</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(622,118</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,064,726</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;Expenditures
                    for long-lived assets</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">137,114
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">427,331
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">564,445
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div>
          <div align="left">
            <table cellpadding="0" cellspacing="0" id="ftable" width="70%">

                <tr>
                  <td valign="bottom" width="41%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Product
                      and services information</strong></font></div>
                  </td>
                  <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: #ffffff solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: #ffffff solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                </tr>
                <tr>
                  <td valign="bottom" width="41%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Quarter
                      Ended March 31,</strong></font></div>
                  </td>
                  <td width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="bottom" width="41%" style="border-bottom: medium none;">&#160;</td>
                  <td width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2005</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="41%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Revenues
                      from:</strong></font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>$</strong></font></div>
                  </td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>-</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>$</strong></font></div>
                  </td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>-</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="41%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Seismic
                      data management</font></div>
                  </td>
                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>-
                      </strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>-
                      </strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="41%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Computer-related
                      sales</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>-
                      </strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>-
                      </strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="41%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Oilfield
                      services</font></div>
                  </td>
                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>-
                      </strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-
                      </font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="41%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Oil
                      and gas production</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,234
                      </font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,002
                      </font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="41%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Totals</strong></font></div>
                  </td>
                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,234
                      </font></div>
                  </td>
                  <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,002
                      </font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>

            </table>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Results
          of Operations --- Louisiana Operations (&#8220;HYDR&#8221;)</u></strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Comparison
          for Fiscal Year 2005 and 2004</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Revenues</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
          &#160;Our prior year revenue reflects only two months of operation. Accordingly,
          we are not able to compare the results for this segment. Our revenues in
          2004
          were $9,974 compared to $169,259 in 2005, which includes $52,008 from oil
          production and $117,251 from oilfield service work for 2005. The oilfield
          service work was performed during the six months ended December 31, 2004.
          Since
          that time, our workover crew has been devoted to improving our oil and
          gas
          properties, and we expect them to continue to provide internal services.
          We
          expect to derive our future revenues primarily from oil production and
          not from
          the provision of oilfield services.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          2005,
          our cost of revenue comprised of approximately $80,000 of costs associated
          with
          oilfield service work, $271,337 associated with oil production revenues,
          and
          $859,608 of general field&#160;expenses. The breakdown for this expense is
          derived from the costs associated with startup costs, repairs and maintenance,
          tools and yard cost, equipment and service contracts of approximately $602,917,
          and $256,691 in operational salaries and contract labor.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">40</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Additionally,
          we incurred selling, general and administrative expenses of approximately
          $372,666 and&#160;$133,357 attributable to administrative payroll costs. Our
          other significant expenditures were professional fees, such as consulting,
          legal
          and accounting of&#160;$62,090, workman's compensation and insurance expenses of
          $76,668, bad debt expense of $34,368, office and administrative expenses
          of
          $66,182 and depreciation and amortization of $77,370. Our loss from operations
          for the year ended June 30, 2005 from this segment was ($1,508,093) and
          ($92,232) in 2004 which only reflects two months of operation for this
          segment.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Comparison
          for Fiscal Year 2004 and 2003</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Revenues</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
          &#160;Our revenues in 2004 were $9,974 and there are no 2003 results for HYDR
          to
          compare.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Selling,
          General and Administrative Expenses.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;There
          are no 2003 results for HYDR to compare for this segment.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Loss
          from Operations.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          There
          are no 2003 results for HYDR to compare for this segment.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Results
          of Operations --- Guinea And Seismic Data Management
          (&#8220;SCS&#8221;)</u></strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Comparison
          for Fiscal Year 2005 and 2004</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Revenues.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;We
          had revenues of $3,140 from this segment in 2005 and $18,314 in 2004,
          respectively. The lack of revenues is attributable to the decrease of internal
          seismic data processing work sine we have focused on the acquisition of
          seismic
          data for our concession in Guinea. Cost of revenues increased 19% from
          $58,432
          in 2004 to $69,480 in 2005.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          have
          processed a portion of some data that we have the right to market in order
          to
          provide samples of the data to our prospects. When we sell the right to
          use this
          data, we will receive a fee and we will also be compensated for processing
          the
          data that we sell.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Selling,
          General and Administrative Expenses.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;We
          had an increase of 23%, from $343,256 in 2004 to $423,558 for 2005 for
          selling,
          general and administrative expenses. The selling expenses increased 102%
          from
          $18,556 in 2004 to $37,522 in 2005 due to an addition of staff and 6801%
          increase in general and administrative expenses relating to the purchase
          of
          additional health insurance coverage for new employees from $349 in 2004
          to
          $24,083 in 2005. An increase of 175% on other taxes, particularly the Franchise
          Tax Board assessment, which was $5,000 higher than 2004. Utility use also
          rose
          31% from $35,926 in 2004 to $47,170 in 2005 due to a higher electric
          consumption. The office expenses increased 38% from $17,369 in 2004 to
          $24,051
          in 2005 due to more conference participation by personnel. Our travel expenses
          increased 40% from $48,406 in 2004 to $67,793 in 2005 due to multiple trips
          to
          London and Africa in connection with the Guinea concession.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          other
          significant expenditures include professional fees which reflect an increase
          of
          305% due to accounting costs related to the fairness opinion for a preferred
          stock paydown matter. Our depreciation and amortization increased 18% from
          $24,248 in 2004 to $28,499 for year ended 2005.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Loss
          from Operations</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
          Based
          on the factors discussed above, our loss from operations from this segment
          increased 30% from ($407,622) in 2004 to ($528,617) in 2005.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Comparison
          for Fiscal Year 2004 and 2003</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Revenues.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;Our
          revenues in 2004 and 2003, were $18,314 and $450,831, respectively. The
          change
          is primarily due to a decrease in internal seismic data processing work.
          We have
          focused on the acquisition of seismic data for our Guinea concession. Our
          cost
          of revenues decreased 636% from $371,666 in June 2003 to $58,432 in June
          2004.
          The decrease is primarily due to decline in high contribution margin
          transcription work and the necessity to maintain level of operational
          personnel.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Selling,
          General and Administrative Expenses.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          We had
          an increased of $20,698 in 2004, from $322,557 in 2003. The change is primarily
          due to the increase in travel expenses associated with our Guinea
          concession.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          experienced impairment losses of $350,000 on goodwill during 2003 and no
          impairment in 2004. Our depreciation and amortization increased 61% from
          $15,080
          in 2003 to $24,248 in 2004 due to the increased cost basis on our
          asset.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Interest
          Expense.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;Our
          interest expense increased $231,802 in 2004 from $0 in 2003, due to accretion
          of
          interest on the mandatorily redeemable preferred stock.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Loss
          form Operations</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
          Based
          on the factors discussed above, our loss from operations from this segment
          in
          2004 and 2003 is ($407,622) and ($609,821) respectively. This represents
          a
          decrease of $202,199.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Results
          of Operations --- Corporate Overhead</u></strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Comparison
          for Fiscal Year 2005 and 2004</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Revenues.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          We
          continue to receive occasional revenues from our prior value added reselling
          and
          computer consulting business. When this occurs, we classify the revenue
          to
          corporate overhead. This revenue was $300 for the year ended June 30, 2005
          and
          $10,056 for the year ended June 2004, thus a 97% decline in revenues for
          2005.
          We do not actively pursue revenues of this nature and they occur very
          irregularly.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          cost
          of revenues decreased from $81,356 in 2004 to $68,104 in 2005. We classify
          certain computer expenditures and our system engineer's payroll costs as
          cost of
          revenues attributable to corporate overhead. The 15% difference in cost
          of
          revenues is attributable to the cost of the computer equipment purchased
          and
          resold in June 2005. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Selling,
          General and Administrative Expenses.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Selling,
          general and administrative expenses increased by $392,750, from $2,410,441
          in
          2004 to $2,803,191 in 2005. This represents an increase of 16% and is due
          to
          equity-based compensation costs.&#160; </font>Equity-based compensation costs
          were approximately $300,000 higher in the year ended June 30, 2005 than
          in the
          comparable period of 2004. This year's expense related to equity-based
          compensation to four consultants of $1,833,086 derives from the vesting
          of
          800,000 warrants to purchase common stock at an exercise price of $0.50
          per
          share. During the year ended June 30, 2004, 2,000,000 warrants were granted
          to
          four consultants and 800,000 warrants vested during that year. Additionally,
          800,000 warrants vested during fiscal 2005. 200,000 warrants are scheduled
          to
          vest during fiscal 2006. We record the expense associated with these warrants
          using the fair value of the warrants as of the date they vest as estimated
          by
          the Black-Scholes option pricing model. Thus, provided that the agreements
          are
          not terminated (which would result in the forfeiture of the unvested warrants),
          we will incur expense related to these warrants each quarter for the next
          three
          quarters and the expense will vary based upon the market price of our common
          stock in each quarter. Equity-based compensation does not impact our liquidity
          or net worth because the consulting expense is offset by an increase to
          additional paid-in capital.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Additional
          factors affecting the increase of selling, general and administrative expenses
          is attributable to the purchase of added coverage for the Directors and
          Officers
          indemnity insurance, an increase of $99,865 from $14,962 in 2004. The insurance
          policy has been in force since April 2004. Our general office expenses
          increased
          from $49,319 in 2004 to $158,327 in 2005 due to American Stock Exchange
          listing
          fees of $65,000 and higher expenses for the annual shareholder meeting.
          Based on
          the factors discussed above, the&#160;loss from operations attributable to
          corporate overhead&#160;increased from&#160;($2,617,060)&#160;in 2004 to
          ($2,863,195) in 2005.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Other
          Items</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Interest
          Expense.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;Interest
          expense decreased from $474,463 in the year ended June 30, 2004 to $316,034
          in
          the year ended June 30, 2005. The interest expense during fiscal 2004 consisted
          of approximately $250,000 attributable to the Notes Payable, due December
          31,
          2007 and $230,000 of accretion on mandatorily redeemable preferred stock.
          These
          notes payable were converted during the year ended June 30, 2004. The interest
          expense during 2005 consisted of accretion of interest on mandatorily redeemable
          preferred stock and a loss on the retirement of the preferred
          stock.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">41</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Net
          Loss.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Based
          on the factors discussed for each segment, the Net Loss chargeable to common
          shareholders increased $1,666,748, or 45% from ($3,677,822), or( $.12)
          per share
          in 2004 to ($5,344,570), or ($.13) per share in 2005. The net loss chargeable
          to
          common shareholders includes a provision for preferred stock dividends
          of
          $186,779 in 2004 and $128,445 in 2005. The negative results are due to
          the
          factors discussed above.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Comparison
          for Fiscal Year 2004 and 2003</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Revenue.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;The
          revenue for 2004 and 2003 was $10,056 and $17,191, respectively. Our cost
          of
          revenues decreased by $16,135, from $97,491 in 2003 to $81,356 in
          2004.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Selling,
          General and Administrative Expenses.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Selling,
          general and administrative expenses increased by $1,262,423, from $1,532,565
          in
          2003 to $2,794,988 in 2004. This represents an increase of 82%. This occurred
          because effective </font>October 1, 2003, Hyperdynamics adopted the fail value
          recognition provisions of FASB statement 123, Accounting for Stock-Based
          Compensation. We adopted FASB Statement 123 using the retroactive restatement
          method as described in SFAS 148, Accounting for Stock-Based Compensation
          -
          Transition and Disclosure. In accordance with that statement, we have
          retroactively restated all periods presented so that stock option expense
          is
          reflected in accordance with SFAS 123. Consequently, amounts previously
          marked
          to market of $2,147,000 during the year ended June 2003, in accordance
          with APB
          25 and related interpretations, have been restated and these financial
          statements reflect instead the fair value of the employee options earned
          in that
          year $415,412.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          major
          factor involved in the change in Selling, General and Administrative Expenses
          was approximately $1,500,000 of consulting cost incurred in 2004 when 800,000
          warrants issued to consultants for Investor Relations/Public Relations
          services
          became vested. The cost of warrants issued to consultants in 2003 was $85,000.
          An additional 200,000 warrants vested at the end of each quarter&#160;through
          December 2005. At each vesting date, Hyperdynamics will estimate and record
          the
          fair value of the warrants that vest using the Black-Scholes option pricing
          model; thus this cost continued through December 2005. Our other expense
          associated with warrants issued to our Officers decreased $147,046 or 36%
          from
          $412,766 in 2003 to $265,720 in 2004. This occurred because warrants were
          forfeited when one of our Officers resigned during fiscal 2003. A one-time
          debt
          renegotiation cost of $100,000 is included in 2003 results and a gain on
          a
          settlement with a vendor of $92,066 is included in 2004 results. Our other
          consulting, legal and professional costs decreased $189,818 or 53%, from
          $357,220 in 2003 to $167,402 in 2004.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          addition to increased Selling, General and Administrative Expense, we
          experienced impairment losses of $704,061 on leasehold improvements during
          2003.
          There was no impairment in 2004. The cost basis of our asset decreased
          as of
          July 1, 2004 due to that impairment and our depreciation expense decreased
          significantly from $161,857 in 2003 to $17,663 in 2004.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Other
          Items.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Interest
          Expense.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;Interest
          expense increased 339% from $55,407 in 2003 to $474,463 in 2004. The increase
          was primarily due to Notes Payable due December 31, 2007, which were converted
          during the year ended June 30, 2004.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Net
          Loss.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;Based
          on the factors discussed for each segment, our net loss chargeable to common
          shareholders was ($3,677,822), or ($0.12) per share in 2004 and compared
          to
          ($2,645,316), or ($0.12) per share in 2003.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CRITICAL
          ACCOUNTING POLICIES</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Property
          and Equipment and Unproved Oil and Gas Properties:</u></strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          have
          capitalized $4,072,503 in oil and gas properties as of June 30, 2005. The
          $4,072,503 in oil and gas properties is subject to impairment review as
          of June
          30, 2005. The oil and gas properties were determined to be unimpaired because
          the Government of Guinea is currently working diligently to give us our
          permits
          and permission to continue our work. Additionally, we expect various strategies
          to raise funds, as discussed in the liquidity and capital resources section,
          to
          raise sufficient funds to satisfy our obligations with regard to the Guinea
          project.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Off-Balance
          Sheet Arrangements.</u></strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          have a
          contractual arrangement that has resulted in a lawsuit against USOil
          Corporation. The original agreements provide for us to pay USOil $1,600,000
          if
          SCS obtains third party financing for the Guinea development project. Also
          USOil
          will receive a 3% royalty if oil and gas is produced on this project and
          depending on the outcome of our legal claims against them. We also have
          a
          contingent $350,000 note payable that is only payable with 25% of the profits
          of
          SCS Corporation. We have the right to pay this note off using common stock.
          </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
          contingent payable will, if paid, increase the cost of the Unproved Oil
          and Gas
          properties at the time of payment. As such, it will increase the cost of
          sales
          over the oil and gas production period as part of the periodic amortization
          of
          the proved properties, or, if the development of the properties does not
          culminate in oil and gas production, the cost will be charged to expense
          as an
          impairment.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          conjunction with our purchase of HYD Resources Corporation, we entered
          into
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">three
          notes payable to two individuals totaling $856,000. The notes are to be
          </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">paid
          quarterly over the five years ended June 30, 2009. Payments will be due
          </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">only
          if
          HYD has net income. Payment amount will be 25% of the net income </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">for
          the
          period, unless there was a net loss in previous period(s). If there is
          a
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">net
          loss,
          subsequent net income must completely offset the losses before any </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">amounts
          are due. After the loss is offset, payment of 25% of the remaining net
          </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">income
          will be due. Upon the resignation of Sam Spears Jr. $350,000 of this
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">contingent
          amount was foregone by agreement.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">42</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Disclosure
          of Contractual Obligations as of June 23, 2006</u></strong></font></div>
        <div>&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="14" valign="bottom" width="54%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Payments
                    due by period ($)</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Contractual</strong></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Obligations</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Less
                    than 1 year</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>1-3
                    years</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>3-5
                    years</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>More
                    than 5 years</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Long-Term
                    Debt Obligations</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Capital
                    Lease Obligations</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operating
                    Lease Obligations</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purchase
                    Obligations</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                    Long-Term Liabilities </font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,000,000</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,100,000</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,900,000</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,000,000</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,100,000</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,900,000</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>FISCAL
          QUARTER ENDED MARCH 31, 2006</u></strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>By
          Segment.</strong></font></div>
        <div><br>
          <div>
            <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                <tr>
                  <td align="left" valign="bottom" width="32%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td width="2%" style="border-bottom: medium none;">
                    <div>&#160;</div>
                  </td>
                  <td align="left" colspan="8" valign="bottom" width="32%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Nine
                      months&#160;ended March 31,</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
                    <div>&#160;</div>
                  </td>
                  <td align="left" colspan="8" valign="bottom" width="32%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Nine
                      months&#160;ended March 31, </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="bottom" width="32%" style="border-bottom: medium none;">&#160;</td>
                  <td width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="bottom" width="32%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
                    <div>&#160;</div>
                  </td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2005</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
                    <div>&#160;</div>
                  </td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>%
                      Change</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
                    <div>&#160;</div>
                  </td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2005</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
                    <div>&#160;</div>
                  </td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2004</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
                    <div>&#160;</div>
                  </td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>%
                      Change</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="bottom" width="32%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td width="2%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="bottom" width="32%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues</font></div>
                  </td>
                  <td width="2%" style="border-bottom: medium none;">
                  </td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  <td align="left" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="32%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SCS</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,140</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(100</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%)&#160;&#160;&#160;&#160;&#160;&#160;</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,140</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">100</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="32%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYDR</font></div>
                  </td>
                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">329,052</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">145,253</font></div>
                    </div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">126</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">145,253</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">100</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
                  </td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="32%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Corporate</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">300</font></div>
                    </div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(100</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%)</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">300</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">100</font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="bottom" width="32%" style="border-bottom: white;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td width="2%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="bottom" width="32%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total
                      Revenues</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
                  </td>
                  <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>$</strong></font></div>
                  </td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>329,052</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>$</strong></font></div>
                  </td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>148,693</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>121</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>%</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>$</strong></font></div>
                  </td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>148,693</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>$</strong></font></div>
                  </td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>0</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>(100</strong></font></div>
                  </td>
                  <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>%)</strong></font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Geographical
          Information</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
          revenues are currently derived from domestic sources. All long-lived assets
          are
          located in the USA, except for our oil and gas exploration and exploitation
          rights, which are located offshore Guinea, West Africa.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
          breakdown of our operations by segments is as follows:</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">43</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
                <td width="2%" style="border-bottom: medium none;">
                  <div>&#160;</div>
                </td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SCS</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
                  <div>&#160;</div>
                </td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYDR</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
                  <div>&#160;</div>
                </td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Corporate</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
                  <div>&#160;</div>
                </td>
                <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
                    of March 31, 2006:</font></div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Segment
                    assets</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,274,928</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,226,819</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">202,981</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,704,728</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Nine
                    months ended March 31, 2006</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues
                    from external customers</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">329,052</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">329,052
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation,
                    depletion and amortization</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21,739
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">192,217</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,044</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">231,000
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                    from operations</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(517,094</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,997,523</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,887,956</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(4,402,573</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expenditures
                    for long-lived assets </font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">76,106</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">524,971</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,249</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">609,326
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Three
                    months ended March 31, 2006 </font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues
                    from external customers</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,234</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,234
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation,
                    depletion and amortization</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,019</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">142,808
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,032</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">158,859
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                    from operations</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(180,965</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(802,562</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(662,108</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,645,635</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expenditures
                    for long-lived assets</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,629
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">174,474
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,813
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">180,916
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">&#160;</td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
                    of March 31, 2005:</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Segment
                    assets </font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,074,834
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,480,284
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">722,152</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,277,270
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Nine
                    months ended March 31, 2005 </font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues
                    from external customers </font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,140</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">145,253
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">300</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">148,693
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation,
                    depletion and amortization</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21,270</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">45,643</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,689</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">80,602
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                    from operations </font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(430,418</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(752,018</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,099,787</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,282,223</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expenditures
                    for long-lived assets </font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">849,502</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">611,981</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,564</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,465,047
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Three
                    months ended March 31, 2005 </font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues
                    from external customers</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,002</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,002
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation,
                    depletion and amortization </font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,243
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12,669</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,465</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">24,377
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                    from operations </font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(112,903</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(329,705</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(622,118</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,064,726</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expenditures
                    for long-lived assets </font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">137,114</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">427,331</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">564,445
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Product
                    and services information</font></div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="5" valign="bottom" width="26%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Quarter
                    Ended March 31,</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="5" valign="bottom" width="25%" style="border-bottom: medium none;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Nine
                    Months Ended March 31, </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2005
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2005</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues
                    from:</font></div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Seismic
                    data management </font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,140</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Computer-related
                    </font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">300</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Oilfield
                    services </font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">117,251
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Oil
                    and gas production </font></div>
                </td>
                <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,234
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,002</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">329,052</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,002</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Totals</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,234</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,002</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">329,052</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">148,693</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Guinea
          and Seismic Data Management ("SCS")</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          had no
          revenues from this segment during the three months ended March 31, 2006
          and
          2005, respectively, and negligible revenues from this segment during the
          nine
          months ended March 31, 2006 and 2005, respectively. The lack of revenues
          is
          attributable to the amount of internal seismic data processing work performed
          during these periods as we focused our resources on the acquisition of
          seismic
          data for our concession in Guinea.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">44</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          have
          processed a portion of some data that we have the right to market in order
          to
          provide samples of the data to our prospects. When we sell the right to
          use this
          data, we will receive a fee and we will also be compensated for processing
          the
          data that we sell.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          depreciation and amortization was $8,019 and $7,243 for the three months
          ended
          March 31, 2006 and 2005, respectively; and $21,739 and $21,270 for the
          nine
          months ended March 31, 2006 and 2005, respectively. These amounts are comparable
          between the periods.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          loss
          from operations for this segment increased by $68,062, from ($112,903)
          for the
          three months ended March 31, 2005 to ($180,965)for the three months ended
          March
          31, 2006. Our loss from operations for this segment increased by $86,676
          from
          ($430,418) for the nine months ended March 31, 2005 to ($517,094)for the
          nine
          months ended March 31, 2006. The increased losses for both periods of time
          is
          due the increased costs associated with our efforts to secure our Guinea
          concession, as noted at the beginning of this section.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expenditures
          for long lived assets were $2,629 and $137,114 for the three months ended
          March
          31, 2006 and 2005, respectively. Expenditures for long lived assets were
          $76,106
          and $849,502 for the nine months ended March 31, 2006 and 2005, respectively.
          The decreases of $134,485 and $773,396 during the three and nine month
          periods
          noted is primarily due to reductions in geophysical and other related consulting
          services.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Louisiana
          Operations ("HYDR")</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenue
          for the three months ended March 31, 2006 and 2005 was $134,234 and $28,002,
          respectively. The increase of $106,232 is due to the increasing production
          trend
          noted above. We recorded oil and gas revenues of $329,052 and $145,253
          during
          the nine months ended March 31, 2006 and 2005, respectively. This increase
          of
          $183,799 is also due to the increasing production trend noted
          above.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation,
          depletion and amortization was $142,808 and $12,669 for the three months
          ended
          March 31, 2006 and 2005, respectively. The increase of $130,139 is due
          to the
          aforementioned production increases. Depreciation, depletion and amortization
          were $192,217 and $45,643 for the nine months ended March 31, 2006 and
          2005,
          respectively. The increase of $146,574 is due to the aforementioned production
          increases.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          loss
          from operations for this segment increased by $472,857, from ($329,705)
          for the
          three months ended March 31, 2005 to ($802,562)for the three months ended
          March
          31, 2006. Our loss from operations for this segment increased by $1,245,505
          from
          ($752,018) for the nine months ended March 31, 2005 to ($1,997,523)for
          the nine
          months ended March 31, 2005. The increased losses during the quarter are
          due
          primarily to the loss in the amount of ($361,193) incurred upon the buyback
          of
          working interests in our oil and gas properties during the period and increased
          costs associated with bringing our oil production on line. The increase
          in the
          loss for the nine month period is also due to these same factors.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          expenditures for long lived assets in this segment decreased by $252,857,
          from
          $427,331 during the three months ended March 31, 2005 to $174,474 during
          the
          three months ended March 31, 2006 due to the substantial completion of
          the
          capital improvements in our gas production and gathering systems. Our
          expenditures for long lived assets in this segment decreased by $87,010,
          from
          $611,981 during the nine months ended March 31, 2005 to $524,971 during
          the nine
          months ended March 31, 2006 due to the slow down in work on our gas production
          and gathering systems as they neared completion.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">45</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Corporate
          Overhead</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenue
          was zero for the three months ended March 31, 2006 and 2005, respectively.
          We
          recorded negligible revenues in this segment during the nine months ended
          March
          31, 2006 and 2005. We do not actively pursue revenues in this
          segment.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          loss
          from operations attributable to corporate overhead was ($662,108) and ($622,118)
          for the three months ended March 31, 2006 and 2005, respectively. The increase
          of $39,990 is due to increased shareholder meeting costs and the cost of
          registration statement preparation and filings. The loss from operations
          attributable to corporate overhead was ($1,887,956) and ($2,099,787) for
          the
          nine months ended March 31, 2006 and 2005, respectively. The decrease in
          the
          loss of $211,831 was due to 1) reduction in rent expense of approximately
          $128,000 as the result of the settlement of a dispute with our former landlord,
          2) a payroll tax refund of $46,000, and efforts to reduce overhead.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          expenditures for long lived assets were negligible during the three and
          nine
          months ended March 31, 2006 and 2005 respectively and consisted of office
          equipment.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYD
          Resources Corporation has made continuous progress towards increased production
          on the Norris/Kelly leases. As a result we have been able to steadily solve
          problems and have realized a stepped increase in oil production from
          approximately 620 barrels of monthly production for December 2005, to
          approximately 720 barrels for both January and February, 1,670 barrels
          for March
          2006 and 1,770 barrels in April 2006. Management remains optimistic that
          this
          trend can continue and we can soon maximize our oil production out of the
          current wells on these leases. At that point we plan to evaluate how to
          enhance
          this production further through additional work-over, as well as re-focusing
          on
          our potential natural gas production using the gas gathering system recently
          installed. Once we get to the point of determining the optimum production
          levels
          from our production facilities installed, we will then reevaluate our drilling
          programs going forward. As part of this, we anticipate the search and hiring
          of
          a professional drilling and production manager to continue our growth of
          production from low volume, low cost wells in proven zones.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          recorded oil and gas revenues of $134,234 and $28,002 during the three
          months
          ended March 31, 2006 and 2005, respectively. The increase of $106,232 is
          due to
          the increasing production trend noted above. We recorded oil and gas revenues
          of
          $329,052 and $148,693 during the nine months ended March 31, 2006 and 2005,
          respectively. This increase of $180,359 is also due to the increasing production
          trend noted above. Our seismic data management, computer-related sales,
          and
          oilfield service revenues declined from $3,140, $300, and $117,251,
          respectively, during the nine months ended March 31, 2005 to zero during
          the
          nine months ended March 31, 2006 due to our continued emphasis on expanding
          and
          increasing our oil and gas production. We did not recognize any revenues
          from
          these activities in the three months ended March 31, 2006 and 2005.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          cost
          of revenues were $241,778 and $266,027 for the three months ended March
          31, 2006
          and 2005, respectively, and $1,515,185 and $693,389 for the nine months
          ended
          March 31, 2006 and 2005, respectively. The decrease of $24,249 during the
          quarter is due to the billing of recoverable drilling costs to our working
          interest partners. The increase of $821,796 during the nine months period
          is due
          to an increase in the cost of maintaining and repairing our production
          facilities in preparation for bringing our oil and gas production
          online.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">46</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Selling,
          general and administrative expenses were $1,018,039 and $804,577 for the
          three
          months ended March 31, 2006 and March 31, 2005, respectively. The increase
          of
          $213,462 is primarily due to the establishment of a reserve for uncollectible
          working interest billings in the amount of $201,784 during the quarter
          as a
          result of a lawsuit filed by one of our working interest holders. Selling,
          general and administrative expenses were $2,624,047 and $2,639,766 during
          the
          nine months ended March 31, 2006 and 2005, respectively. The decrease of
          $15,719
          was primarily due to the following factors: 1) an increase in bad debt
          expense
          of $201,784, noted above, 2) reduction in rent expense of approximately
          $128,000
          as a result of the settlement of a dispute with our former landlord, 3)
          a
          payroll tax refund of $46,000, and 4) $45,000 due to increased shareholder
          meeting costs, travel to Guinea and the cost of registration statement
          preparation and filings.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          recorded a loss on the buyback of working interests of $361,193 during
          the three
          and nine months ended March 31, 2006 as a result of the repurchase of working
          interests in our Louisiana properties that were previously sold to investors
          in
          2005.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation
          and amortization was $158,859 and $24,377 for the three months ended March
          31,
          2006 and 2005, respectively. The increase of $134,482 was primarily due
          to
          depletion of $117,913 on wells that came on line in late 2005. Depreciation
          and
          amortization was $231,000 and $80,602 for the nine months ended March 31,
          2006
          and 2005, respectively. The increase of $150,398 is due to depletion on
          wells
          that came on line in late 2005.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
          expense was $1,148,944 and $23,144 for the three months ended March 31,
          2006 and
          2005, respectively. The increase of $1,290,692 was due to the expensing
          of
          previously unamortized debt discount related to our 2005 financings that
          were
          converted to common shares during the third quarter. Interest expense was
          $1,313,837 and $314,300 during the nine months ended March 31, 2006 and
          2005,
          respectively. The increase of $999,537 was due in large part to the expensing
          of
          the unamortized debt discount on the 2005 notes as they were repaid during
          the
          period.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Liquidity
          and Capital Resources</u></strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          ratio
          of current assets to current liabilities (current ratio) was .12 to 1 at
          March
          31, 2006 and .27 to 1 at March 31, 2005. A deeper analysis of the current
          ratio
          reveals several current obligations that reduce the current ratio but for
          which
          there is no requirement to use cash to satisfy them or for which the payment
          is
          deferred until we receive cash inflows sufficient to pay the obligation.
          These
          items include Deferred gain, Accounts payable Seismic Data, Dividends payable,
          and Dividends payable to related party. While the company continues to
          work
          toward generating positive cash flow from domestic operations altogether,
          including corporate overhead, it is expecting to report positive cash flow
          from
          its HYDR operations very soon.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          believe that are now prepared financially to begin an exploration well
          offshore
          Guinea. As discussed hereunder we expect our liquidity ratios to improve
          directly from our equity financing and with the success of putting our
          drilling
          operations back online in Guinea, we expect to have plenty of financial
          partnering opportunities that will allow us to far exceed minimum exploration
          and drilling requirements. This will allow us to drill more wells faster
          in
          quality locations. The more we drill in quality locations, the more chances
          we
          have to realize a viable commercial discovery for Guinea and for us. Once
          the
          March 17th protocol letter is fulfilled by the Government of Guinea, we
          will be
          able to implement our additional strategy to bring on working interest
          partners
          to share in the risk on some of our more expensive wells to be drilled
          sooner
          rather than later.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">C</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">urrently,
          in anticipation of receiving our permits to drill in Guinea, we are prepared
          and
          our financing is in place to drill at least one well offshore Guinea using
          fund
          from an equity line of credit and the recent Cornell financing. Partners
          that
          have contacted us with verbal indications of interest could provide the
          ability
          for us to drill many more wells and at a very fast pace.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">With
          our
          financing in place, management is highly confident in our ability to proceed
          and
          perform under either scenario of a new PSA or continuing under the 2002
          PSA.
          Also, under the old agreement, the second exploration period expires sometime
          during the later part of this decade depending on initial periods and extension
          provisions. Although we have several years to complete this work, we wish
          to
          initiate a drilling program as soon as possible. If all outstanding options
          and
          warrants were exercised, we would raise approximately
          $8,000,000.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">47</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          are
          considering all of our options or any combination of these options to:
          a)
          increase revenues from operations; b) raise additional capital to support
          at
          least the minimum required drilling program; c) negotiate one or more
          transactions with oil company partners who share in the required work and
          financing risk; and d) negotiate work program related deals with oil industry
          vendors such as seismic acquisition companies. We believe that our ability
          to
          manage and affect one or more of these options will determine our
          significant</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">current
          ratio and financial position in the future.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          cash
          from operations was a deficit in 2005. We have taken steps to reduce overhead
          and reduce non-operational costs. We continue to spend most of the capital
          we
          raise on enhancing the value of our offshore oil and gas concession. These
          expenditures, however, do not improve cash flow from operations. In order
          to
          improve our operating cash flow situation for future periods, we have started
          to
          build up our production revenues for HYDR in Louisiana. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          April
          2005, we sold a 35% working interest in two of our leases in Louisiana.
          Since
          this time, with the belief we could solve operational problems that we
          encountered and that we could gradually increase our production, we decided
          to
          offer a buy-back of the working interest from the non-operators that invested
          in
          these leases. In 2006 non-operators owning 5% of the working interest accepted
          our offer and we issued 197,416 shares of common stock to them in exchange
          for
          their working interest. No new working interest sales are planned at this
          time.
          We will continue to assess our progress with the oil production from our
          current
          leases and perhaps increase drilling activity in the near future. We believe
          that there is significant attainable production to go after on a profitable
          basis and will continue towards its goal of profitable operations from
          its
          domestic operations. We believe it has the financing in place to invest
          in
          necessary improvements, production facilities and new drilling programs
          to
          continue to build this domestic production.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          January 2006, we entered into a new lease for office space with a term
          of five
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">years.
          The new lease will become effective upon the completion of tenant </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">improvements
          specified in the lease agreement. As of now it appears this will be </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">sometime
          in August 2006. This lease will cost us $15,000 per month </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">less
          in
          rent and approximately $5,000 less in electricity than our previous lease
          at
          another location. Currently we are also in nearby temporary space that
          is being
          provided by our landlord at no cost to the Company while our new space
          is being
          readied for occupancy. Once the new lease begins, the base monthly rent
          is $0
          for months 1-6, and we have paid three months of rent in advance so once
          we move
          into the new space we will not be required to pay rent for nine months.
          We have
          put up a $75,000 Letter of Credit to secure our build-out costs. The letter
          of
          credit will be released back to us in 18 months.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
          June
          23, 2006, we closed a private financing transaction with</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          Cornell
          Capital Partners, LP</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
          The
          financing included a subscription for 3 convertible debentures in the aggregate
          amount of $6,000,000 of which we received the net amount of $1,800,000
          on June
          23, 2006. We received $1,820,000 in connection with the second debenture
          prior
          to filing the registration statement. We expect to receive another $1,820,000
          when this registration statement is ordered effective by the Commission.
          Since
          only the Commission can order a registration statement effective, we do
          not know
          for certain when or if the registration statement will become
          effective.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          have
          an equity line of credit. We have made 5 puts on the equity line of credit
          since
          February 2006 in the aggregate amount of $967,0.At June 23, 2006, the remaining
          amount available for us to draw down on the equity line of credit is
          $19,032,900. The equity line of credit expires in February 2009, after
          which we
          may no longer utilize the equity line of credit.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Although
          we plan to continue to improve on our current ratio, we have a contractual
          requirement during the second exploration period in the Guinea concession
          to
          invest an estimated $10,000,000 in drilling at least one exploratory well
          offshore Guinea. The second exploration period expires sometime during
          the later
          part of this decade depending on initial periods and extension provisions.
          Although we have several years to complete this work, we wish to initiate
          a
          drilling program as soon as possible. Thus, we are considering all of our
          options or any combination of these options to: (a) increase revenues from
          operations; (b) raise additional capital to support at least the minimum
          required drilling program; (c) negotiate one or more transactions with
          oil
          company partners who share in the required work and financing risk; and,
          (d)
          negotiate work program related deals with oil industry vendors such as
          seismic
          acquisition companies. We believe that our ability to manage and effect
          one or
          more of these options will determine our significant current ratio and
          financial
          position in the future.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Because
          SCS has significant work requirements to accomplish a 3D seismic acquisition
          program, processing, and analysis thereof, and to drill exploration wells,
          we
          are beginning to look at more than one option to raise additional funds.
          We are
          confident in our ability to raise additional capital under more conventional
          financing structures such as an underwritten secondary financing, but also
          believes we will be able to secure oil and gas working interest partners
          to fund
          and carry significant portions of the capital investment
          burden.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div id="GLFTR" style="WIDTH: 100%" align="left">
            </div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">48</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          have
          been successful in raising our necessary capital through private placements.
          Based on our relatively low overhead in comparison to the rather large
          task at
          hand, most of our capital going to improve our drilling prospects.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          expect
          to exploit our leases in Louisiana by operating numerous low volume wells
          that
          produce 20 barrels a day or less. We believe the relatively high price
          of oil
          will help make these wells more economically viable. Because</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;of
          the geological features of the Louisiana leases and our oil production
          to date,
          we consider this an attractive prospect for oil and gas investors. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
          a
          public company, the health of the market for our common stock is paramount
          to be
          able to raise capital. In May 2005, we began trading on the American Stock
          Exchange. We believe this will directly and indirectly help to strengthen
          and
          provide more stability to the price of our common stock and that financing
          options for us will expand as a result.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          are
          obligated on a contingent $350,000 note payable that is only payable with
          25% of
          the profits of SCS Corporation. We have the right to pay this note off
          using
          common stock.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          conjunction with our purchase of HYD, we entered into three notes payable
          to two
          individuals totaling $856,000. The notes are to be paid quarterly over
          the five
          years ending June 30, 2009. Payments will be due only if HYD has a net
          income
          according to accounting principles generally accepted in the United States
          of
          America. Payment amount will be 25% of the net income for the period, unless
          there was a net loss in previous period(s). If there is a net loss, subsequent
          net income must completely offset the losses before any amounts are due.
          After
          the loss is offset, payment of 25% of the remaining net income will be
          due.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          could
          obtain additional capital also upon the exercise of outstanding warrants
          and
          options for common stock. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      </div>
    </div>
    <div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">49</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
    </div>
    <div>
      <div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FINANCIAL
          STATEMENTS</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          financial statements begin on page F-1.</font><a name="a13"/></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>MARKET
          RISK</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          functional currency is the US dollar. Our revenue is directly related to
          the
          price of oil and gas. Assuming that we sell one barrel of oil, then a one
          dollar
          decrease in the price that we get for that barrel of oil will lower our
          revenue
          by one dollar, and correspondingly so for a one dollar increase in price.
          The
          same is true for changes in the price of natural gas. We intend to sell
          oil and
          gas immediately upon lifting to the wellhead. We do not contemplate retaining
          any oil and gas inventory. We do not hedge any market risk. Although the
          prices
          of oil and gas have recently increased substantially, there is no assurance
          that
          the price of oil and gas will not fall dramatically in the future.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><a name="a14"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>MARKET
          FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS</strong></font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Price
          Range of Common Stock.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          common stock is traded on the American Stock Exchange under the trading
          symbol
&#8220;&#8220;HDY&#8221;. The following table sets forth the quarterly high and low bid prices
          per
          share for the common stock, as reported by the OTCBB (our previous trading
          market) or the AMEX as the case may be. The bid prices reflect inter-dealer
          quotations, do not include retail markup, markdown, or commission and do
          not
          necessarily reflect actual transactions.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div align="center">
          <table cellpadding="0" cellspacing="0" id="ftable" width="70%">

              <tr>
                <td align="left" valign="bottom" width="41%" style="border-bottom: medium none;">&#160;</td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>High
                    Bid</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Low
                    Bid</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="41%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fiscal
                    2004</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="41%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="41%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">First
                    Quarter</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2.1400</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.7300</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="41%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Second
                    Quarter</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2.2500</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.4100</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="41%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Third
                    Quarter</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.7200</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.5100</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="41%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fourth
                    Quarter</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.0200</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2.2700</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="41%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="41%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fiscal
                    2005</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="41%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="41%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">First
                    Quarter</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2.7200</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.7600</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="41%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Second
                    Quarter</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.5000</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2.1700</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="41%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Third
                    Quarter</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.4000</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.7500</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="41%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fourth
                    Quarter</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.2000</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.9900</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="41%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="41%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fiscal
                    2006</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="41%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="41%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">First
                    Quarter</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2.57</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.8700</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="41%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Second
                    Quarter</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2.37</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.09
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="41%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Third
                    Quarter&#160;</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.42</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.68
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="41%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fourth
                    Quarter through June 23, 2006</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3.42</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2.09</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On&#160;June
          23, 2006, the last price for our common stock as reported by the AMEX was
          $2.21
          per share. On&#160;June 23, 2006, there were approximately 200 stockholders of
          record of the common stock. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          have
          not paid, and we do not currently intend to pay in the foreseeable future,
          cash
          dividends on our common stock. The current policy of our Board of Directors
          is
          to retain all earnings, if any, to provide funds for operation and expansion
          of
          our business. The declaration of dividends, if any, will be subject to
          the
          discretion of the Board of Directors, which may consider such factors as
          our
          results of operations, financial condition, capital needs and acquisition
          strategy, among others.</font><a name="a15"/></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DIRECTORS,
          EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Executive
          Officers and Directors.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          following table sets forth the names and positions of each of our Executive
          Officers and Directors.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div align="left">
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="top" width="20%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Name</strong></font></div>
                </td>
                <td align="left" valign="top" width="6%">&#160;</td>
                <td align="left" valign="top" width="66%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Position</strong></font></div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
                <td align="left" valign="top" width="4%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Age</strong></font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="20%">&#160;</td>
                <td align="left" valign="top" width="6%">&#160;</td>
                <td align="left" valign="top" width="66%">&#160;</td>
                <td align="left" valign="top" width="2%">&#160;</td>
                <td align="left" valign="top" width="4%">&#160;</td>
                <td align="left" valign="top" width="2%">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="20%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Kent
                    Watts</font></div>
                </td>
                <td align="left" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="66%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director,
                    Chief Executive Officer, Chairman and President</font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">47</font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="top" width="20%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="66%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="20%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Harry
                    J. Briers</font></div>
                </td>
                <td align="left" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="66%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director
                    and Executive Vice President</font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">42</font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="top" width="20%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="66%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="20%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Harold
                    A. Poling</font></div>
                </td>
                <td align="left" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="66%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director</font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">79</font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="top" width="20%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="66%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="20%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Albert
                    F. Young</font></div>
                </td>
                <td align="left" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="66%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director</font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">68</font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="top" width="20%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="66%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="20%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Steven
                    Plumb</font></div>
                </td>
                <td align="left" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="66%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
                    Financial Officer</font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">47</font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="top" width="20%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="66%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
                <td align="left" valign="top" width="4%">&#160;</td>
                <td align="left" valign="top" width="2%">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="20%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">L.
                    Gene Stohler&#160;</font></div>
                </td>
                <td align="left" valign="top" width="6%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="66%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director
                    </font></div>
                </td>
                <td align="left" valign="top" width="2%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">77</font></div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
              </tr>

          </table>
        </div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">50</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Directors
          are elected annually and hold office until the next annual meeting of our
          stockholders or until their successors are elected and qualified. We have
          no
          standing committees of the Board of Directors. Officers are elected annually
          and
          serve at the discretion of the Board of Directors. There is no family
          relationship between or among any of the Directors and our Executive Officers.
          Board vacancies are filled by a majority vote of the Board. We have determined
          that our Vice-President for Guinea Affairs, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Famourou
          Kourouma, is not an executive officer. We have a corporate Secretary who
          we have
          also determined is not an executive officer.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Kent
          Watts, age 47, became Chairman of the Board of Directors and was named
          our&#160;President&#160;Chief Executive Officer (CEO)&#160;on June 4, 1997. Mr.
          Watts has been a certified public accountant in Texas since 1985 and a
          licensed
          real estate broker since 1979. He received a Bachelor of Business Administration
          Degree from the University of Houston in 1983. Mr. Watts founded MicroData
          Systems, Inc., our former subsidiary, in 1988 and was MicroData's CEO until
          he
          became President and Chief Executive Officer of Hyperdynamics Corporation.
          He
          has extensive experience designing and working with integrated communications
          network systems and management information systems; additionally he designed
          our
          Integrated Technology Center.&#160;As our CEO and Chairman of the Board, he
          remains primarily responsible for managing our strategic direction and
          focus on
          the vertical oil and gas industry.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Harry
          James Briers, age 42, has been a Director since March 2, 2000. He began
          as our
          Director of Integrated Information Systems when he joined us in May 1998.
          He was
          elected as Vice President of Operations for Hyperdynamics Corporation in
          1999
          and named the Chief Operating Officer in 1999. He became our Executive
          Vice
          President in October 2002, which is the only position and title he now
          holds.
          From 1988 until May 1998, Mr. Briers owned and operated Perfect Solutions,
          a
          software consulting firm in Houston, Texas. He has extensive experience
          in the
          sale and implementation of mission critical software applications. Prior
          work
          experience included consulting for Ernst &amp; Young in its Entrepreneurial
          Services Group. Mr. Briers has a B.S. in Accounting and an MBA from the
          University of Houston-Clear Lake. As Executive Vice President he is responsible
          for managing the daily operations of the organization. He holds no other
          directorships.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">51</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mr.
          Harold A. Poling, age 79, was elected as our fourth Director on June 2,
          2004. He
          is a former Chairman of the Board and CEO of Ford Motor Co. After finishing
          his
          MBA in accounting, he took a job with Ford in 1951. Ford of Europe had
          record
          earnings during his tenure as head of that subsidiary. He moved to Ford's
          North
          American Operations prior to being named President and COO, then Vice-chairman
          and CEO of , and later Chairman and CEO of Ford Motor Co., the world's
          second
          largest auto maker. He served as a member of Ford's Board of Directors
          from May
          1979 until January 1994, and was elected Chairman in March 1990. He became
          a
          member of the Office of the Chief Executive of Ford in November 1984. He
          retired
          from Ford in January 1994. Currently, Mr. Poling serves as the Chairman
          of The
          PGA&#160;Tournament Players Club of Michigan and is also the chairman for
          Eclipse Aviation Corp. He is a Director of Flint Ink Corp., Monmouth, IL.
          College Senate, and William Beaumont Hospital where he is also a trustee.
          He is
          also a member of the Board of Trustees of Spring Arbor University. In the
          past,
          Mr. Poling served on the Boards of ArvinMeritor, Royal Dutch Shell, Kellogg,
          and
          is past Director of the Professional Golf Association's (PGA) Tour Policy
          Board.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Albert
          F.
          Young, age 68, was elected to the Board of Directors on October 18, 2004.
          He
          currently owns and operates Al Young Sales and Consulting. He retired from
          Venture Industries, where he had spent the preceding 14 years, in 2003.
          Currently, he continues to consult with Venture and is the Executive Assistant
          to its Chairman. During his tenure at Venture, Mr. Young was responsible
          for
          building his division's sales to approximately $500 million annually.
          Additionally, Mr. Young was instrumental in formulating and orchestrating
          several acquisitions and joint ventures including Venture's purchase of
          a Ford
          plastic plant, design center and two (2) tool shops in Melbourne, Australia.
          These acquisitions made Venture a supplier of automotive design projects.
          Additionally, Mr. Young helped Venture acquire Bailey Corporation and a
          third
          tool shop in Michigan and became a joint venture partner with Visteon in
          the
          purchase of Atlantic Automotive in Benton Harbor, Michigan. He holds no
          other
          public company directorships.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Steven
          Plumb, age 47, has been our CFO since November 2005. He is a CPA licensed
          to
          practice in Texas. Mr. Plumb is a financial manager and senior executive
          experienced in operations, finance and marketing. He has Big 4 CPA experience,
          a
          background in IT, biotech, Fortune 500 firms, medical and utility companies,
          distribution, real estate, construction, governmental entities, and non-profit
          organizations. During 1981-1982, Mr. Plumb was a staff accountant at
          PriceWaterhouseCoopers. During 1982-1984, Mr. Plumb was a staff accountant
          at
          Kalman Phillips &amp; Leon, P.C. During 1984-1987, Mr. Plumb was a supervising
          senior accountant at KPMG. During 1987-1990, Mr. Plumb was the controller
          of
          Memorial Hermann Rehabilitation Hospital. During 1990-1992, Mr. Plumb was
          the
          CFO of DePelchin Children's Center. During 1992-present, Mr. Plumb was
          the
          President of Steven M. Plumb, P.C. During 1997-2001, Mr. Plumb was the
          President
          of Orchard Consulting Group, Inc. During 2002-2004, Mr. Plumb was the CFO
          of
          ADVENTRX Pharmaceuticals, Inc. During 2003-present, Mr. Plumb was the President
          of Clear Financial Solutions, Inc. Mr. Plumb is also the CFO of Bluegate
          Corporation, a public company. Mr. Plumb is a member of: American Institute
          of
          Certified Public Accountants; Texas Society of Certified Public Accountants;
          Houston Chapter of Texas Society of Certified Public Accountants; Houston
          Technology Center; and Association for Corporate Growth. Mr. Plumb is active
          in
          BioHouston and the Rice Alliance. Mr. Plumb has a Bachelor of Business
          Administration degree from the University of Texas at Austin, Austin, Texas,
          1981. There is no family relationship between Mr. Plumb and any of our
          officers
          or directors. We have a one year contract with Clear Financial Solutions,
          Inc.,
          a company owned by Mr. Plumb, which has agreed to provide us with a so
          called
&#8220;contract&#8221; CFO,&#160;namely Mr. Plumb. We will pay a fee directly to Clear
          Financial Solutions, Inc. in the estimated amount of approximately $3,300
          to
          $4,950 per month for Mr. Plumb's services as our CFO and some additional
          services provided to us by Clear Financial Solutions, Inc.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">L.
          Gene
          Stohler, age 77, is a Director. One of Mr. Stohler's early activities in
          1959
          was supporting the inventor of the cruise control system for automobiles.
          Mr.
          Stohler provided marketing, sales and manufacturing support assistance
          to the
          inventor. In 1970, Mr. Stohler began working for Rockwell International
          as the
          General Manager of the Service Parts Group of Rockwell. In 1978, Mr. Stohler
          was
          promoted to Director of Marketing for Rockwell. In 1983, Mr. Stohler joined
          ITT
          Automotive. His activities at ITT Automotive included sales management
          for the
          Anti-Lock Brake System sales to the automotive industry. In 1989, Mr. Stohler
          joined Masco Corporation as the Vice President--Marketing and Planning
          for the
          Masco Tech Automotive Group which had $750 million in sales, including
          projects
          such as engineering and building the Ford Mustang Convertible from a basic
          chassis. Mr. Stohler retired from MascoTech in 2003 and joined Bankers
          Integration Group, a startup company at that time, as the VP--Business
          Development, reporting to the Chairman. Bankers Integration Group, Inc.
          is a
          technology and software development company that provides decision support
          tools
          and services to the automotive industry for the purpose of assisting automobile
          dealers and financial institutions with interpretation of credit data,
          and
          matching buyers with available loan programs. Mr. Stohler is a past member
          of
          the Board of Oakland University and a member of the Board of Breed Technologies
          which is a supplier of safety equipment to the automotive industry.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Information
          Concerning the Board of Directors and its Committees.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          have
          no compensation committee and no nominating committee. Decisions concerning
          nominees for Director and Executive Officer compensation for fiscal 2004
          were
          made by the full Board of Directors. The Board has not adopted formal policies
          with regard to the process to be used for identifying and evaluating nominees
          for Director and determining executive compensation. However, we are currently
          in the process of developing these policies and procedures. At this time,
          the
          consideration of candidates nominated by Directors and the </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">compensation
          of our Officers are in the Board's discretion. We believe this is adequate
          based
          on our size and each current Board member's qualifications.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          have
          an Audit Committee. The Audit Committee was created during October 2004.Mr.
          Poling and Mr. Young are the members of the Audit Committee. Both committee
          members are independent. Mr. Poling is the financial expert.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Board
          has not adopted formal policies with regard to shareholder communications
          with
          individual Board members. However, we are currently in the process of developing
          these policies and procedures.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Board
          of Directors held special meetings on four occasions during the fiscal
          year
          ended June 30, 2005. The Board of Directors also took action by written
          consent
          on 16 occasions during the fiscal year ended June 30, 2005, in which all
          present
          Directors took part.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Section
          16(a) Beneficial Ownership Reporting Compliance.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
          persons required to file We have reviewed the Forms 3, 4 and 5 submitted
          to us
          relating to fiscal 2005. We have found that Harry Briers, Harold Poling,
          Albert
          F. Young, DJX Ltd, and Kent Watts have filed all required Forms 3, 4 and
          5
          during fiscal 2005.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">52</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div>
        </div>
        <div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
            following table summarizes the results of our review.</font></div>
          <div>&#160;</div>
        </div>
        <div>
          <table cellpadding="0" cellspacing="0" width="100%">

              <tr>
                <td align="left" valign="bottom" width="19%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Name</strong></font></div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
                <td align="left" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Form
                    Type</strong></font></div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
                <td align="left" valign="bottom" width="22%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Number
                    of forms filed late</strong></font></div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
                <td align="left" valign="bottom" width="20%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Number
                    of transactions reported late</strong></font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="top" width="19%">&#160;</td>
                <td align="left" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="11%">&#160;</td>
                <td align="right" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="22%">&#160;</td>
                <td align="right" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="20%">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Harry
                    Briers</font></div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="11%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4</font></div>
                </td>
                <td align="right" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="22%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
                </td>
                <td align="right" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="20%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3</font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="top" width="19%">&#160;</td>
                <td align="left" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="11%">&#160;</td>
                <td align="right" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="22%">&#160;</td>
                <td align="right" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="20%">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">DJX
                    Ltd</font></div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="11%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4</font></div>
                </td>
                <td align="right" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="22%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
                </td>
                <td align="right" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="20%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Kent
                    Watts</font></div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="11%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4</font></div>
                </td>
                <td align="right" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="22%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="right" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="20%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Harold
                    Poling</font></div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="11%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4</font></div>
                </td>
                <td align="right" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="22%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="right" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="20%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="top" width="19%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Albert
                    F. Young</font></div>
                </td>
                <td align="left" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="11%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4</font></div>
                </td>
                <td align="right" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="22%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="right" valign="top" width="2%">&#160;</td>
                <td align="right" valign="top" width="20%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Code
          of Ethics.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          have
          adopted a Code of Ethics for our senior Executive Officers and Financial
          Officers, which was filed in our 10-KSB Amendment on May 16, 2005.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Board
          Committee Meetings.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Board
          of Directors held special meetings on four occasions during the fiscal
          year
          ended June 30, 2005. The Board of Directors also took action by written
          consent
          on 16 occasions during the fiscal year ended June 30, 2005, in which all
          present
          Directors took part. The Audit Committee has a written charter, which was
          included in our proxy statement filed on December 28, 2004. During the
          year
          ended June 30, 2005, the Audit Committee met five times and took action
          by
          Unanimous Consent one time</font><a name="a16"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EXECUTIVE
          COMPENSATION</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Summary
          Compensation Table</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          following table reflects all forms of compensation for the fiscal years
          ended
          June 30, 2003, 2004, and 2005 for services provided by our named Executive
          Officers.</font></div>
        <div>&#160;</div>
        <div align="left">
          <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr>
                <td valign="bottom" width="28%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="7%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="7%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td align="left" colspan="5" valign="bottom" width="16%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Annual
                    Compensation Awards</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td colspan="8" valign="bottom" width="25%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Long
                    Term Compensation Payouts</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="7%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
              </tr>
              <tr>
                <td valign="bottom" width="28%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Compensation</strong></font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Name
                    and Principal Position</strong></font></div>
                </td>
                <td width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Year</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Salary</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Bonus</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Other
                    Annual Compensation</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Restricted
                    Stock Awards</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Securities
                    Underlying</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>
                    Options SARS</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>LTIP
                    Payouts</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="7%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>All
                    Other Compensation</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="28%" style="border-bottom: medium none;">&#160;</td>
                <td width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="7%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="7%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="7%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="7%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="7%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="7%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="7%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" colspan="2" valign="bottom" width="7%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="28%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Kent
                      Watts</font></div>
                  </div>
                </td>
                <td width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2005</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">100,000</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;(1)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="28%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
                    Executive Officer</font></div>
                </td>
                <td width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2004</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">100,000</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">171,062</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;(3)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="28%" style="border-bottom: #cceeff;">&#160;</td>
                <td width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2003</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">100,000</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">147,314</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;(2)
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;
</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,100,000</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;(2)&#160;
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="28%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="28%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Harry
                      Briers</font></div>
                  </div>
                </td>
                <td width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2005</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">95,000</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="28%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
                      Vice President</font></div>
                  </div>
                </td>
                <td width="1%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2004</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">95,000</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">132,861</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;(3)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="28%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2003</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">87,100</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">147,314</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;(2)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,100,000</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;(2)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="6%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)
          On
          July 21, 1999, our Board of Directors unanimously agreed to the terms of
          an
&#8220;Executive Employment Agreement&#8221; for Kent Watts. The Agreement was duly executed
          on July 21, 1999 which establishes Mr. Watts as our President, Chief Executive
          Officer (CEO). The contract provides for a base salary of $100,000 annually
          with
          a performance based incentive salary based on 5% of adjusted net income,
          up to
          an additional $100,000 in salary. Therefore, maximum salary under the Agreement
          is $200,000 annually. This Agreement has been renewed on a year-by-year
          basis
          under the same terms.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)
          On
          August 26, 2002, the strike price of the warrants described in Note (2)
          was
          reduced to $0.23. The repricing of the warrants was valued as a new grant
          in
          fiscal 2003. This table reflects the $122,857 original fair value of the
          400,000
          warrants earned during 2003 and $24,457 fair value attributable to the
          repricing
          of 1,100,000 warrants for a total of $147,314.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)
          For
          the year ended June 30, 2004, an additional 400,000 warrants were earned.
          The
          original fair value of these warrants, $129,686, and $3,175 attributable
          to the
          repricing of these warrants is included in 2004 bonus income.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">53</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Option/SAR
          Grants.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          did
          not grant any options or SARS to any of our Directors or Officers during
          the
          year ended June 30, 2005.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div>
          <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td align="left" colspan="11" valign="bottom" width="53%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Aggregate
                    Options Exercised In Last Fiscal Year And Fiscal Year End Option
                    Values
                    (*)</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="43%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Name</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Shares
                    Acquired on Exercise</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Value
                    Realized</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Number
                    of Unexercised Securities Underlying Options at FYE
                    Exercisable/Unexercisable (*)</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Value
                    of Unexercised in the Money Options at FYE
                    Exercisable/Unexercisable</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Kent
                    Watts</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
                    Executive Officer</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;&#160;&#160;&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;&#160;&#160;&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">400,000/0</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;&#160;&#160;&#160;
</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,032,000/0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Harry
                    Briers</font></div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
                    Vice President</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">400,000/0</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,032,000/0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">________________________________</font></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 27pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(*)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">These
                    are all of the remaining warrants that were in the money at fiscal
                    year
                    end 2005. Mr. Watts and Mr. Briers each&#160;hold 400,000 warrants for
                    restricted common stock each that are vested but have not been
                    exercised.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Option/SAR
          Repricings.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">There
          were no option repricings during fiscal 2005.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Long-term
          Incentive Plan Awards.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">There
          were no long-term incentive plan awards to any of our Officers during the
          year
          ended June 30, 2005.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Director
          Compensation.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
          January 21, 2005 the Board of Directors approved compensation for Directors
          of
          $4,000 per quarter to be paid in the form of our common stock and $1,000
          per
          quarter for our Secretary. On January 21, 2005, compensation of $8,000
          each was
          paid to Kent Watts, Harold Poling,&#160;Harry Briers and $4,000 to Albert Young
          for Director services for the first two quarters of the fiscal&#160;year. The
          stock was issued at a price of $3.17 per share and thus 2,524 shares each
          were
          issued to Kent Watts, Harold Poling,&#160;and Harry Briers; 262 shares were
          issued to Albert Young. On May 9, 2005,&#160;the third quarter 2005 Director
          compensation of $4,000 was paid to each of the&#160;Directors by issuing 1,527
          shares of common stock based on the average closing bid price for the quarter
          of
          $2.62 per share. As of September 5, 2005, the fourth quarter Director's
          compensation accrued is $4,000 each for Kent Watts, Harold Poling, Harry
          Briers,
          and Albert Young. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">There
          was
          no other compensation granted by the Board for services rendered during
          the
          fiscal year ended 2005. There have been no Director meeting expense
          reimbursements for 2005 and 2004.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Employment
          contracts and termination of employment and change-in-control
          arrangements.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          have
          an employment contract with Kent Watts, CEO. The contract provides for
          a base
          salary of $100,000 annually with a performance based incentive salary based
          on
          5% of adjusted net income, up to an additional $100,000 in salary. The
          maximum
          salary under the contract is $200,000 annually. This contract has been
          renewed
          on a year-by-year basis under the same terms.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          have a
          one year contract (expiring in November 2006) with Clear Financial Solutions,
          Inc., a company owned by Mr. Plumb, which has agreed to provide us with
          a so
          called &#8220;contract&#8221; CFO,&#160;namely Mr. Plumb. We will pay a fee directly to
          Clear Financial Solutions, Inc. in the estimated amount of approximately
          $3,300
          to $4,950 per month for Mr. Plumb's services as our CFO and some additional
          services provided to us by Clear Financial Solutions, Inc.</font><a name="a17"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
          The CFO
          contract terminates in November 2006 unless otherwise extended.</font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          August
          2005, we hired Mr. Famourou Kourouma as our new Vice President of Guinea
          Affairs. Famourou Kourouma will receive compensation from us in the amount
          of
          $2,000 per month and he may also receive between 200,000 and 400,000 options
          based upon our relations with the government of Guinea.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECURITY
          OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Related
          Stockholder Matters.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Securities
          authorized for issuance under equity compensation plans as of </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>June
          30, 2005</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">54</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div align="left">
          <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr>
                <td align="left" valign="bottom" width="24%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td align="left" colspan="8" valign="bottom" width="73%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;&#160;&#160;&#160;&#160;</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="24%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                <td align="left" colspan="8" valign="bottom" width="73%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Equity
                    Compensation Plan Information</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="24%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="23%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Number
                    of Securities to be Issued Upon Exercise of Outstanding Options,
                    Warrants,
                    and Rights</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="23%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Weighted-Average
                    Exercise Price Price of Outstanding Options, Warrants and
                    Rights</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="23%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Number
                    of Securities Remaining Available for Future Issuance Under Equity
                    Compensation Plans (Excluding Securities Reflected in Column
                    (a))</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="24%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="23%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="23%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="23%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="24%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Plan
                    Category</font></div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td colspan="2" valign="bottom" width="23%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td colspan="2" valign="bottom" width="23%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td colspan="2" valign="bottom" width="23%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="24%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="23%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="23%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="23%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="24%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Equity
                    compensation plans approved by security holders</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="top" width="22%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="top" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="top" width="22%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">N/A</font></div>
                </td>
                <td align="left" valign="top" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="top" width="22%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,879,075</font></div>
                </td>
                <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="top" width="24%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="top" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="top" width="22%" style="border-bottom: white;">
                </td>
                <td align="left" valign="top" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="top" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="top" width="22%" style="border-bottom: white;">
                </td>
                <td align="left" valign="top" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="top" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="top" width="22%" style="border-bottom: white;">
                </td>
                <td align="left" valign="top" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="24%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Equity
                    compensation plans not approved by security holders</font></div>
                </td>
                <td valign="top" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="top" width="22%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,902,000</font></div>
                </td>
                <td align="left" valign="top" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="top" width="22%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.42</font></div>
                </td>
                <td align="left" valign="top" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="top" width="22%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="top" width="24%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td valign="top" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="top" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="top" width="22%" style="border-bottom: white;">
                </td>
                <td align="left" valign="top" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="top" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="top" width="22%" style="border-bottom: white;">
                </td>
                <td align="left" valign="top" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="top" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="top" width="22%" style="border-bottom: white;">
                </td>
                <td align="left" valign="top" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="top" width="24%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
                </td>
                <td valign="top" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="top" width="22%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,902,000</font></div>
                </td>
                <td align="left" valign="top" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="top" width="22%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.42</font></div>
                </td>
                <td align="left" valign="top" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="top" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="top" width="22%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,879,075</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Stock
          and Stock Option Plan (the &#8220;Plan&#8221;) of Hyperdynamics was adopted May 7, 1997 and
          amended on December 3, 2001. On June 30, 2004, we had 44,453 shares available
          to
          be issued or granted pursuant to the Plan. On January 21, 2005, the shareholders
          approved an increase in the Plan for an additional 4,880,000 shares to
          a total
          of 10,000,000 shares under the Plan. We issued 45,378 shares under the
          Plan this
          fiscal year, leaving us with 4,879,075 shares available to be issued or
          granted
          pursuant to the Plan as of June 30, 2005.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
          the
          Plan, options will vest over a five year or other negotiated period and
          will
          have a strike price set at the time of grant based on the then current
          market
          value of the stock. Our President has the authority as given by the Board
          of
          Directors to negotiate stock option agreements with corporate consultants
          as
          well.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          presently have warrants to purchase 2,902,000 shares of common stock which
          are
          currently outstanding and were issued pursuant to the Plan at a weighted
          average
          price of $0.42 per share.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          purpose of the Plan is to further our interest, and the interest of our
          subsidiaries and our stockholders by providing incentives in the form of
          stock
          or stock options to key employees, consultants and Directors who contribute
          materially to our success and profitability. We believe that our future
          success
          will depend in part on our continued ability to attract and retain highly
          qualified personnel as employees, independent consultants and&#160;attorneys.
          The issuance of stock and grants of options and warrants will recognize
          and
          reward outstanding individual performances and contributions and will give
          such
          persons a proprietary interest in us, thus enhancing their personal interest
          in
          our continued success and progress. We pay wages, salaries, and consulting
          rates
          that we believe are competitive. We use the Plan and individual compensation
          arrangements to augment our compensation packages. </font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">55</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TABLE
          OF SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          following table sets forth certain information at June 23, 2006, with respect
          to
          the beneficial ownership of shares of Common Stock by (1) each person known
          to
          us that owns beneficially more than 5% of the outstanding shares of Common
          Stock, (2) each of our Directors, (3) each of our Executive Officers, and
          (4)
          all of our Executive Officers, Directors as a group.</font></div>
        <div>&#160;</div>
        <div align="left">
          <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr>
                <td align="left" valign="bottom" width="69%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Name
                    and Address of Beneficial Owner</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="13%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 3.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Number
                    of Shares of Common Stock Beneficially Owned</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td colspan="2" valign="bottom" width="13%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 3.7pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Percent
                    of Class</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="69%">&#160;</td>
                <td width="2%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
                <td align="right" valign="bottom" width="12%">&#160;</td>
                <td align="left" valign="bottom" width="2%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
                <td align="right" valign="bottom" width="12%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="69%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Kent
                    Watts</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="69%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">One
                    Sugar Creek Boulevard. Suite 125</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="69%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sugar
                    Land, TX 77478</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,121,903</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;(1)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">35</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="69%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="69%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Harry
                    Briers</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="69%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">One
                    Sugar Creek Boulevard. Suite 125</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="69%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sugar
                    Land, TX 77478</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,929,418</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;(2)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
                </td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="69%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="69%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Harold
                    Poling</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="69%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fairlane
                    Plaza North</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="69%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">290
                    Town Center Drive, Suite 322</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="69%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dearborn,
                    Michigan 48126</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">474,753</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;(3)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="69%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="69%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Albert
                    F. Young</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="69%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2417
                    Fox Chase Blvd</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="69%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Troy,
                    Michigan 48098-5626</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">52,601</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.1</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="69%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="69%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">DJX
                    Ltd.</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="69%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4438
                    West 10th Avenue</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="69%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Vancouver,
                    BC V6R4R8</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">20,272,900</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;(4)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">30</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="69%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="69%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Steven
                    Plumb</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="69%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5300
                    N. Braeswood, #370&#160;</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="69%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Houston,
                    TX 77096-3317</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">100,000</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;(6)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.1</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="69%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="69%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">L.
                    Gene Stohler&#160;</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="69%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">One
                    Sugar Creek Boulevard. Suite 125</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="69%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sugar
                    Land, TX 77478</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5077</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;(5)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.1</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="69%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="69%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
                    Directors, Director Nominees&#160;and Executive Officers as a group (6
                    persons)</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">25,683,752</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">38</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">_______________________________</font></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
                    amount includes 2,449,003 shares of common stock; currently exercisable
                    warrants to purchase 400,000 shares at $0.23; 20,185,185 shares
                    deemed as
                    indirectly owned by Kent P. Watts based on his relationship with
                    DJX Ltd.,
                    whose shares he presently has the authority to vote and which
                    are one-half
                    owned by his minor children; and 87,715 common stock shares owned
                    by DJX
                    Ltd. and deemed owned by Kent P.
                    Watts.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">56</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
                    amount includes 1,529,418 shares of common stock and currently
                    exercisable
                    warrants to purchase 400,000 shares at
                    $0.23.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
                    amount includes 349,753 shares of common stock and currently
                    exercisable
                    warrants to purchase 125,000 shares at
                    $0.25.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(4)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
                    May 2001, we entered into a stock exchange agreement whereby
                    we acquires
                    SCS Corporation as our wholly owned subsidiary. We issued 2,725
                    shares of
                    Series B Preferred Stock to pay for the acquisition. Each share
                    of Series
                    B Preferred Stock carries a $1,000 per share face value and is
                    convertible
                    into common stock at the lesser of $0.135 per share or 50% of
                    the closing
                    bid price on conversion. On June 26, 2006 the closing price was
                    $2.13 per
                    share, and if all of the Series B Preferred Stock was converted
                    at the
                    lesser conversion price, $0.135 per share, we would issue to
                    DJX Ltd.
                    20,185,185 shares of common stock. DJX Ltd. is a foreign corporation
                    whose
                    shareholders are the grandchildren of Ernest M. Watts, the father
                    of Kent
                    P. Watts, our Chairman, CEO. Kent Watts currently exercises voting
                    rights
                    of DJX shares. DJX also owns 87,715 shares of Common Stock issued
                    in
                    payment of accrued dividends so the total attributed to DJX is
                    20,272,900
                    shares.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(5)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;No
                    warrants, options or preferred
                    stock.&#160;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(6)</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Includes
                    100,000 immediately exercisable
                    options.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          are
          not aware of any arrangements that could result in a change of
          control.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><a name="a18"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CERTAIN
          RELATIONSHIPS AND RELATED TRANSACTIONS</strong></font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>In
          connection with Michael E. Watts.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          November 2003, a Master Public Relations Consulting Agreement (the &#8220;Agreement&#8221;)
          was signed&#160;with Michael E. Watts, the brother of Kent Watts, our Chairman
          and CEO. The Agreement affirmed and established Michael Watts as the primary
          consultant with the responsibility to help manage public relations, general
          investor relations and shareholder communications. In the Agreement, Michael
          Watts was authorized and required to communicate publicly known information
          to
          shareholders and potential shareholders and to help in all reasonable ways
          to
          convey the history and story of Hyperdynamics with the goal to increase
          the
          interest of all investors in investing in Hyperdynamics publicly traded
          stock.
          The agreement additionally authorized Michael Watts to subcontract public
          relations services to other firms and consultants. It was contemplated
          that
          these subcontracts would include but not necessarily be limited to setting
          up
          public relations agents in different parts of the country. The total
          compensation for the Agreement and all underlying subcontracts is a total
          of
          2,000,000 warrants with a strike price of $0.50 per share of restricted
          common
          stock. During January and April 2004, Hyperdynamics granted an aggregate
          of
          1,200,000 of the warrants (of which 900,000 were vested as of June 30,
          2005)
          under the Agreement to a company whose president is Michael Watts. We granted
          800,000 warrants (of which 600,000 were vested as of June 30, 2005) under
          the
          Agreement to unrelated third parties. This compensation was designed to
          encourage the long term commitment to the market developing work being
          performed
          in the maintenance of our informed and orderly market. As such, it is believed
          that significant incentive is in place for all public relations consultants,
          agents, and subcontractors to continually work in communicating the
          Hyperdynamics story and opportunity. This agreement with Michael Watts
          may be
          canceled by us at any time by giving a 30 day written notice.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
          the year ended June 30, 2004, Michael Watts received payment of $699,951
          cash to
          pay for offering costs on private subscription agreements and exercised
          warrants. Additional offering costs will also be paid on 3,732,403 outstanding
          warrants purchased by private investors should they be exercised in the
          future.
          If all of these warrants are exercised, Mr. Watts would receive approximately
          $712,000 to pay these additional costs.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">57</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
          February 9, 2005, the Audit Committee of Hyperdynamics Corporation preapproved
          a
          contract (the &#8220;Contract&#8221;) with Geoserve Marketing, an assumed name for Michael
          E. Watts, the brother of our&#160;Chief Executive Officer. The Contract was
          executed by and between Trendsetter Production Company (our wholly owned
          subsidiary) and Geoserve Marketing. Under the Contract, Geoserve Marketing
          was
          to sell up to 49% of the working interest in certain oil and gas properties
          owned by Trendsetter. At $55,000 per point, this was to bring in proceeds
          of
          $2,695,000 once sold out. Geoserve Marketing was given the responsibilities
          to
          sell working interest in our oil and gas leases; obtain executed documents
          for
          such sales as required by us; help prepare the marketing materials for
          working
          interest sales; obtain investor nondisclosure agreements and other
          representations from all prospective nonoperators; obtain a check or wired
          funds
          from and signatures of nonoperators on all pertinent operating agreement
          forms;
          pay expenses for working interest promotion including but not limited to
          any
          brokerage fees and referral fees. Trendsetter agreed to pay 20% of the
          proceeds
          to Geoserve Marketing in return for these services. On June 30, 2005, the
          Audit
          Committee preapproved an extension of the working interest sales contract
          through July 30, 2005. As of June 30, 2005, 18.5% or $1,017,500 of a total
          of
          49% planned had been sold and Geoserve Marketing had been paid promotion
          fees of
          $203,500. &#160;On July 29, 2005 the Audit Committee preapproved that
          Trendsetter Production Company may extend the term of the contract with
          Geoserve
          Marketing until sales of working interests total $2,695,000 or we have
          determined that we are have positive cash flow or we otherwise reach a
          cash
          position net of current liabilities equal to at least $1,500,000 with projected
          cash surplus to last a minimum of one year based on current operations.
          As of
          September 26, 2005, 32.5% of the working interest has been sold for proceeds
          of
          $1,787,500 and a total of $357,500 has been paid to Geoserve
          Marketing.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
          May 9,
          2005, Harry James Briers, Executive Vice President, requested and obtained
          preapproval from the Audit Committee to rehire Mr. Jeremy Driver (son-in-law
          of
          Michael E. Watts, brother of the Chief Executive Officer), a past employee
          of
          Hyperdynamics Corporation, to work as General Manager for HYD. Mr. Driver
          had
          just been honorably discharged from the United States Air Force with the
          rank of
          Lieutenant. The Audit Committee approved the request and Mr. Driver was
          hired by
          Mr. Briers at an initial salary of $45,000 annually.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>In
          connection with HYD and Trendsetter Production Company.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          April
          2004, we purchased 100% of the stock of HYD for $375,000 to be paid in
          Hyperdynamics common stock in four quarterly installments between April
          2004 and
          January 2005. At the time of acquisition, HYD had no operations and consisted
          solely of assets donated to it by its initial shareholders. As of June
          30, 2005,
          the entire purchase price has been paid. The final purchase price allocation
          was:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div align="center">
          <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="60%">

              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="45%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Inventory</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">15,400</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="45%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Field
                    equipment</font></div>
                </td>
                <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">359,600</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="45%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                    assets</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">375,000</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="45%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Liabilities</font></div>
                </td>
                <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="45%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">375,000</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">58</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          initial employment agreements with the previous owners of HYD provided
          for
          bonuses in the form of three contingent notes payable, of up to $856,000
          that
          may be paid based upon HYD's net income over the next five years. The payments
          will be 25% of the net income for each quarter, if there is net income
          after
          offsetting any losses from previous quarters. As of June 30, 2005, HYD
          had a
          cumulative net loss of approximately $1,381,524. This amount would need
          to be
          earned as net income in current and future periods prior to having to pay
          the
          contingent note with 25% of net income in excess of the recovery
          amount.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
          conjunction with our purchase of HYD, we entered into two employment agreements
          with HYD's prior owners whereby we agreed to pay two employees $3,500 per
          month.
          Under the contracts, we may terminate the&#160;employment agreements for cause,
          or if HYD experiences a cumulative net loss any time after the first nine
          months
          of operation. Both employees have been terminated.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          previous owners of HYD had also previously owned Trendsetter Production
          Company
          (&#8220;TPC&#8221;). In January 2005, we acquired all of the equity of Trendsetter at a de
          minimis cost. We purchased TPC so that we could acquire and drill oil and
          gas
          leases under the name of TPC, which is a licensed oil and gas operator
          in the
          state of Louisiana. At the time of the purchase, Trendsetter owned one
          oil and
          gas lease, which it had acquired in September 2004 for nominal consideration,
          and it had no liabilities. This transaction involved entities under common
          control, and Trendsetter's asset was recorded at historical cost.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>In
          connection with Steven Plumb.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Steven
          Plumb is our CFO. Mr. Plumb&#160;became our CFO&#160;in November 2005. We have a
          one year contract with Clear Financial Solutions, Inc., a company owned
          by Mr.
          Plumb, which has agreed to provide us with a so called &#8220;contract&#8221;
CFO,&#160;namely Mr. Plumb. We will pay a fee directly to Clear Financial
          Solutions, Inc. in the estimated amount of approximately $3,300 to$ 4,950
          per
          month for Mr. Plumb's services as our CFO and some additional services
          provided
          to us by Clear Financial Solutions, Inc.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DESCRIPTION
          OF SECURITIES</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Common
          Stock.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          holders of shares of our common stock are entitled to one vote per share
          on each
          matter submitted to a vote of stockholders. If we are required to go into
          liquidation, holders of common stock are entitled to share ratably in the
          distribution of assets remaining after payment of liabilities and preferred
          stock. Holders of common stock have no cumulative voting rights. Holders
          of
          common stock have no preemptive rights. Holders of common stock are entitled
          to
          dividends as declared by the Board of Directors out of funds legally available.
          The outstanding common stock is validly issued and nonassessable. At&#160;June
          29, 2006, we have outstanding 46,308,573 shares of common stock.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Preferred
          Stock.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series
          A
          Convertible Preferred Stock was issued in January 2000 in the amount of
          1,945
          shares. The stated value is $1,000 per share and par value is $.001. It
          is
          convertible into&#160;Hyperdynamics' common stock at a price of the lower of the
          trading price when purchased at $5.25 or 80% of the then current 5 day
          trading
          average. All or any of the stock may be converted at any time at the holder's
          option, and all shares outstanding as of January 30, 2002 were to be
          automatically converted. This Series is nonvoting and pays dividends of
          4%,
          payable at conversion in either cash or shares of common stock, at
          Hyperdynamics' option. 1,055 shares were converted to common stock in 2000
          and
          2001. Hyperdynamics has not converted any of the Series A shares since
          fiscal
          2001 because of claims filed in November 2001 in our lawsuit with the Series
          A
          shareholders. Since the outcome is not known and no conversion has been
          effected, Hyperdynamics has continued to accrue the dividend through September
          30, 2004. We evaluated the accrual as of September 30, 2004 and consider
          the
          accrual at that date to be adequate to cover the liability, if any, pursuant
          to
          the lawsuit.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series
          B
          Convertible Preferred Stock was issued on May 31, 2001 in the amount of
          2,725
          shares of Series B Convertible Preferred Stock for the acquisition of SCS
          Corporation. The stated value is $1,000 per share and the par value is
          $.001.
          Each Series B share may vote 7,408 common shares for a total of 20,186,800
          votes. The shares are convertible to common stock at the lesser of $.135
          or 50%
          of the then current 5 day average trading price. Series B stockholders
          are
          entitled to a 4% cumulative dividend on the stated value, which is payable
          only
          upon conversion of the Series B Convertible Preferred Stock. Dividends
          may be
          paid in stock or cash at&#160;our option.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Cornell
            Warrants</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
            granted Cornell 3 warrants to purchase up to 2,1000,000 shares of common
            stock.
            The Cornell warrants expire in June 2011 and are in </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">three
            tranches consisting of:</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 36pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(A)</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">one
                      warrant to purchase 955,000 shares of common stock&#160;at an exercise
                      price of $2.50 per share</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 36pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(B)</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">one
                      warrant to purchase 715,000 shares of common stock&#160;at an exercise
                      price of $3.50 per share</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 36pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(C)</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">one
                      warrant to purchase 430,000 shares of common stock&#160;at an exercise
                      price of $4.00 per share</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Other
            Options and Warrants.</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
            June
            23, 2006, we have outstanding an aggregate of 6,088,778 other&#160;warrants that
            were issued for investors, employees and consultant compensation.</font><a name="a20"/></div><br>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">59</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div><a name="a20"/></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SELLING
          STOCKHOLDERS</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          following table sets forth the name of each Selling Stockholder, the number
          of
          shares of common stock offered by each Selling Stockholder, the number
          of shares
          of common stock to be owned by each Selling Stockholder if all shares were
          to be
          sold in this offering and the&#160;percentage of our common stock that will be
          owned by each Selling Stockholder if all shares are sold in this offering.
          The
          shares of common stock being offered hereby are being registered to permit
          public secondary trading and the Selling Stockholders may offer all, none
          or a
          portion of the shares for resale from time to time.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div align="left">
          <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr>
                <td align="left" valign="bottom" width="39%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Name
                    of Selling Stockholder</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="13%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Shares
                    Owned Before Offering</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="13%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Shares
                    Offered For Sale</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="13%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Shares
                    Owned After If All Offered Shares Are Sold</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" colspan="2" valign="bottom" width="13%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Percentage
                    Owned After Offering If All Offered Shares Are
                    Sold</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="39%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(1)</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>(2)</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2B)</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>(3)</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>(3)</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
                </td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="39%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2,310,796
                    (2A)</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="39%">&#160;</td>
                <td width="2%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
                <td align="right" valign="bottom" width="12%">&#160;</td>
                <td align="left" valign="bottom" width="2%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
                <td align="right" valign="bottom" width="12%">&#160;</td>
                <td align="left" valign="bottom" width="2%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
                <td align="right" valign="bottom" width="12%">&#160;</td>
                <td align="left" valign="bottom" width="2%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
                <td align="right" valign="bottom" width="12%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="39%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cornell
                    Capital Partners, LP</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(4)</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,100,000</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                </td>
                <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-%</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">&#160;</div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font size="2">_______________________________</font><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 36pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                      the best of our knowledge, no Selling Stockholder has a short
                      position in
                      our common stock. To the best of our knowledge, no Selling
                      Stockholder
                      that is a beneficial owner of any of these shares is a broker-dealer
                      or an
                      affiliate of a broker-dealer (a broker-dealer may be a record
                      holder). No
                      Selling Stockholder has held any position or office, or has
                      had any
                      material relationship with us or any of our affiliates within
                      the past
                      three years. Cornell has entered into a agreements to provide
                      us with
                      financing.</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 36pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cornell&#8217;s
                      beneficial ownership of our common stock is contractually capped
                      at 4.99%
                      of the shares outstanding at any particular time. Cornell cannot
                      convert
                      the debentures nor exercise the warrants so as to exceed the
                      4.99% common
                      stock beneficial ownership contractual limit.
</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 36pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2A)</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Represents
                      4.99% of our outstanding common stock as of the filing date
                      of the
                      registration statement.</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 36pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2B)</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Includes
                      3,000,000 shares underlying debentures and 2,100,000 shares
                      underlying
                      warrants.</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 36pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Assumes
                      no sales are transacted by the Selling Stockholder during the
                      offering
                      period.</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 36pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(4)</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                      General Partner of Cornell Capital Partners, LP is Yorkville
                      Advisors,
                      LLC. Mark Angelo is the control person of Yorkville Advisors,
                      LLC</font><a name="a21"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
                      Cornell became contractually obligated to purchase the three
                      debentures
                      and the three warrants.</font></a></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        </div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">60</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PLAN
          OF DISTRIBUTION</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Selling Stockholders (of record ownership and of beneficial ownership)
          and any
          of their pledges, assignees, and successors-in-interest may, from time
          to time,
          sell any or all of their shares of common stock on any stock exchange,
          market or
          trading facility on which the shares are traded or in private transactions.
          These sales may be at fixed or negotiated prices. The Selling Stockholders
          are
          not required to sell any shares in this offering. There is no assurance
          that the
          Selling Stockholders will sell any or all of the common stock in this offering.
          The Selling Stockholders may use any one or more of the following methods
          when
          selling shares:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ordinary
                    brokerage transactions and transactions in which the broker-dealer
                    solicits purchasers;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Block
                    trades in which the broker-dealer will attempt to sell the shares
                    as agent
                    but may position and resell a portion of the block as principal
                    to
                    facilitate the transaction;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purchases
                    by a broker-dealer as principal and resale by the broker-dealer
                    for its
                    own account;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">An
                    exchange distribution following the rules of the applicable
                    exchange;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Privately
                    negotiated transactions;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">An
                    agreement between a broker-dealer and a Selling Stockholder to
                    sell a
                    specified number of such shares at a stipulated price per
                    share;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
                    combination of any such methods of
                    sale;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
                    other lawful method.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Selling Stockholder may also engage in:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Buying
                    puts, which is a contract whereby the person buying the contract
                    may sell
                    shares at a specified price by a specified
                    date;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Selling
                    calls, which is a contract giving the person buying the contract
                    the right
                    to buy shares at a specified price by a specified
                    date;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Selling
                    under Rule 144 under the Securities Act, if available, rather
                    than under
                    this prospectus;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                    transactions in our securities or in derivatives of our securities
                    and the
                    subsequent sale or delivery of shares by the stock
                    holder;</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 36pt;">&#160;</td>
                <td style="width: 36pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pledging
                    shares to their brokers under the margin provisions of customer
                    agreements. If a Selling Stockholder defaults on a margin loan,
                    the broker
                    may, from time to time, offer and sell the pledged
                    shares.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">61</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Broker-dealers
          engaged by the Selling Stockholders may arrange for other broker-dealers
          to
          participate in sales. Broker-dealers may receive commissions or discounts
          from
          the Selling Stockholder in amounts to be negotiated. If any broker-dealer
          acts
          as agent for the purchaser of shares, the broker-dealer may receive commissions
          from the purchaser in amounts to be negotiated. We do not expect these
          commissions and discounts to exceed what is customary in the types of
          transactions involved.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
          are
          required to pay all fees and expenses incident to the registration of the
          shares
          in this offering. However, we will not pay any commissions or any other
          fees in
          connection with the resale of the common stock in this offering.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
          we are
          notified by a Selling Stockholder that they have a material arrangement
          with a
          broker-dealer for the resale of the common stock, then we would be required
          to
          amend the registration statement of which this prospectus is a part, and
          file a
          prospectus supplement to describe the agreements between the Selling Stockholder
          and the broker-dealer.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          offering expenses are estimated to be:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div align="center">
          <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="70%">

              <tr>
                <td align="left" valign="bottom" width="55%" style="border-bottom: medium none;">&#160;</td>
                <td width="2%" style="border-bottom: medium none;">&#160;</td>
                <td colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Amount
                    Paid or be Paid (1)</strong></font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="55%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SEC
                    registration fee</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,210.00</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="55%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="55%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Printing
                    and engraving cost</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,000.00</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="55%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Attorneys'
                    fees </font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">25,000.00</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="55%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounting
                    fees </font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,000.00</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="55%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Transfer
                    agent and registrar cost</font></div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,000.00</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="55%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Edgar
                    service provider cost</font></div>
                </td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,000.00</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="55%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Miscellaneous</font></div>
                </td>
                <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,000.00</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              </tr>
              <tr bgcolor="#cceeff">
                <td align="left" valign="bottom" width="55%" style="border-bottom: #cceeff;">&#160;</td>
                <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="55%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;Total</font></div>
                </td>
                <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">42,210.00</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)
          The
          amounts set forth are all estimates.</font><a name="a22"/></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CHANGES
          IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
          DISCLOSURE</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">None.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a name="a23"/>&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>INTEREST
          OF NAMED EXPERTS AND COUNSEL</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Joel
          Seidner, Esq., Attorney At Law, 880 Tully Road, Suite 50, Houston,
          Texas&#160;77079, tel. (281) 493-1311, has acted as our legal counsel for this
          offering. The validity of the shares offered by this prospectus has been
          passed
          upon for us by Mr. Seidner. Mr. Seidner owns 4,000 shares of our common
          stock.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          consolidated balance sheets as of June 30, 2005 and 2004, and the consolidated
          statements of operations, stockholders' deficit, and cash flows, for each
          of the
          three years in the period ended June 30, 2005 have been included in the
          registration statement on Form S-1 of which this prospectus forms a part,
          in
          reliance on the report of Malone &amp; Bailey, PC, Independent Registered Public
          Accounting Firm, given on the authority of that firm as experts in auditing
          and
          accounting.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DISCLOSURE
          OF COMMISSION POSITION ON</strong></font><a name="a25"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>
          INDEMNIFICATION FOR SECURITIES ACT LIABILITIES</strong></font></a></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
          Delaware General Corporation Law Code provides for indemnification as
          follows:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#167;
          145. &#160;Indemnification of officers, directors, employees and agents;
          insurance.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)
          A
          corporation shall have power to indemnify any person who was or is a party
          or is
          threatened to be made a party to any threatened, pending or completed action,
          suit or proceeding, whether civil, criminal, administrative or investigative
          (other than an action by or in the right of the corporation) by reason
          of the
          fact that the person is or was a director, officer, employee or agent of
          the
          corporation, or is or was serving at the request of the corporation as
          a
          director, officer, employee or agent of another corporation, partnership,
          joint
          venture, trust or other enterprise, against expenses (including attorneys'
          fees), judgments, fines and amounts paid in settlement actually and reasonably
          incurred by the person in connection with such action, suit or proceeding
          if the
          person acted in good faith and in a manner the person reasonably believed
          to be
          in or not opposed to the best interests of the corporation, and, with respect
          to
          any criminal action or proceeding, had no reasonable cause to believe the
          person's conduct was unlawful. The termination of any action, suit or proceeding
          by judgment, order, settlement, conviction, or upon a plea of nolo contendere
          or
          its equivalent, shall not, of itself, create a presumption that the person
          did
          not act in good faith and in a manner which the person reasonably believed
          to be
          in or not opposed to the best interests of the corporation, and, with respect
          to
          any criminal action or proceeding, had reasonable cause to believe that
          the
          person's conduct was unlawful.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)
          A
          corporation shall have power to indemnify any person who was or is a party
          or is
          threatened to be made a party to any threatened, pending or completed action
          or
          suit by or in the right of the corporation to procure a judgment in its
          favor by
          reason of the fact that the person is or was a director, officer, employee
          or
          agent of the corporation, or is or was serving at the request of the corporation
          as a director, officer, employee or agent of another corporation, partnership,
          joint venture, trust or other enterprise against expenses (including attorneys'
          fees) actually and reasonably incurred by the person in connection with
          the
          defense or settlement of such action or suit if the person acted in good
          faith
          and in a manner the person reasonably believed to be in or not opposed
          to the
          best interests of the corporation and except that no indemnification shall
          be
          made in respect of any claim, issue or matter as to which such person shall
          have
          been adjudged to be liable to the corporation unless and only to the extent
          that
          the Court of Chancery or the court in which such action or suit was brought
          shall determine upon application that, despite the adjudication of liability
          but
          in view of all the circumstances of the case, such person is fairly and
          reasonably entitled to indemnity for such expenses which the Court of Chancery
          or such other court shall deem proper.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">62</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)
          To
          the extent that a present or former director or officer of a corporation
          has
          been successful on the merits or otherwise in defense of any action, suit
          or
          proceeding referred to in subsections (a) and (b) of this section, or in
          defense
          of any claim, issue or matter therein, such person shall be indemnified
          against
          expenses (including attorneys' fees) actually and reasonably incurred by
          such
          person in connection therewith.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)
          Any
          indemnification under subsections (a) and (b) of this section (unless ordered
          by
          a court) shall be made by the corporation only as authorized in the specific
          case upon a determination that indemnification of the present or former
          director, officer, employee or agent is proper in the circumstances because
          the
          person has met the applicable standard of conduct set forth in subsections
          (a)
          and (b) of this section. Such determination shall be made, with respect
          to a
          person who is a director or officer at the time of such determination,
          (1) by a
          majority vote of the directors who are not parties to such action, suit
          or
          proceeding, even though less than a quorum, or (2) by a committee of such
          directors designated by majority vote of such directors, even though less
          than a
          quorum, or (3) if there are no such directors, or if such directors so
          direct,
          by independent legal counsel in a written opinion, or (4) by the
          stockholders.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)
          Expenses (including attorneys' fees) incurred by an officer or director
          in
          defending any civil, criminal, administrative or investigative action,
          suit or
          proceeding may be paid by the corporation in advance of the final disposition
          of
          such action, suit or proceeding upon receipt of an undertaking by or on
          behalf
          of such director or officer to repay such amount if it shall ultimately
          be
          determined that such person is not entitled to be indemnified by the corporation
          as authorized in this section. Such expenses (including attorneys' fees)
          incurred by former directors and officers or other employees and agents
          may be
          so paid upon such terms and conditions, if any, as the corporation deems
          appropriate.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(f)
          The
          indemnification and advancement of expenses provided by, or granted pursuant
          to,
          the other subsections of this section shall not be deemed exclusive of
          any other
          rights to which those seeking indemnification or advancement of expenses
          may be
          entitled under any bylaw, agreement, vote of stockholders or disinterested
          directors or otherwise, both as to action in such person's official capacity
          and
          as to action in another capacity while holding such office.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(g)
          A
          corporation shall have power to purchase and maintain insurance on behalf
          of any
          person who is or was a director, officer, employee or agent of the corporation,
          or is or was serving at the request of the corporation as a director, officer,
          employee or agent of another corporation, partnership, joint venture, trust
          or
          other enterprise against any liability asserted against such person and
          incurred
          by such person in any such capacity, or arising out of such person's status
          as
          such, whether or not the corporation would have the power to indemnify
          such
          person against such liability under this section.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(h)
          For
          purposes of this section, references to &#8220;the corporation&#8221; shall include, in
          addition to the resulting corporation, any constituent corporation (including
          any constituent of a constituent) absorbed in a consolidation or merger
          which,
          if its separate existence had continued, would have had power and authority
          to
          indemnify its directors, officers, and employees or agents, so that any
          person
          who is or was a director, officer, employee or agent of such constituent
          corporation, or is or was serving at the request of such constituent corporation
          as a director, officer, employee or agent of another corporation, partnership,
          joint venture, trust or other enterprise, shall stand in the same position
          under
          this section with respect to the resulting or surviving corporation as
          such
          person would have with respect to such constituent corporation if its separate
          existence had continued.</font></div><br>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          </div>
          <div id="PN" style="PAGE-BREAK-AFTER: always">
            <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">63</font></div>
            <div style="WIDTH: 100%; TEXT-ALIGN: center">
              <hr style="COLOR: black" noshade size="2">
            </div>
          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">i)
          For
          purposes of this section, references to &#8220;other enterprises&#8221; shall include
          employee benefit plans; references to &#8220;fines&#8221; shall include any excise taxes
          assessed on a person with respect to any employee benefit plan; and references
          to &#8220;serving at the request of the corporation&#8221; shall include any service as a
          director, officer, employee or agent of the corporation which imposes duties
          on,
          or involves services by, such director, officer, employee or agent with
          respect
          to an employee benefit plan, its participants or beneficiaries; and a person
          who
          acted in good faith and in a manner such person reasonably believed to
          be in the
          interest of the participants and beneficiaries of an employee benefit plan
          shall
          be deemed to have acted in a manner &#8220;not opposed to the best interests of the
          corporation&#8221; as referred to in this section.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(j)
          The
          indemnification and advancement of expenses provided by, or granted pursuant
          to,
          this section shall, unless otherwise provided when authorized or ratified,
          continue as to a person who has ceased to be a director, officer, employee
          or
          agent and shall inure to the benefit of the heirs, executors and administrators
          of such a person.</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(k)
          The
          Court of Chancery is hereby vested with exclusive jurisdiction to hear
          and
          determine all actions for advancement of expenses or indemnification brought
          under this section or under any bylaw, agreement, vote of stockholders
          or
          disinterested directors, or otherwise. The Court of Chancery may summarily
          determine a corporation's obligation to advance expenses (including attorneys'
          fees).</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
          Bylaws provide for indemnification. Our Bylaws--ARTICLE IV, as
          follows:</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 18pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INDEMNIFICATION.&#160;
                    This corporation shall, to the maximum extent permitted from
                    time to time
                    under the law of the State of Delaware,&#160;indemnify and upon request
                    shall advance expenses to any person who is or was a party or
                    is
                    threatened to be made a party to any threatened, pending or completed
                    action, suit, proceeding or claim, whether civil, criminal, administrative
                    or investigative, by reason of the fact that such person is or
                    was or has
                    agreed to be a director or officer of this corporation or any
                    of its
                    direct or indirect subsidiaries or while such a director or officer
                    is or
                    was serving at the request of this corporation as a director,
                    officer,
                    partner, trustee, employee or agent of any corporation, partnership,
                    joint
                    venture, trust or other enterprise, including service with respect
                    to
                    employee benefit plans, against expenses (including attorney's
                    fees and
                    expenses), judgments, fines, penalties and amounts paid in settlement
                    incurred in connection with the investigation, preparation to
                    defend or
                    defense of such action, suit, proceeding or claim: provided,
                    however, that
                    the foregoing shall not require this corporation to indemnify
                    or advance
                    expenses to any person in connection with any action, suit, proceeding,
                    claim or counterclaim initiated by or on behalf of such person.
                    Such
                    indemnification shall not be exclusive of other indemnification
                    rights
                    arising under any bylaws, agreement, vote of directors or stockholders
                    or
                    otherwise and shall inure to the benefit of the heirs and legal
                    representatives of such person. Any person seeking indemnification
                    under
                    this Article IV shall be deemed to have met the standard of conduct
                    required for such indemnification unless the contrary shall be
                    established.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 18pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INSURANCE.
                    &#160;The corporation may purchase and maintain insurance on behalf
                    of any
                    person who is or was a director, officer, employee or agent of
                    the
                    corporation, or is or was serving at the request of the corporation
                    as a
                    director, officer, employee or agent of another corporation,
                    partnership,
                    joint venture, trust or other enterprise against any liability
                    asserted
                    against him and incurred by him in any such capacity, or arising
                    out of
                    his status as such, whether or not the corporation would have
                    the power to
                    indemnify him against such liability under the provisions of
                    this Article
                    IV of the by-laws.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
          <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

              <tr valign="top" style="line-height: 1.25;">
                <td style="width: 18pt;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.</font></div>
                </td>
                <td>
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">DEFINITIONS.
                    &#160;For purposes of this Article IV, reference to the &#8220;corporation&#8221;
                    shall include, in addition to the resulting corporation, any
                    constituent
                    corporation (including any constituent of a constituent) absorbed
                    in a
                    consolidation or merger which, if its separate existence has
                    continued,
                    would have had power and authority to indemnify its directors,
                    officers
                    and employees or agents, so that any person who is or was a director,
                    officer, employee or agent of such constituent corporation, or
                    is or was
                    serving at the request of such constituent corporation as a director,
                    officer, employee or agent of another corporation, partnership,
                    joint
                    venture, trust or other enterprise, shall stand in the same position
                    under
                    the provisions of this Article IV with respect to the resulting
                    or
                    surviving corporation as he would have with respect to such constituent
                    corporation if its separate existence had continued. For purposes
                    of this
                    Article IV, references to &#8220;other enterprises&#8221; shall include employee
                    benefit plans; references to &#8220;fines&#8221; shall include any excise taxes
                    assessed on a person with respect to any employee benefit plan;
                    and
                    references to &#8220;serving at the request of the corporation&#8221; shall include
                    any service as a director, officer, employee or agent of the
                    corporation
                    which imposes duties on. or involves services by. such director,
                    officer,
                    employee, or agent with respect to an employee benefit plan,
                    its
                    participants, or beneficiaries; and a person who acted in good
                    faith and
                    in a manner he reasonably believed to be in the interest of the
                    participants and beneficiaries of an employee benefit plan shall
                    be deemed
                    to have acted in a manner &#8220;not opposed to the best interests of the
                    corporation&#8221; as referred to in this Article
                    IV.</font></div>
                </td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Insofar
          as indemnification for liabilities arising under the Securities Act of
          1933 may
          be permitted to directors, officers and controlling persons of the registrant
          pursuant to the foregoing provisions, or otherwise, the registrant has
          been
          advised that in the opinion of the Securities and Exchange Commission such
          indemnification is against public policy as expressed in the Act and is,
          therefore, unenforceable. In the event that a claim for indemnification
          against
          such liabilities (other than the payment by the registrant of expenses
          incurred
          or paid by a director, officer or controlling person of the registrant
          in the
          successful defense of any action, suit or proceeding) is asserted by such
          director, officer or controlling person in connection with the securities
          being
          registered, the registrant will, unless in the opinion of its counsel the
          matter
          has been settled by controlling precedent, submit to a court&#160;of appropriate
          jurisdiction the question whether such indemnification by it is against
          public
          policy as expressed in the Act and will be governed by the final adjudication
          of
          such issue. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">64</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
          <div>
            <div>
              <table cellpadding="0" cellspacing="0" width="100%">

                  <tr>
                    <td align="left" valign="middle" width="90%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYPERDYNAMICS
                        CORPORATION</font></div>
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Index
                        To Financial Statements</font></div>
                    </td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div align="left">
              <table cellpadding="0" cellspacing="0" width="100%">

                  <tr>
                    <td align="left" valign="bottom" width="88%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="10%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page</font></div>
                    </td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="88%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="10%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="88%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Report
                        Of Independent Registered Public Accounting Firm</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="10%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">F-2</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="88%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="10%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="88%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
                        Balance Sheets as of June 30, 2005 and 2004</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="10%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">F-3</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="88%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="10%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="88%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
                        Statements of Operations for the years ended &#160;June 30, 2005, 2004 and
                        2003</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="10%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">F-4</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="88%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="10%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="88%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
                        Statements of Changes in Stockholders' Equity&#160;for the years ended
                        June 30, 2005, 2004 and 2003</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="10%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">F-5</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="88%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="10%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="88%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
                        Statements of Cash Flows for the years ended&#160;June 30, 2005, 2004 and
                        2003</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="10%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">F-7</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="88%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="10%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="88%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notes
                        to Consolidated Financial Statements</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="10%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">F-9</font></div>
                    </td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
            <div style="MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
              <table cellpadding="0" cellspacing="0" width="60%">

                  <tr bgcolor="#cceeff">
                    <td align="left" valign="middle" width="80%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
                        Balance Sheet at March 31, 2006 (unaudited)</font></div>
                    </td>
                    <td align="right" valign="middle" width="20%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FF-1</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="middle" width="80%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
                        Statements of Operations for the three and nine months ended
                        March 31,
                        2006 and 2005 (unaudited)</font></div>
                    </td>
                    <td align="right" valign="middle" width="20%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FF-2</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="middle" width="80%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
                        Statements of Cash Flows for the nine months ended March
                        31, 2006
                        (unaudited)</font></div>
                    </td>
                    <td align="right" valign="middle" width="20%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FF-3</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="middle" width="80%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notes
                        to Consolidated Financial Statements (unaudited)</font></div>
                    </td>
                    <td align="right" valign="middle" width="20%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FF-4</font></div>
                    </td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">F-1</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>REPORT
              OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
              the
              Board of Directors and Stockholders</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hyperdynamics
              Corporation</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Houston,
              Texas</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
              have
              audited the accompanying consolidated balance sheets of Hyperdynamics
              Corporation and subsidiaries as of June 30, 2005 and 2004, and the
              related
              consolidated statements of operations, changes in stockholders' equity,
              and cash
              flows for each of the three years in the period ended June&#160;30, 2005. These
              financial statements are the responsibility of Hyperdynamics' management.
              Our
              responsibility is to express an opinion on these financial statements
              based on
              our audits.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
              conducted our audits in accordance with standards of Public Company
              Accounting
              Oversight Board (United States). Those standards require that we plan
              and
              perform the audits to obtain reasonable assurance about whether the
              financial
              statements are free from material misstatement. An audit includes examining,
              on
              a test basis, evidence supporting the amounts and disclosures in the
              financial
              statements. An audit also includes assessing the accounting principles
              used and
              significant estimates made by management, as well as evaluating the
              overall
              financial statement presentation. We believe that our audits provide
              a
              reasonable basis for our opinion.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
              our
              opinion, the consolidated financial statements referred to above present
              fairly,
              in all material respects, the financial position of Hyperdynamics Corporation
              as
              of June 30, 2005 and 2004, and the results of its operations and its
              cash flows
              for each of the three years in the period ended June&#160;30, 2005, in
              conformity with accounting principles generally accepted in the United
              States of
              America.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>MALONE&#160;&amp;
              BAILEY, PC</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">www.malone-bailey.com</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Houston,
              Texas</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">September
              21, 2005</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">F-2</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYPERDYNAMICS
              CORPORATION</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CONSOLIDATED
              BALANCE SHEETS</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
              of
              June 30, 2005 and 2004</font></div>
            <div>
              <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                  <tr>
                    <td align="left" valign="bottom" width="71%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2005</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2004</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="71%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ASSETS</font></div>
                    </td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="71%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Current
                        Assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">259,448</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,149,441</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Restricted
                        certificate of deposit</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">65,445</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">129,750</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
                        receivable, net of allowance for doubtful accounts of $31,242
                        and $16,451,
                        respectively</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">19,635</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,244</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Inventory</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,637</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">83,730</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Prepaid
                        expense</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">167,250</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">130,384</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                        current assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">167</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                        Current Assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">515,415</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,521,716</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Property
                        and equipment, net of accumulated depreciation of $314,171
                        and $207,667,
                        respectively</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">599,092</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">406,821</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investment
                        in Oil and Gas Properties, using Full Cost Method of
                        Accounting</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,072,503</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,191,565</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Restricted
                        certificate of deposit</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">65,445</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Deposit</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">22,312</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21,632</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Customer
                        list, net of accumulated amortization of $4,441 in 2004</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">75,483</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">TOTAL
                        ASSETS</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,209,322</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,282,662</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">LIABILITIES
                        AND STOCKHOLDERS' EQUITY</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Current
                        Liabilities</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Current
                        portion of installment notes payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">247,750</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">126,670</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
                        payable and accrued expenses</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">558,314</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">319,231</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
                        payable seismic data</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">650,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">650,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Deferred
                        Gain</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">73,464</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Customer
                        deposits</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,264</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Note
                        payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">281,250</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dividends
                        payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">372,398</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">352,953</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dividends
                        payable to related party</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,250</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">163,500</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                        Current Liabilities</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,929,176</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,896,868</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Deferred
                        Rent</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,697</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">141,482</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Long-term
                        portion of installment notes payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">43,372</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mandatorily
                        redeemable preferred stock, net of $25,750 unamortized offering
                        costs and
                        $206,000 unamortized discount in 2004</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">540,750</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                        Liabilities</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,063,873</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,622,472</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Commitments
                        and Contingencies</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stockholders'
                        Equity</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Convertible
                        preferred stock, par value $.001; stated value $1,000; 20,000,000
                        authorized; Series A - 1,945 shares issued and outstanding</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series
                        B - 2,725 shares issued and outstanding</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
                        Stock, par value $.001; 50,000,000 shares authorized; 42,168,410
                        and
                        41,206,953 shares issued and outstanding</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">42,168</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">41,207</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Additional
                        paid in capital</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">22,915,690</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">19,086,822</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accumulated
                        deficit</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(19,812,414</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(14,467,844</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                        Stockholders' Equity</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,145,449</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,660,190</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">TOTAL
                        LIABILITIES AND STOCKHOLDERS' EQUITY</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,209,322</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,282,662</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div>
              <table cellpadding="0" cellspacing="0" width="100%">

                  <tr>
                    <td align="left" valign="middle" width="90%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
                        accompanying summary of accounting policies and notes to
                        financial
                        statements.</font></div>
                    </td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">F-3</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYPERDYNAMICS
              CORPORATION</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CONSOLIDATED
              STATEMENTS OF OPERATIONS</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Years
              Ended June 30, 2005, 2004 and 2003</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
            <div>
              <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                  <tr>
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2005</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">
                      <div>&#160;</div>
                    </td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2004</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">
                      <div>&#160;</div>
                    </td>
                    <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2003</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="57%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">172,699</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">38,344</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">468,022</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operating
                        Expenses</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cost
                        of revenues</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,348,529</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">207,200</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">469,158</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Selling</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">63,225</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">48,568</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">38,745</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">General
                        and administrative</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,536,190</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,838,486</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,493,820</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Impairment</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">704,061</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation
                        and amortization</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">124,660</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">61,004</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">176,938</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                        Operating Expenses</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,072,604</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,155,258</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,882,722</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">LOSS
                        FROM OPERATIONS</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(4,899,905</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,116,914</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,414,700</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                        Income (Expense)</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
                        expense</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(239,187</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(474,463</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(55,407</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
                        income</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">16,973</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,268</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,139</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Gain)
                        loss on retirement and sale of assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,159</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(5,431</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                        on retirement of mandatorily redeemable preferred stock</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(76,847</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gain
                        on debt payoff</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">92,066</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                        Other Income (Expense)</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(316,220</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(374,129</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(43,837</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NET
                        LOSS</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(5,216,125</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,491,043</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,458,537</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Preferred
                        dividend requirement</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(128,445</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(186,779</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(186,779</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NET
                        LOSS CHARGEABLE TO COMMON SHAREHOLDERS</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(5,344,570</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,677,822</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,645,316</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Basic
                        and diluted loss per common share</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(.13</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(.12</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(.12</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Weighted
                        average shares outstanding</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">41,646,844</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">31,938,926</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">22,580,526</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div>
              <table cellpadding="0" cellspacing="0" width="100%">

                  <tr>
                    <td align="left" valign="middle" width="90%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
                        accompanying summary of accounting policies and notes to
                        financial
                        statements.</font></div>
                    </td>
                  </tr>

              </table>
            </div><br>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">F-4</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div><br>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYPERDYNAMICS
              CORPORATION</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CONSOLIDATED
              STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Years
              Ended June 30, 2005, 2004 and 2003</font></div>
            <div>
              <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                  <tr>
                    <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td colspan="5" valign="bottom" width="26%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Preferred</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td colspan="5" valign="bottom" width="25%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Common</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Shares</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Amount</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Shares</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Amount</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Balances,
                        June 30, 2002</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,670</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21,033,791</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21,034</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
                        stock issued for:</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        cash</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,371,811</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,372</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        exercise of options</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">573,821</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">574</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        services</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">405,526</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">405</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        accounts payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">383,643</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">384</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Issuance
                        of stock options and warrants</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Preferred
                        stock dividends</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Funds
                        raised from sale of warrants to purchase Hyperdynamics Corporation
                        stock
                        in association with SCS Corp. units</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Beneficial
                        conversion feature associated with convertible notes payable
                        to
                        officers</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Payment
                        of preferred stock dividends in common shares</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">862,915</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">863</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                        loss</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Balances,
                        June 30, 2003</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,670</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,631,507</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,632</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
                        stock issued for:</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        cash, net</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,575,543</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,576</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        exercise of options for cash, net</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">179,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">179</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        cashless exercise of options, net of 257,070 shares
                        returned</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,976,263</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,976</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        services</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">181,250</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">181</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        accounts payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">35,489</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">35</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        conversion of notes payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,595,573</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,596</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        acquisition of HYD Resources</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">32,328</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">32</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Issuance
                        of stock options and warrants</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Preferred
                        stock dividends</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Funds
                        raised from sale of warrants to purchase Hyperdynamics Corporation
                        stock
                        in association with SCS Corp. units</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                        loss</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Balances,
                        June 30, 2004</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,670</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">41,206,953</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">41,207</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
                        stock issued for:</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        exercise of options</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">321,500</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">321</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        services</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">155,756</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">156</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        conversion of mandatorily redeemable preferred stock</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">269,634</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">270</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        accounts payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">25,372</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">25</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        acquisition of HYD Resources</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">101,480</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">101</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Issuance
                        of stock options and warrants</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Preferred
                        stock dividends</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Payment
                        of preferred stock dividends in common shares</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">87,715</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">88</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                        loss</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;
                        &#160; </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Balances,
                        June 30, 2005</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,670</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">42,168,410</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">42,168</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div>
              <table cellpadding="0" cellspacing="0" width="100%">

                  <tr>
                    <td align="left" valign="middle" width="90%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
                        accompanying summary of accounting policies and notes to
                        consolidated
                        financial statements.</font></div>
                    </td>
                  </tr>

              </table>
            </div><br>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">F-5</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div><br>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYPERDYNAMICS
              CORPORATION</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CONSOLIDATED
              STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Years
              Ended June 30, 2005, 2004 and 2003</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Continued)</font></div>
            <div>
              <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                  <tr>
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Additional
                        Paid in Capital</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Accumulated
                        Deficit</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Totals</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="57%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Balances,
                        June 30, 2002</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,491,055</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(8,144,706</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">367,388</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
                        stock issued for:</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        cash</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">668,628</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">673,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        exercise of options</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">116,065</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">116,639</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        services</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">112,216</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">112,621</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        accounts payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">105,336</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">105,720</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Issuance
                        of stock options and warrants</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">500,427</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">500,427</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Preferred
                        stock dividends</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(186,779</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(186,779</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Funds
                        raised from sale of warrants to purchase Hyperdynamics Corporation
                        stock
                        in association with SCS Corp. units</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">35,903</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">35,903</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Beneficial
                        conversion feature associated with convertible notes payable
                        to
                        officers</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">243,934</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">243,934</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Payment
                        of preferred stock dividends in common shares</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">171,720</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">172,583</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                        loss</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,458,537</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,458,537</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Balances,
                        June 30, 2003</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,445,284</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(10,790,022</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(317,101</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
                        stock issued for:</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        cash, net</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,870,237</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,878,813</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        exercise of options for cash, net</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">67,071</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">67,250</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        cashless exercise of options, net of 257,070 shares
                        returned</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(27,948</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(24,972</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        services</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">393,557</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">393,738</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        accounts payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">76,204</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">76,239</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        conversion of notes payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">266,460</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">268,056</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        acquisition of HYD Resources</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">93,718</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">93,750</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Issuance
                        of stock options and warrants</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,783,642</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,783,642</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Preferred
                        stock dividends</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(186,779</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(186,779</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Funds
                        raised from sale of warrants to purchase Hyperdynamics</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Corporation
                        stock in association with SCS Corp. units</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">118,597</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">118,597</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                        loss</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,491,043</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,491,043</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Balances,
                        June 30, 2004</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">19,086,822</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(14,467,844</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,660,190</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
                        stock issued for:</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        exercise of options</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">167,304</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">167,625</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        services</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">389,904</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">390,060</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        conversion of mandatorily redeemable preferred stock</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">849,077</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">849,347</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        accounts payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">63,187</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">63,212</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
                        acquisition of HYD Resources</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">281,149</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">281,250</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Issuance
                        of stock options and warrants</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,833,085</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,833,085</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Preferred
                        stock dividends</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(128,445</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(128,445</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Payment
                        of preferred stock dividends in common shares</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">245,162</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">245,250</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                        loss</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(5,216,125</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(5,216,125</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white solid;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">22,915,690</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(19,812,414</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,145,449</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div>
              <table cellpadding="0" cellspacing="0" width="100%">

                  <tr>
                    <td align="left" valign="middle" width="90%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
                        accompanying summary of accounting policies and notes to
                        consolidated
                        financial statements.</font></div>
                    </td>
                  </tr>

              </table>
            </div><br>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">F-6</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div>
              <table cellpadding="0" cellspacing="0" width="100%">

                  <tr>
                    <td align="left" valign="middle" width="90%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYPERDYNAMICS
                        CORPORATION</font></div>
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CONSOLIDATED
                        STATEMENTS OF CASH FLOWS</font></div>
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Years
                        Ended June 30, 2005, 2004 and 2003</font></div>
                    </td>
                  </tr>
                  <tr>
                    <td align="left" valign="middle" width="90%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div>
              <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                  <tr>
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2005</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2004</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2003</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="57%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CASH
                        FLOWS FROM OPERATING ACTIVITIES</font></div>
                    </td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                        loss</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(5,216,125</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,491,043</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,458,537</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Adjustments
                        to reconcile net loss to cash used in operating
                        activities:</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation
                        and amortization</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">124,659</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">61,004</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">176,938</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
                        issued for services</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">48,010</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">112,621</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Options
                        and warrants issued</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,833,085</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,783,642</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">500,427</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Beneficial
                        conversion feature associated with convertible notes payable
                        to
                        officers</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">249,066</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">18,990</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Gain)/loss
                        on disposition of assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,160</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(5,431</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Impairment</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">704,061</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Bad
                        debt expense</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">14,791</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(216</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">11,671</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accretion
                        of interest and amortization of offering costs of mandatorily
                        redeemable
                        Preferred stock</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">231,750</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">231,750</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                        on retirement of mandatorily redeemable Preferred stock</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">76,847</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shares
                        withheld from cashless exercise of Options</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">--</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(24,972</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Changes
                        in assets and liabilities</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
                        receivable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(6,182</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(20,853</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,765</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Inventory</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">46,016</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(28,261</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,034</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                        current assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(36,699</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">234</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,324</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
                        payable and accrued expenses</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">302,291</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(98,358</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">345,050</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accrued
                        officer salaries</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">110,330</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Customer
                        deposits</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,264</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(36,878</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Change
                        in deferred rent</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(6,786</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9,577</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9,576</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NET
                        CASH USED IN OPERATING ACTIVITIES</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,574,447</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,328,430</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(496,059</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CASH
                        FLOWS FROM INVESTING ACTIVITIES</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purchases
                        of property and equipment</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(266,956</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(129,112</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(35,932</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Decrease
                        in restricted cash</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">129,750</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">86,391</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">82,724</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds
                        from sale of assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,413</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">39,356</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investment
                        in unproved property</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,250,406</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,900,990</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(321,233</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Return
                        of deposit</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(680</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,800</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NET
                        CASH USED IN INVESTING ACTIVITIES</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,374,879</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,941,911</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(235,085</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CASH
                        FLOWS FROM FINANCING ACTIVITIES</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds
                        from sale of common stock, net</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,878,813</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">673,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds
                        from exercise of options, net</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">167,625</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">67,250</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">116,639</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds
                        from sale of units consisting of warrants in Hyperdynamics
                        and preferred
                        stock in subsidiary, net of $39,500 and $12,000 offering
                        cost,
                        respectively</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">355,500</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">108,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds
                        from sale of working interest in oil and gas properties,
                        net</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">814,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds
                        from installment debt</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">227,454</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Payments
                        on installment debt</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(149,746</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(57,798</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(19,493</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NET
                        CASH PROVIDED BY FINANCING ACTIVITIES</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,059,333</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,243,765</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">878,146</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div>
              <table cellpadding="0" cellspacing="0" width="100%">

                  <tr>
                    <td align="left" valign="middle" width="90%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
                        accompanying summary of accounting policies and notes to
                        financial
                        statements.</font></div>
                    </td>
                  </tr>

              </table>
            </div><br>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">F-7</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div>
              <table cellpadding="0" cellspacing="0" width="100%">

                  <tr>
                    <td align="left" valign="middle" width="90%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYPERDYNAMICS
                        CORPORATION</font></div>
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CONSOLIDATED
                        STATEMENTS OF CASH FLOWS</font></div>
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Years
                        Ended June 30, 2005, 2004 and 2003</font></div>
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Continued)</font></div>
                    </td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
              <div>
                <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                    <tr>
                      <td align="left" valign="bottom" width="57%" style="border-bottom: #ffffff solid;">&#160;</td>
                      <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                      <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2005</strong></font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                      <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2004</strong></font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                      <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2003</strong></font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                    </tr>
                    <tr bgcolor="#cceeff">
                      <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                          Change In Cash</font></div>
                      </td>
                      <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,889,993</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,973,424</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">147,002</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    </tr>
                    <tr bgcolor="white">
                      <td align="left" valign="bottom" width="57%" style="border-bottom: white solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CASH
                          AT BEGINNING OF PERIOD</font></div>
                      </td>
                      <td width="2%" style="border-bottom: white solid;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,149,441</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">176,017</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">29,015</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                    </tr>
                    <tr bgcolor="#cceeff">
                      <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CASH
                          AT END OF PERIOD</font></div>
                      </td>
                      <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">259,448</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,149,441</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">176,017</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                    </tr>
                    <tr bgcolor="white">
                      <td align="left" valign="bottom" width="57%" style="border-bottom: white;">&#160;</td>
                      <td width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    </tr>
                    <tr bgcolor="#cceeff">
                      <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUPPLEMENTAL
                          DISCLOSURES</font></div>
                      </td>
                      <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    </tr>
                    <tr bgcolor="white">
                      <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
                          paid in cash</font></div>
                      </td>
                      <td width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,437</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,100</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21,107</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    </tr>
                    <tr bgcolor="#cceeff">
                      <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Income
                          taxes paid in cash</font></div>
                      </td>
                      <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    </tr>
                    <tr bgcolor="white">
                      <td align="left" valign="bottom" width="57%" style="border-bottom: white;">&#160;</td>
                      <td width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    </tr>
                    <tr bgcolor="#cceeff">
                      <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NON-CASH
                          TRANSACTIONS</font></div>
                      </td>
                      <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    </tr>
                    <tr bgcolor="white">
                      <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Issuance
                          of common stock for accounts payable</font></div>
                      </td>
                      <td width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">63,212</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">76,239</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">105,720</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    </tr>
                    <tr bgcolor="#cceeff">
                      <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Payment
                          of preferred stock dividends in common shares</font></div>
                      </td>
                      <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">245,250</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">172,583</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    </tr>
                    <tr bgcolor="white">
                      <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Conversion
                          of accrued officer salary to convertible notes payable
                          to officers net of
                          amortized discount</font></div>
                      </td>
                      <td width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">224,944</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    </tr>
                    <tr bgcolor="#cceeff">
                      <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Conversion
                          of notes payable to common stock</font></div>
                      </td>
                      <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">268,056</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    </tr>
                    <tr bgcolor="white">
                      <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Conversion
                          of mandatorily redeemable preferred stock</font></div>
                      </td>
                      <td width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">849,347</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    </tr>
                    <tr bgcolor="#cceeff">
                      <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Issuance
                          of stock for oil and gas properties</font></div>
                      </td>
                      <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">342,050</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">393,738</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    </tr>
                    <tr bgcolor="white">
                      <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purchase
                          of HYD Resources for stock and note payable</font></div>
                      </td>
                      <td width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">375,000</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    </tr>
                    <tr bgcolor="#cceeff">
                      <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
                          issued for note payable</font></div>
                      </td>
                      <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">281,250</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    </tr>

                </table>
              </div>
              <div>&#160;</div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
              accompanying summary of accounting policies and notes to financial
              statements.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">F-8</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hyperdynamics
              Corporation</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Notes
              To
              Consolidated Financial Statements</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Note
              1 - Significant Accounting Policies</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Nature
              of
              business. Hyperdynamics Corporation (Hyperdynamics) is a Delaware corporation
              formed in March 1996. Hyperdynamics utilizes its integrated technology
              infrastructure to provide support to its wholly-owned subsidiaries,
              SCS
              Corporation (SCS), HYD Resources Corporation (HYD), and Trendsetter
              Production
              Company (Trendsetter). Through SCS, Hyperdynamics focuses on oil and
              gas
              exploration offshore Guinea. SCS began operations in oil and gas exploration,
              seismic data acquisition, processing, and interpretation in late fiscal
              2002. In
              April 2004, Hyperdynamics acquired HYD, and in January 2005, Hyperdynamics
              acquired Trendsetter, an oil and gas operator in Louisiana that had
              been under
              common ownership with HYD. Trendsetter owns oil and gas leases. It
              contracts
              with its sister company, HYD, which drills new wells in shallow, proven
              areas
              and implements production facilities on Trendsetter leases to produce
              oil and
              gas. The fiscal year-end is June 30. Basis of presentation. The consolidated
              financial statements include the accounts of Hyperdynamics and its
              wholly-owned
              subsidiaries, SCS, HYD Resources Corporation, and Trendsetter Production
              Company. Significant inter-company accounts and transactions have been
              eliminated. Estimates and assumptions. Preparing financial statements
              in
              conformity with accounting principles generally accepted in the United
              States of
              America requires management to make estimates and assumptions that
              affect the
              reported amounts of assets, liabilities, revenue and expenses at the
              balance
              sheet date and for the period then ended. Actual results could differ
              from these
              estimates. Cash and cash equivalents include all highly liquid investments
              purchased with original maturity of three months or less. Restricted
              cash is a
              certificate of deposit at a bank that uses the letter of credit as
              collateral
              for supporting Hyperdynamics' lease commitment. The CD matures on May
              9, 2006
              and accrues interest at 1.3% annually. The restriction on the CD will
              be lifted
              on November 1, 2005. Revenue recognition. Revenue, if any, from tape
              conversions, consulting and oil field services, is recognized when
              services are
              rendered. Revenues for oil and gas sales are recognized at the point
              when title
              to the oil or gas passes to the customer. For oil sales, this occurs
              when the
              customer's truck takes delivery of oil from Trendsetter's storage tanks.
              Property and equipment. Hyperdynamics follows the full cost accounting
              method to
              account for the costs incurred in the acquisition, exploration, development
              and
              production of oil and gas reserves. Under this method, all costs including
              internal costs that are directly related to acquisition, exploration,
              and
              development activities are capitalizable as oil and gas property
              costs.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amortization
              of unproved property costs begins when the properties become proved
              or their
              values become impaired. Hyperdynamics assesses the realizability of
              unproved
              properties at least annually or when there has been an indication that
              an
              impairment in value may have occurred. Impairment of unproved properties
              is
              assessed based on management's intention with regard to future exploration
              and
              development of individually significant properties and the ability
              of
              Hyperdynamics to obtain funds to finance such exploration and development.
              If
              the results of an assessment indicate that the properties are impaired,
              the
              amount of the impairment is added to the capitalized costs to be amortized.
              Under full cost accounting rules for each cost center, capitalized
              costs of
              proved properties, less accumulated amortization and related deferred
              income
              taxes, shall not exceed an amount (the &#8220;cost ceiling&#8221;) equal to the sum of (a)
              the present value of future net cash flows from estimated production
              of proved
              oil and gas reserves, based on current economic and operating conditions,
              discounted at 10 percent, plus (b) the cost of properties not being
              amortized,
              plus (c) the lower of cost or estimated fair value of any unproved
              properties
              included in the costs being amortized, less (d) any income tax effects
              related
              to differences between the book and tax basis of the properties involved.
              If
              capitalized costs exceed this limit, the excess is charged as an impairment
              expense. Accounts receivable are written down to reflect management's
              best
              estimate based upon known specific analysis, historical experience,
              and other
              currently available evidence of the net collectible amount. Inventory
              consists
              of oil field equipment and is stated at the lower of cost or market
              using the
              first-in first-out basis (FIFO). Long-lived assets. Property, equipment
              and a
              building are stated on the basis of historical cost less accumulated
              depreciation. Depreciation is provided using the straight-line method
              over the
              estimated useful lives of the assets of 3 - 15 years. The Company follows
              Statement of Financial Accounting Standards No. 144, Accounting for
              the
              Impairment or Disposal of Long-Lived Assets, by reviewing such assets
              for
              impairment whenever events or changes in circumstances indicate that
              the
              carrying amount of an asset may not be recoverable. Impairment loss
              recognized
              is the excess of the carrying amount over the fair value of the asset.
              Accounts
              payable and accrued expenses as of June 30, 2005 and 2004 consist of
              the
              following:</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div align="center">
              <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="60%">

                  <tr>
                    <td align="left" valign="bottom" width="31%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2005</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2004</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="31%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
                        payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">332,635</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">252,601</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="31%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accrued
                        payroll expenses</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">112,249</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,378</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="31%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accrued
                        insurance</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">110,494</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="31%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Taxes
                        payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,258</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">29,945</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="31%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accrued
                        warranty</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">678</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,831</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="31%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Current
                        portion of deferred rent</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,476</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="31%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="31%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Total</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">558,314</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">319,231</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Deferred
              rent represents the difference between the rent expense per month as
              calculated
              based on the total contractual payments specified over the 10 year
              period of the
              lease and the actual monthly rent paid. It arises because the initial
              6 months
              of the lease were free and because the rent payment increases after
              the 60th
              month of the lease. The deferral reverses beginning in the year ended
              June 30,
              2005. Income taxes are computed using the tax liability method of accounting,
              whereby deferred income taxes are determined based on differences between
              financial reporting and tax bases of assets and liabilities and are
              measured
              using the enacted tax rates that will be in effect when the differences
              reverse.
              Hyperdynamics accounts for stock options issued to employees under
              the
              recognition and measurement principles of FASB Statement No. 123, Accounting
              for
              Stock-Based Compensation. No options are outstanding as of June 30,
              2005 and
              2004. The basic net loss per common share is computed by dividing the
              net loss
              chargeable to common stockholders by the weighted average number of
              common
              shares outstanding. Diluted net loss per common share is computed by
              dividing
              the net loss applicable to common stockholders, adjusted on an &#8220;as if converted&#8221;
basis, by the weighted average number of common shares outstanding
              plus
              potential dilutive securities. For the years ended June 30, 2005, 2004
              and 2003,
              potential dilutive securities had an anti-dilutive effect and were
              not included
              in the calculation of diluted net loss per common share. Recently issued
              accounting pronouncements. Hyperdynamics does not expect the adoption
              of
              recently issued accounting pronouncements to have a significant impact
              on
              Hyperdynamics' results of operations, financial position or cash flow.
              Reclassifications. &#160;Certain prior year amounts have been reclassified to
              conform with the current year presentation.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Note
              2 - HYD Resources Corporation and Trendsetter Production
              Company</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
              April
              2004, Hyperdynamics purchased 100% of the stock of HYD for $375,000
              to be paid
              in Hyperdynamics common stock in four quarterly installments to be
              paid between
              April 2004 and January 2005. At the time of acquisition, HYD had no
              operations
              and consisted solely of assets donated to the company by its initial
              shareholders. As of June 30, 2005, the entire purchase price has been
              paid. The
              final purchase price allocation is:</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div align="center">
              <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="60%">

                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="45%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Inventory</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">15,400</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="45%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Field
                        equipment</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">359,600</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="45%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="45%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                        assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">375,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="45%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Liabilities</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="45%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="45%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                        Assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">375,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">F-9</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYD
              is a
              dealer of used equipment and it provides oil field services, such as
              well
              workovers, drilling services, and the repair and leasing of equipment
              to oil
              field operators. In conjunction with the purchase of HYD, Hyperdynamics
              entered
              into two employment agreements with HYD's prior owners under which
              Hyperdynamics
              agreed to pay two employees $3,500 per month. Under the contracts,
              Hyperdynamics
              may terminate the employment agreements for cause, or if HYD experiences
              a
              cumulative net loss any time after the first nine months of operation.
              One of
              the employees was terminated early in 2005 and the other remains as
              the primary
              operating officer. The initial employment agreements stipulated that
              bonuses, in
              the form of three contingent notes payable, of up to $856,000 will
              be paid based
              upon HYD's net income over the next five years. The payments will be
              25% of the
              net income for each quarter, if there is net income after offsetting
              any losses
              from previous quarters. As of June 30, 2005, HYD had a cumulative net
              loss of
              approximately $1,381,524. This amount would need to be earned as net
              income in
              current and future periods prior to having to pay the contingent note
              with 25%
              of net income in excess of the recovery amount. The previous owners
              of HYD also
              previously owned Trendsetter Production Company (Trendsetter), a Louisiana
              oil
              and gas operator. In January 2005, Hyperdynamics acquired Trendsetter.
              Trendsetter at that time had no operations and one oil lease of nominal
              cost.
              This transaction involved entities under common control; accordingly,
              Trendsetter's asset was recorded at historical cost. The reporting
              segment for
              the HYD and Trendsetter Production Company is designated as &#8220;HYDR&#8221;.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Note
              3 - Property and Equipment</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
              summary
              of property and equipment as of June 30, 2005 and 2004 is as
              follows:</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div align="center">
              <table cellpadding="0" cellspacing="0" id="ftable" width="80%">

                  <tr>
                    <td align="left" valign="bottom" width="37%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2005</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2004</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="37%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Computer
                        equipment and software</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3
                        years</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">153,689</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">193,400</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="37%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Office
                        equipment and furniture</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5
                        years</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,892</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,892</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="37%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Oil
                        field equipment</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3
                        years</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">64,252</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="37%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Oil
                        field equipment</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5
                        years</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">551,038</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="37%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                        equipment</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5
                        years</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">80,392</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">407,196</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="37%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Building</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">15
                        years</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">25,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="37%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Land</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">N/A</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">25,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="37%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="37%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;Total
                        cost</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">913,263</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">614,488</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="37%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Less:
                        accumulated depreciation and amortization</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #ffffff thin solid;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(314,171</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(207,667</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="37%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="37%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;Net
                        carrying value</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #ffffff thin solid;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">599,092</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">406,821</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hyperdynamics
              reviews assets for impairment whenever events or changes in circumstances
              indicate that the carrying amount of an asset may not be recoverable.
              During the
              years ended June&#160;30, 2005 and 2004, there was no impairment of
              Hyperdynamics' assets. During the year ended June&#160;30, 2003, Hyperdynamics
              had a goodwill impairment of $380,000 and an asset impairment of
              $354,061.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Note
              4 - Investment in Oil and Gas Properties</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investment
              in Oil and Gas Properties consist of Hyperdynamics' concession in offshore
              Guinea, as previously disclosed, and leaseholds in Louisiana, USA.
              Proved Oil
              and Gas Properties relate to three leases in Louisiana, USA. The following
              table
              provides detail of costs to date by country as of June 30, 2005 and
              2004:</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div>
              <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                  <tr>
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Republic
                        of Guinea</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>USA</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="57%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>As
                        of June 30, 2005</u></font></div>
                    </td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Lease
                        acquisition costs</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proved</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,269</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,269</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unproved</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">290,452</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,329</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">303,781</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exploration
                        costs - unproved properties</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Geological
                        and geophysical costs</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,782,051</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,782,051</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Drilling</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">50,773</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">50,773</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Development
                        costs</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">607,175</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">607,175</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purchased
                        proved reserves</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">64,990</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">64,990</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cost
                        recovery (sale of working Interest)</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(740,536</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(740,536</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,072,503</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,072,503</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>As
                        of June 30, 2004</u></font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Lease
                        acquisition costs</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unproved</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">290,452</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">290,452</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exploration
                        costs - unproved properties</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Geological
                        and geophysical costs</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,901,113</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,901,113</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="57%" style="border-bottom: white solid;">&#160;</td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,191,565</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,191,565</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>

              </table>
            </div>
            <div>&#160;</div>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">F-10</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Sale
              of working interest</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
              March 2005, Hyperdynamics began to market working interest units in
              one lease in
              Louisiana, USA. The working interest units were priced at $55,000 for
              each one
              percent working interest. 49 units were available for sale. Marketing
              costs
              related to these units are 20%. As of June 30, 2005, 18.5 units had
              been sold,
              resulting in net proceeds of $814,000. The proceeds reduced the full
              cost pool
              related to the USA by $740,536. By the terms of the agreement, Hyperdynamics
              must drill an additional four wells to the casing point at its own
              expense.
              Because Hyperdynamics has this obligation to the working interest investors
              as
              of June&#160;30, 2005, there will be no gain computed on the sale of these units
              until the obligation is fulfilled. Therefore, the balance of the net
              proceeds,
              $73,464, is reflected as deferred gain as of June 30, 2005.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Republic
              of Guinea Production Sharing Agreement (PSA)</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
              the
              PSA, SCS had the following obligations:</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div>
              <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                  <tr valign="top" style="line-height: 1.25;">
                    <td style="width: 18pt;">&#160;</td>
                    <td style="width: 18pt;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a.</font></div>
                    </td>
                    <td>
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
                        to the PSA, a payment to the Government of Guinea of $250,000
                        was made in
                        June 2003. The PSA specifies royalties and production sharing
                        if oil and
                        gas is discovered offshore Guinea . The PSA was filed in
                        a Form 8-K filed
                        on July 29, 2005,</font></div>
                    </td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div>
              <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                  <tr valign="top" style="line-height: 1.25;">
                    <td style="width: 18pt;">&#160;</td>
                    <td style="width: 18pt;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">b.</font></div>
                    </td>
                    <td>
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SCS
                        must perform 2-D seismic and other work on 4,000 kilometers
                        of seismic
                        acquired in 2003, as well as additional work on pre-acquired
                        seismic,
                        exceeding the work requirement obligation of the PSA for
                        the First
                        Exploration Period which ended in December 2003. SCS has
                        continued its
                        work in 2004 and 2005 and contracted with third parties for
                        a satellite
                        seeps study and a coring analysis as well as obtaining an
                        independent
                        interpretation of its data from an internationally known
                        vendor,
                        PGS.</font></div>
                    </td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div>
              <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                  <tr valign="top" style="line-height: 1.25;">
                    <td style="width: 18pt;">&#160;</td>
                    <td style="width: 18pt;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">c.</font></div>
                    </td>
                    <td>
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
                        the second exploration period, SCS is required to drill at
                        least one
                        exploratory well at an estimated cost of $10 million. The
                        time frame SCS
                        has to complete this requirement is at least four years.
                        Because of events
                        as explained below, management believes the time frames are
                        frozen as a
                        case for Force Majeure has occurred pursuant to the
                        PSA.</font></div>
                    </td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
              SCS
              were to continue to perform under the 2002 PSA as farmed out from USOil,
              SCS
              would pay USOil $1,600,000 conditionally if SCS obtains third party
              financing
              for this Guinea development project from an oil company partner participating
              in
              a working interest purchase or a 3rd party financing company. Also
              under the
              2002 PSA and associated Farmout Agreement with USOil, a 3% royalty
              on oil and
              gas production would also be paid to USOil. With the events surrounding
              the 8-K
              filed in July with regard to a fake termination letter as discussed
              below, the
              ensuing litigation with USOil Corporation may ultimately determine
              any amounts
              at all to be paid pursuant to the original terms of the Farmout Agreement.
              While
              in Guinea, the Vice President and CEO also hired a new in-country general
              manager to facilitate consistent daily communication with the Government.
              On
              June 27, 2005, SCS made a request for a drilling permit to the Guinea
              Government
              through its USOil contact. On July 12, 2005, USOil claimed that the
              Guinea
              Government had cancelled the Royalties and Production Sharing Agreement.
              We
              believe that the PSA is still in full force and effect because none
              of the terms
              regarding disputes with respect to any issues regarding the PSA, including
              proper procedures for termination of the PSA were followed whatsoever.
              The terms
              of the PSA regarding disputes and termination were literally ignored.
              Additionally, the purported termination letter did not specify the
              reason for
              termination and the letter was not signed by the Minister of the private
              office
              of the President of Guinea, or the President himself. Hyperdynamics
              hired
              Famourou Kourouma as its new Vice President for Guinea Affairs in
              August.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
              Famourou
              Kourouma</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
              and CEO
              Kent Watts traveled to Guinea. They have determined from direct meetings
              with
              the Ministre Secretaire General de la Presidence de la Republique de
              Guinee that
              the termination letter did not originate from his office. For the termination
              letter to be legitimate it would have had to be initiated by his office
              with his
              knowledge. The termination letter was a fake. The Government has represented
              that SCS will be allowed to resume work and the Ministre Secretaire
              General is
              working on this by order of his Excelence President Lansana Conte.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Note
              5 - Accounts Payable Seismic Data</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
              February 2003, SCS agreed to pay $650,000 to Offshore Seismic Surveys,
              Inc.
              (OSS), an offshore seismic company, for OSS agreeing to release GHRC
              from the
              $550,000 due to OSS for the Guinea seismic data. The additional $100,000
              was
              charged to expense in 2003. OSS maintains a lien on the ownership and
              sale of
              1,000 kilometers of the seismic data acquired in 2002, for the $650,000
              less any
              payments made on this amount. Any user license sales proceeds generated
              from
              user licenses of the 2002 acquired data shall first go to pay off the
              $650,000
              liability at a rate of 90 percent of gross user license sales proceeds
              for OSS
              and 10 percent for SCS until the $650,000 is paid in full. Any funding
              arrangement SCS enters into with respect to the Guinea PSA, whereby
              all rights
              and obligations under the PSA are transferred, shall cause the $650,000
              to
              become immediately due upon signing and funding of such agreement.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Note
              6 - Installment Notes Payable</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Installment
              notes payable consist of the following as of June 30, 2005 and
              2004:</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">F-11</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div>
              <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                  <tr>
                    <td align="left" valign="bottom" width="71%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2005</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2004</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Lease
                        payable in approximately 6 equal remaining monthly installments
                        of $1,693
                        including interest at 10% APR, and secured by electrical
                        equipment</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9,872</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,191</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Vendor
                        settlement payable in 9 equal remaining monthly installments
                        of $1,000
                        plus a balloon payment of $24,500 due May 1, 2006, no interest
                        and no
                        collateral</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">33,500</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">45,500</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Lease/Purchase
                        payable for acquisition of oil and gas operations center
                        with 5 equal
                        remaining monthly installments of $6,541 including interest
                        of 12% APR,
                        and secured by a metal building of approximately 7,000 sq.
                        ft. located on
                        about 7/10 of an acre of land</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">31,725</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Directors
                        and Officers Liability Insurance premium notes payable with
                        $20,994 down
                        and the balance in 9 monthly installments of $9,546 including
                        interest of
                        5.5% APR</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">104,970</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Equipment
                        floater finance agreement, payable in one remaining
                        installment</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">800</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Workman's
                        Compensation finance agreement payable with $10,117 down
                        and balance in 9
                        monthly installments of $4,826</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">49,786</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auto
                        insurance finance agreement payable with $6,185 down and
                        balance in 9
                        monthly installments of $1,276</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,097</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Insurance
                        premium notes payable in 8 variable monthly installments
                        beginning at
                        about $12,000 and declining per month, including interest
                        at 7.8%
                        APR</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">96,351</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subtotal</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">247,750</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">170,072</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Less
                        current portion</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(247,750</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(126,670</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Long-term
                        portion</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">43,372</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Note
              7 - Letter Of Credit</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hyperdynamics
              renewed its letter of credit for $65,445 with Frost Bank, and it now
              expires on
              October 31, 2005. The purpose of the letter of credit is to guarantee
              the lease
              payments on Hyperdynamics' office space. The letter of credit is guaranteed
              by a
              security interest in a certificate of deposit with Frost Bank that
              may not be
              redeemed until the letter of credit expires. There were no draws against
              this
              letter of credit as of June 30, 2005. The letter will not be renewed
              upon
              expiration and the funds will be free of restriction at that time.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Note
              8 - Mandatorily Redeemable Preferred Stock</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
              of
              June 30, 2004, 5.15 units consisting of 5.15 shares of SCS Series A
              Preferred
              Stock and warrants to purchase 257,500 shares of Hyperdynamics common
              stock at
              $.25 per share had been sold. The portion of the proceeds of these
              units that is
              allocable to the SCS preferred stock is $360,500 less $51,500 paid
              as a cost of
              offering leaving $309,000. The $51,500 was to be amortized until July
              1, 2005,
              the date on which the stock is redeemable at the stockholders' option.
              As of
              June 30, 2004, unamortized offering costs were $25,750. The proceeds
              were
              allocated $360,500 to the warrants and $154,500 to the Preferred Stock
              based on
              their relative fair market values. The warrants' fair market value
              was estimated
              using the Black-Scholes option pricing model. Variables used in the
              Black-Scholes option pricing model include (1) 3.0% risk-free interest
              rate, (2)
              expected warrant life is five years, the actual remaining life of the
              warrant,
              (3) expected volatility is the actual historical stock price fluctuation
              volatility and (4) zero expected dividends. The fair market value of
              the
              preferred stock was estimated as the discounted present value, using
              a discount
              rate of 30%, of the amount redeemable at the option of the holder,
              $150,000, on
              July 1, 2005, which is the first date that the preferred stock is redeemable
              at
              the holder's option. During the year ended June 30, 2005, Hyperdynamics
              retired
              5.15 units of SCS mandatorily redeemable preferred stock. Hyperdynamics
              offered
              payment of this obligation using Hyperdynamics common stock in lieu
              of cash, as
              provided by the original agreement. The investors received one share
              of
              Hyperdynamics common stock for each $1.91 of preferred stock outstanding.
              All
              investors accepted this offer as of March 31, 2005; a total of 269,634
              shares
              were issued to redeem the 5.15 units they owned. A loss of $76,847
              was recorded
              on the redemption.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Note
              9 - Income Taxes&#160;</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Income
              taxes are not due since Hyperdynamics has had losses since inception.
              Hyperdynamics has net operating loss carryforwards of approximately
              $12,911,000
              at June 30, 2005.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div align="center">
              <table cellpadding="0" cellspacing="0" id="ftable" width="60%">

                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="45%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Deferred
                        tax assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,389,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="45%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Less:
                        valuation allowance</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(4,389,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="45%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="45%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                        deferred taxes</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  </tr>

              </table>
            </div><br>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">F-12</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Internal
              Revenue Section 382 restricts the ability to use these carryforwards
              whenever an
              ownership change as defined occurs. Hyperdynamics incurred such an
              ownership
              change on January 14, 1998 and again on June 30, 2001, As a result
              of the first
              ownership change, Hyperdynamics' use of net operating losses as of
              January 14,
              1998 of $949,000 are restricted to $151,000 per year. The availability
              of losses
              from that date through June 30, 2001 of $3,313,000 are restricted to
              $784,000
              per year. Losses in fiscal 2002 and beyond are not restricted. The
              net operating
              loss carryforwards expire from 2011 to 2025.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Note
              10 - Preferred Stock</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series
              A
              Convertible Preferred Stock was issued in January 2000 for net proceeds
              of
              $2,604,190. The stated value is $1,000 per share and par value is $.001.
              It is
              convertible into Hyperdynamics' common stock at a price of the lower
              of the
              trading price when purchased at $5.25 or 80% of the current 5-day trading
              average. All or any of the stock may be converted at any time at the
              holder's
              option, and all shares outstanding as of January 30, 2002 were to be
              automatically converted. This Series is non-voting and pays dividends
              of 4%,
              payable at conversion in either cash or shares of common stock, at
              Hyperdynamics' option. 1,055 shares were converted to common in 2000
              and 2001.
              Hyperdynamics has not converted any of the Series A shares since fiscal
              2001
              because of claims filed in November 2001 in the lawsuit with the Series
              A
              shareholders. Since the outcome is not known and no conversion has
              been
              effected, Hyperdynamics has continued to accrue the dividend through
              September
              30, 2004. Management evaluated the accrual as of September 30, 2004,
              and
              considers the accrual at that date to be adequate to cover the liability,
              if
              any, pursuant to the lawsuit. As of June 30, 2004, $352,953 in dividends
              were
              accrued. Dividends of $19,445 have been accrued in 2005, resulting
              in total
              accrued Series A dividends of $372,398 as of June 30, 2005. 2,725 shares
              of
              Series B Convertible Preferred Stock were issued for the acquisition
              of SCS
              Corporation on May 31, 2001. The stated value is $1,000 per share and
              the par
              value is $.001. Each Series B share may vote 7,408 common shares for
              a total of
              20,186,800 votes. The shares are convertible to common stock at the
              lesser of
              $.135 or 50% of the current 5-day average trading price. Series B stockholders
              are entitled to a 4% cumulative dividend on the stated value, which
              is payable
              only upon conversion of the preferred stock. Dividends may be paid
              in stock or
              cash at Hyperdynamics' option. Dividends accrued on the Series B as
              of June 30,
              2004 were $163,500. In 2005 dividends of $81,750 were accrued for the
              first
              three quarters of 2005, resulting in accrued dividends as of March
              31, 2005 of
              $245,250. The Board of Directors approved the issuance of 87,715 shares
              of
              restricted common stock to pay the March 31, 2005 accrued Series B
              dividend.
              Dividends were accrued for the fourth quarter leaving a June 30, 2005
              balance of
              $27,250. Accrued dividends on Series A and Series B stock as of June
              30, 2005
              and 2004 totaled $399,648 and $516,453, respectively. If all Preferred
              Series A
              and B shares were converted as of June 30, 2005, total common shares
              outstanding
              would be approximately 66,225,000 shares.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Note
              11 - Common Stock</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
              the year ended June 30, 2004, Hyperdynamics issued 35,489 shares of
              common stock
              for accounts payable of $76,239. Between November 2003 and March 2004,
              private
              investors purchased 8,575,543 shares of common stock and 3,534,903
              warrants with
              an exercise price of $2.00 per share, expiring in second quarter of
              2006, for
              $6,532,014. Offering costs were $653,201, resulting in net proceeds
              of
              $5,878,813. Additionally, during the year ended June 30, 2004, Hyperdynamics
              issued 181,250 shares for services valued at $393,738. Hyperdynamics'
              Officers
              converted their convertible notes payable during the year ended June
              30, 2004,
              which at that time totaled $268,056 in principal and interest, at a
              price of
              $.168. This resulted in the issuance of 1,595,573 shares. Hyperdynamics
              delivered 1,227,764 shares issued pursuant to the notes payable on
              December&#160;31, 2003 and 367,809 shares, the balance of the shares issued
              pursuant to the notes payable, on January 14, 2004. During the year
              ended June
              30, 2004, 179,000 warrants were exercised for gross proceeds of $74,500;
              after
              offering costs of $7,250, net proceeds were $67,250. During the year
              ended June
              30, 2004, three Hyperdynamics Officers exercised 3,233,333 warrants
              with an
              exercise price of $.23 per share in a cashless exercise when Hyperdynamics
              stock
              fair market value was $2.99. 257,070 shares were deducted from the
              shares issued
              for taxes withheld of $24,976 and the exercise price of $743,667; thus
              the net
              exercise was 2,976,263 shares. Finally, during the year ended June&#160;30,
              2004, Hyperdynamics issued 32,328 shares to pay the first $75,000 installment
              on
              the purchase of HYD Resources Corporation. During the year ended June
              30, 2005,
              Hyperdynamics issued 25,372 shares of common stock for accounts payable
              of
              $63,212; 101,480 shares of common stock were issued for $281,250 note
              payable to
              pay off the purchase price of HYD Resources Corporation; 20,006 shares
              of common
              stock were issued for services totaling $48,010; 135,750 shares of
              common stock
              were issued for $342,050 of oil and gas properties; 269,634 shares
              of common
              stock were issued to redeem $849,347 worth of the SCS Series A preferred
              stock;
              and 87,715 shares of common stock were issued to pay $245,250 of Series
              B
              accrued dividends. Also during 2005, 321,500 shares were issued for
              warrant
              exercises totaling $167,625.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Note
              12 - Stock Options and Warrants</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hyperdynamics'
              Stock Option Plan provides for the grant of non-qualified options to
              Directors,
              employees and consultants, and opportunities for Directors, Officers,
              employees
              and consultants to make purchases of stock in Hyperdynamics. In addition,
              Hyperdynamics issues stock warrants from time to time to employees,
              consultants,
              stockholders and creditors as additional financial incentives. The
              plans and
              warrant issuances are administered by the Board of Directors, which&#160;has
              substantial discretion to determine which persons, amounts, time, price,
              exercise terms, and restrictions, if any. Options differ from warrants
              in that
              the options awards are immediately exercisable and are assignable.
              In contrast,
              warrants have employment termination restrictions, vesting periods
              and are
              non-transferable.</font></div><br>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">F-13</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
              2005, Hyperdynamics did not grant any compensatory warrants or options.
              In 2004
              and 2003 respectively, Hyperdynamics granted 2,360,000 and 150,000
              warrants to
              consultants. The compensation cost recognized for these warrants was
              $1,833,085,
              $1,517,922 and $85,014 for the years ended June 30, 2005, 2004 and
              2003,
              respectively, based on the Black-Scholes option pricing model. During
              2005, 2004
              and 2003, Hyperdynamics issued warrants to employees in the amounts
              of -0- and
              333,333 and 4,510,000 warrants, respectively. There were 800,000 warrants
              forfeited during the year ended 2003 due to termination of employment.
              The
              compensation cost recognized for these warrants was $265,721 for the
              year ended
              June 30, 2004 and $415,412 in 2003, based on the Black-Scholes option
              pricing
              model. In addition to shares issued to consultants and employees, investors
              purchased 3,732,403 warrants in conjunction with purchases of SCS preferred
              stock and Hyperdynamics common stock. The weighted average fair value
              of the
              stock options granted during 2005, 2004 and 2003, was $-0- and $1.31
              and $.32,
              respectively. Variables used in the Black-Scholes option pricing model
              include
              (1) risk-free interest rates ranging from 1% to 5%, depending on the
              grant dates
              and the expected lives of the options, (2) expected option life is
              the actual
              remaining life of the options as of the grant date, (3) expected volatility
              is
              the actual historical stock price fluctuation volatility and (4) zero
              expected
              dividends.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Summary
              information regarding options and warrants is as follows:</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div>
              <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                  <tr>
                    <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Options</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Weighted
                        Average Share Price</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Warrants</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Weighted
                        Average Share Price</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Outstanding
                        June 30, 2002</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">164,636</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.15</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,272,500</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.16</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Granted</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,906,463</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">.24</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exercised</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(573,821</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">.20</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expired</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(164,636</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.15</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(525,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.21</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cancelled
                        due to repricing</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(5,585,142</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">.48</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Forfeited</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(870,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">.28</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Outstanding,
                        June 30, 2003</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">N/A</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,625,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.16</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Granted</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,425,736</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.31</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exercised</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,412,333</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">.28</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expired</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(355,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">.83</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cancelled
                        due to repricing</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Forfeited</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Outstanding,
                        June 30, 2004</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">N/A</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,283,403</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.69</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Granted</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">250,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">.55</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exercised</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(321,350</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">.52</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expired
                        unused</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;&#160;
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(600,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6.50</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Outstanding,
                        June 30, 2005</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">N/A</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,611,903</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.27</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>

              </table>
            </div><br>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">F-14</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Warrants
              outstanding and exercisable as of June 30, 2005:</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
            <div align="left">
              <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                  <tr>
                    <td align="left" valign="bottom" width="24%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exercise
                        </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Price</strong></font></div>
                    </td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="23%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Outstanding
                        </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Number
                        of </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Shares</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="23%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Remaining
                        </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>life</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="23%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exercisable
                        </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Number
                        of </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Shares</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="24%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$.23</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">800,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2
                        years</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">800,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="24%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.25</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">175,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3
                        years</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">175,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="24%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.28</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1
                        years</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="24%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.50</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">100,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1
                        years</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">100,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="24%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.50</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,992,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2
                        years</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,392,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="24%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.00</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,534,903</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2
                        years</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,534,903</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="24%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,611,903</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: #cceeff thin solid;">
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="22%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,011,903</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Note
              13 - Segment Information</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Reportable
              segments</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hyperdynamics
              management has two reportable segments: SCS Corporation (&#8220;SCS&#8221;) and its
              Louisiana operations (&#8220;HYD&#8221;). SCS is engaged in oil and gas exploration
              activities pertaining to offshore Guinea, West Africa. Additionally,
              it provides
              seismic data transcription and management services to support its activities
              and
              to external customers. The seismic data work is performed in the USA.
              HYD is
              engaged in oil and gas exploration and production activities in Louisiana,
              USA;
              it also provides some oilfield services to external customers. Hyperdynamics
              evaluates performance based on profit or loss from operations. The
              reportable
              segments are managed by separate management teams who are evaluated
              based on
              their segment's performance.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
              following tables summarize certain balance sheet and income statement
              data about
              Hyperdynamics' reportable segments and corporate overhead for the years
              ended
              June&#160;30, 2005, 2004 and 2003:</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
              <div align="left">
                <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                    <tr>
                      <td align="left" valign="bottom" width="19%" style="border-bottom: black thin solid;">&#160;&#160;
</td>
                      <td width="2%" style="border-bottom: black thin solid;">&#160;&#160;
</td>
                      <td align="right" colspan="2" valign="bottom" width="18%" style="border-bottom: black thin solid;">&#160;
&#160;</td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;&#160;
</td>
                      <td align="right" colspan="2" valign="bottom" width="18%" style="border-bottom: black thin solid;">&#160;
&#160;</td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;&#160;
</td>
                      <td align="right" colspan="2" valign="bottom" width="18%" style="border-bottom: black thin solid;">&#160;
&#160;</td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;&#160;
</td>
                      <td align="right" colspan="2" valign="bottom" width="18%" style="border-bottom: black thin solid;">&#160;
&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    </tr>
                    <tr>
                      <td align="left" valign="bottom" width="19%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>As
                          of June 30, 2005</strong></font></div>
                      </td>
                      <td width="2%" style="border-bottom: black thin solid;">
                        <div>&#160;</div>
                      </td>
                      <td align="right" colspan="2" valign="bottom" width="18%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SCS</strong></font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                        <div>&#160;</div>
                      </td>
                      <td align="right" colspan="2" valign="bottom" width="18%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>HYD</strong></font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                        <div>&#160;</div>
                      </td>
                      <td align="right" colspan="2" valign="bottom" width="18%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Corporate</strong></font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                        <div>&#160;</div>
                      </td>
                      <td align="right" colspan="2" valign="bottom" width="18%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total</strong></font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    </tr>
                    <tr bgcolor="#cceeff">
                      <td align="left" valign="bottom" width="19%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Segment
                          assets</font></div>
                      </td>
                      <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="17%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,104,519</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="17%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">819,170</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="17%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">285,633</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="17%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,209,322</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    </tr>

                </table>
              </div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
              <div align="left">
                <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                    <tr>
                      <td align="left" valign="bottom" width="19%" style="border-bottom: black thin solid;">&#160;&#160;
</td>
                      <td width="2%" style="border-bottom: black thin solid;">&#160;&#160;
</td>
                      <td align="right" colspan="2" valign="bottom" width="18%" style="border-bottom: black thin solid;">&#160;
&#160;</td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;&#160;
</td>
                      <td align="right" colspan="2" valign="bottom" width="18%" style="border-bottom: black thin solid;">&#160;
&#160;</td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;&#160;
</td>
                      <td align="right" colspan="2" valign="bottom" width="18%" style="border-bottom: black thin solid;">&#160;
&#160;</td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;&#160;
</td>
                      <td align="right" colspan="2" valign="bottom" width="18%" style="border-bottom: black thin solid;">&#160;
&#160;&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    </tr>
                    <tr>
                      <td align="left" valign="bottom" width="19%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>As
                          of June 30, 2004</strong></font></div>
                      </td>
                      <td width="2%" style="border-bottom: black thin solid;">
                        <div>&#160;</div>
                      </td>
                      <td align="right" colspan="2" valign="bottom" width="18%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SCS</strong></font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                        <div>&#160;</div>
                      </td>
                      <td align="right" colspan="2" valign="bottom" width="18%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>HYD</strong></font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                        <div>&#160;</div>
                      </td>
                      <td align="right" colspan="2" valign="bottom" width="18%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Corporate</strong></font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">
                        <div>&#160;</div>
                      </td>
                      <td align="right" colspan="2" valign="bottom" width="18%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total</strong></font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    </tr>
                    <tr bgcolor="#cceeff">
                      <td align="left" valign="bottom" width="19%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Segment
                          assets</font></div>
                      </td>
                      <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="17%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,310,065</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="17%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">515,043</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="17%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,457,553</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="17%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,282,661</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    </tr>

                </table>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">
                <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="90%">

                    <tr>
                      <td align="left" valign="bottom" width="33%" style="border-bottom: medium none;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Year
                          ended June 30, 2005:</font></div>
                      </td>
                      <td width="2%" style="border-bottom: medium none;">&#160;</td>
                      <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                      <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;&#160;</td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                      <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;&#160;</td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                      <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                    </tr>
                    <tr>
                      <td align="left" valign="bottom" width="33%" style="border-bottom: #ffffff solid;">&#160;</td>
                      <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                      <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SCS</strong></font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                      <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>HYD</strong></font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                      <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Corporate</strong></font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                      <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Total</strong></font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                    </tr>
                    <tr bgcolor="#cceeff">
                      <td align="left" valign="bottom" width="33%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues
                          from external customers</font></div>
                      </td>
                      <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,140</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">169,259</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">300</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">172,699</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    </tr>
                    <tr bgcolor="white">
                      <td align="left" valign="bottom" width="33%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation,
                          depletion and amortization</font></div>
                      </td>
                      <td width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,499</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">77,370</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">18,791</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">124,660</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    </tr>
                    <tr bgcolor="#cceeff">
                      <td align="left" valign="bottom" width="33%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                          from operations</font></div>
                      </td>
                      <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(528,617</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,508,093</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,863,195</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(4,899,905</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                      </td>
                    </tr>
                    <tr bgcolor="white">
                      <td align="left" valign="bottom" width="33%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expenditures
                          for long-lived assets</font></div>
                      </td>
                      <td width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">888,630</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">958,092</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">16,708</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,863,430</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    </tr>

                </table>
              </div>
              <div>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">
                  <table cellpadding="0" cellspacing="0" id="ftable" width="90%">

                      <tr>
                        <td align="left" valign="bottom" width="33%" style="border-bottom: #ffffff solid;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Year
                            ended June 30, 2004:</font></div>
                        </td>
                        <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                        <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">&#160;
&#160;</td>
                        <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                        <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">&#160;
&#160;&#160;</td>
                        <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                        <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">&#160;
&#160;&#160;</td>
                        <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                        <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">&#160;
&#160;&#160;</td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                      </tr>
                      <tr bgcolor="#cceeff">
                        <td align="left" valign="bottom" width="33%" style="border-bottom: #cceeff;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues
                            from external customers</font></div>
                        </td>
                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                        </td>
                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">18,314</font></div>
                        </td>
                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                        </td>
                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9,974</font></div>
                        </td>
                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                        </td>
                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,056</font></div>
                        </td>
                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                        </td>
                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">38,344</font></div>
                        </td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      </tr>
                      <tr bgcolor="white">
                        <td align="left" valign="bottom" width="33%" style="border-bottom: white;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation,
                            depletion and amortization</font></div>
                        </td>
                        <td width="2%" style="border-bottom: white;">&#160;</td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">24,248</font></div>
                        </td>
                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">19,093</font></div>
                        </td>
                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,663</font></div>
                        </td>
                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">61,004</font></div>
                        </td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      </tr>
                      <tr bgcolor="#cceeff">
                        <td align="left" valign="bottom" width="33%" style="border-bottom: #cceeff;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                            from operations</font></div>
                        </td>
                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(407,622</font></div>
                        </td>
                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                        </td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(92,232</font></div>
                        </td>
                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                        </td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,617,060</font></div>
                        </td>
                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                        </td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,116,914</font></div>
                        </td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                        </td>
                      </tr>
                      <tr bgcolor="white">
                        <td align="left" valign="bottom" width="33%" style="border-bottom: white;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expenditures
                            for long-lived assets</font></div>
                        </td>
                        <td width="2%" style="border-bottom: white;">&#160;</td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,338,980</font></div>
                        </td>
                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">359,304</font></div>
                        </td>
                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,244</font></div>
                        </td>
                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,699,528</font></div>
                        </td>
                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      </tr>

                  </table>
                </div>
              </div>
              <div align="center">
                <table cellpadding="0" cellspacing="0" id="ftable" width="90%">

                    <tr>
                      <td align="left" valign="bottom" width="33%" style="border-bottom: #ffffff solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Year
                          ended June 30, 2003:</font></div>
                      </td>
                      <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                      <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">&#160;</td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                      <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">&#160;&#160;</td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                      <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">&#160;&#160;</td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                      <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">&#160;&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                    </tr>
                    <tr bgcolor="#cceeff">
                      <td align="left" valign="bottom" width="33%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues
                          from external customers</font></div>
                      </td>
                      <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">450,831</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,191</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                      </td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">468,022</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    </tr>
                    <tr bgcolor="white">
                      <td align="left" valign="bottom" width="33%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation,
                          depletion and amortization</font></div>
                      </td>
                      <td width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">365,081</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">515,919</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">881,000</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    </tr>
                    <tr bgcolor="#cceeff">
                      <td align="left" valign="bottom" width="33%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                          from operations</font></div>
                      </td>
                      <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(688,986</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,719,147</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,408,133</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                      </td>
                    </tr>
                    <tr bgcolor="white">
                      <td align="left" valign="bottom" width="33%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expenditures
                          for long-lived assets</font></div>
                      </td>
                      <td width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">63,115</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">927,691</font></div>
                      </td>
                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">990,806</font></div>
                      </td>
                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    </tr>

                </table>
              </div>
            </div>
            <div>&#160;</div>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">F-15</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Product
              and Service Information</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Year
              Ended June 30</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div align="center">
              <table cellpadding="0" cellspacing="0" id="ftable" width="80%">

                  <tr>
                    <td align="left" valign="bottom" width="37%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2005</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2004</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2003</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="37%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues
                        from:</font></div>
                    </td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="37%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;Seismic
                        data management</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,140</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">18,314</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">450,831</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="37%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;Computer
                        related sales</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">300</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,056</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,191</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="37%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;Oilfield
                        services</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">117,251</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9,974</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="37%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;Oil
                        and gas production</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">52,008</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-0-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="37%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="37%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Totals</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">172,699</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">38,344</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">468,022</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Geographical
              Information</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
              revenues currently derive from domestic sources. All long-lived assets
              are
              located in the USA, except for rights associated with the Guinea offshore
              territory.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Note
              14 - Commitments and Contingencies</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">From
              time
              to time, Hyperdynamics and its subsidiaries are involved in a number
              of routine
              business disputes that may occur in the ordinary course of business.
              Hyperdynamics is unable to predict the outcome of such matters when
              they arise.
              Other than disputes currently disclosed under litigation, the company
              is unaware
              of any other disputes that exist and does not believe that the ultimate
              resolution of such matters would have a material adverse effect on
              the financial
              statements of Hyperdynamics.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hyperdynamics
              leases its office space from AGP Westwood, LTD over a 10 year period.
              The
              company's rent under this lease has increased from $20,774 for months
              7-54, to
              $24,114 for months 55-120. The lease payments began on November 1,
              2000.
              Additional common area maintenance charges are assessed. At June 30,
              2005,
              future minimum payments are $289,364 per year in years 2006-2010, and
              $120,568
              in 2011. Rent expense for the years ended June 30, 2005, 2004 and 2003
              totaled
              $267,290, $274,214 and $268,040, respectively. Hyperdynamics has a
              termination
              option that may be exercised after 60 months of the lease. If the termination
              option is exercised, Hyperdynamics will be released from the lease
              after 69
              months. On May 5, 2005 the Company filed a lawsuit styled Hyperdynamics
              Corporation v. AGB Westwood L.P.; Cause No. 2005-30992; In the 165th
              Judicial
              District Court of Harris County, Texas. The Company alleges that AGB
              Westwood
              L.P. committed fraud and has breached the lease contract with Company.
              The
              Company intends to aggressively pursue damages for its claims and is
              looking to
              cancel the lease and move out in order to mitigate further damages.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
              addition, Hyperdynamics is involved in a dispute with its Series A
              Preferred
              Stock&#160;shareholders over conversion rights to common stock and whether
              monetary damages are due for various claims against the preferred shareholders.
              The economic effects of and the probable outcome of this contingency
              are not
              known.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hyperdynamics'
              subsidiary, SCS, has $350,000 remaining of a contingent note payable
              due to
              Seacon Computer Systems Inc., the former owners of SCS Corporation's
              assets.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
              mentioned above, should Hyperdynamics' subsidiary, SCS, continue under
              the 2002
              PSA, Hyperdynamics will owe USOil $1,600,000 if SCS procures third
              party funding
              for the Guinea project (see Note 4).</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hyperdynamics'
              subsidiary, SCS, has arrangements with one individual and one corporation
              to
              provide geological and geophysical services in exchange for Hyperdynamics
              common
              stock. This arrangement was temporarily put on hold beginning in July
              2005.
              Should SCS continue with the 2002 PSA or proceed with rights to explore
              and
              exploit the concession off the coast of Guinea, Hyperdynamics may be
              obligated
              under these agreements to issue 41,250 - 46,250 shares per quarter,
              depending
              upon the price of Hyperdynamics common stock, or it may, at the company's
              option
              renegotiate or cancel such agreements going forward in any
              respect.</font></div><br>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">F-16</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Note
              15 - Related Party Transactions</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Related
              party transactions include payments to the CEO's brother, Michael Watts,
              as
              follows: during the year ended June 30, 2004, Michael Watts, the CEO's
              brother,
              received payment of $699,951 cash to pay for offering costs on private
              subscription agreements and warrants exercised. Additional offering
              costs will
              also be paid on 3,732,403 warrants purchased by private investors should
              they be
              exercised in the future. If all of these warrants were exercised, Michael
              Watts
              would receive approximately $712,000 to pay these additional costs.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Additionally,
              1,200,000 warrants with an exercise price of $.50 per share were issued
              to a
              company of which Michael Watts is president for public relations/investor
              relations services. The warrants vest quarterly from January 2004 through
              December 2005 and expire July 18, 2007. As of June 30, 2005, 960,000
              of these
              warrants have vested. The value of the 1,200,000 warrants, as computed
              using the
              Black-Scholes model, was $2,256,592 of which $1,101,493 and $959,895
              was
              recognized in 2005 and 2004, respectively. The balance will be recognized
              in the
              fiscal year ended June 30, 2006, when they vest.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
              February 9, 2005 the Audit Committee of Hyperdynamics Corporation,
              acting under
              the Audit Committee Charter adopted by the Board of Directors on October
              18,
              2005, pre-approved a contract with Geoserve Marketing, an assumed name
              for
              Michael E. Watts, the brother of the Chief Executive Officer. The contract
              was
              executed by Trendsetter Production Company (a wholly owned subsidiary)
              with
              Geoserve Marketing. Under the Agreement Geoserve Marketing was to sell
              up to 49%
              of the working interest in certain oil and gas properties owned by
              Trendsetter.
              At $55,000 per point, this was to bring in gross revenues of $2,695,000
              once
              sold out. Geoserve Marketing was given the responsibilities to sell
              working
              interest on the company's oil and gas leases; obtain executed documents
              for such
              sales as required by the company; help prepare the marketing materials
              for
              working interest sales; obtain investor non-disclosure agreements and
              other
              representations from all prospective non-operators; obtain a check
              or wired
              funds from and signatures of non-operators on all pertinent operating
              agreement
              forms; pay expenses for working interest promotion including but not
              limited to
              any brokerage fees and referral fees. Trendsetter agreed to pay 20%
              of the
              proceeds to Geoserve Marketing in return for these services. On June
              30, 2005,
              the independent audit committee pre-approved an extension of the working
              interest sales contract through July&#160;30, 2005. As of June 30, 2005, 18.5%
              or $1,017,500 of a total of 49% working interest had been sold and
              Geoserve
              Marketing had been paid promotion fees of $203,500. On July 29, 2005,
              the audit
              committee pre-approved that Trendsetter Production Company may extend
              the term
              of the contract with Geoserve Marketing until a total of gross sales
              of
              $2,695,000 has occurred or it has been determined that HYDR is cash
              flowing, as
              a whole, or the company otherwise reaches a cash position net of current
              liabilities equal to at least $1,500,000 with projected cash surplus
              to last a
              minimum of one year based on current operations. As of September 8,
              2005, 32.5%
              or $1,787,500 had been sold and a total of $357,500 in promotion fees
              has been
              paid to Geoserve Marketing.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
              May 9,
              2005, Harry James Briers, Executive Vice President, requested and obtained
              pre-approval from the audit committee to rehire Mr. Jeremy Driver (son-in-law
              of
              Michael E. Watts, brother of the Chief Executive Officer), a past employee
              of
              Hyperdynamics Corporation, to work as General Manager for HYD Resources
              Corporation. Mr. Driver had just been honorably discharged from the
              United
              States Air Force with the rank of Lieutenant. Our Audit committee approved
              the
              request and Mr. Driver was hired by Mr. Briers at an initial salary
              of $45,000
              annually.</font></div><br>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">F-17</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Note
              16 - Subsequent Events</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
              July
              12, 2005, Hyperdynamics Corporation received a letter from USOil Corporation
              whereby they claimed that the royalties and production sharing agreement
              between
              them and Guinea had been terminated. Hyperdynamics immediately went
              to work to
              rectify the situation and initially took the position that the Royalties
              and
              Production Sharing Agreement was still in full force and effect since
              the
              contract was ignored with respect to events of default, remedies, notices,
              and
              cures of such defaults. On August 26, 2005, Hyperdynamics hired Famourou
              Kourouma as its new Vice President for Guinea Affairs in August. Both
              Mr.
              Kourouma and the Company's CEO, Kent Watts traveled to Guinea. They
              have
              determined from direct meetings with the Ministre Secretaire General
              de la
              Presidence de la Republique de Guinee that the termination letter did
              not
              originate from his office. For the termination letter to be legitimate
              it would
              have had to be initiated by his office with his knowledge. The termination
              letter was a fake. The Government has represented that SCS will be
              allowed to
              resume work and the Ministre Secretaire General is working on this
              by order of
              his Excelence President Lansana Conte. Mr. Kourouma remains working
              in Guinea at
              this time.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
              August
              12, 2005, Hyperdynamics closed a private financing transaction with
              Dutchess
              Private Equities Fund II, LP. The financing included a subscription
              for a
              $1,500,000 two (2) year debenture that was funded in the amount of
              $1,000,000
              upon closing and will fund $500,000 upon filing of a registration statement
              which is expected to be filed in October or November 2005. Upon effectiveness
              of
              the ensuing registration, Dutchess may elect to convert the payments
              coming due
              on the debenture at a stock price of the lesser of the fixed floor
              conversion
              price or $1 per share. Hyperdynamics may request another debenture
              with Dutchess
              for an additional $1,500,000 upon the effectiveness of the registration
              statement. Management believes that the registration statement will
              be effective
              within six months. However, since only the Securities and Exchange
              Commission
              can order a registration statement effective, it is not known for certain
              when
              or if the registration statement will become effective. Management
              believes that
              these financings will enable Hyperdynamics to fund its operating activities
              through June&#160;30, 2006.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hyperdynamics
              also executed an investment agreement with Dutchess and received a
              commitment
              from Dutchess to fund up to $20,000,000 in equity at 95% of the market
              price.
              The company and Dutchess agreed through a global amendment to limit
              the number
              of shares to register under financing to 8,400,000 shares without a
              shareholder
              vote. This insures the number of shares to be issued will not exceed
              20% of the
              outstanding common stock as is required by the rules of the American
              Stock
              Exchange. Thus, the amount ultimately raised by the financing will
              be determined
              strictly by the stock price at each point in time the equity line is
              used.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
              August
              31, 2005, Trendsetter Production Company (wholly owned by HYD Resources
              Corporation) signed a gas facilities contract with Tennessee Gas Pipeline
              Company. On September 1, 2005, a gas sales and purchase contract was
              signed with
              British Petroleum. The company is now installing the production facilities
              and
              metering equipment to allow it to begin selling its natural gas
              reserves.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><a name="PGBRK"/><a name="FTR"/><a name="GLFTR"><br></a>
              <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                <div id="FTR">
                  <div id="GLFTR" style="WIDTH: 100%" align="left">
                  </div>
                </div>
                <div id="PN" style="PAGE-BREAK-AFTER: always">
                  <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">F-18</font></div>
                  <div style="WIDTH: 100%; TEXT-ALIGN: center">
                    <hr style="COLOR: black" noshade size="2">
                  </div>
                </div>
                <div id="HDR">
                  <div id="GLHDR" style="WIDTH: 100%" align="right">
                  </div>
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYPERDYNAMICS
              CORPORATION</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
              Balance Sheets</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Unaudited)</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div>
              <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                  <tr>
                    <td align="left" valign="bottom" width="85%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
                        31,</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="85%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="85%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ASSETS</font></div>
                    </td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="85%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Current
                        Assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">161,063</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Restricted
                        certificate of deposit</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">75,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
                        receivable, net of allowance for doubtful accounts Of $31,242
                        and
                        $20,145</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">49,475</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
                        receivable - recovery from working interest, net of allowance
                        of doubtful
                        accounts of $201,784</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Inventory</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Prepaid
                        Expenses</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">85,681</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                        Current Assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,303</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                        Current Assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">372,522</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Property
                        and equipment, net of accumulated depreciation of $400,313
                        and
                        $314,171</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">527,746</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                        assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Oil
                        and gas properties, using full cost method of accounting</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proved
                        properties</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">786,084</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unproved
                        properties</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,133,609</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accumulated
                        depreciation, depletion, amortization &amp;impairment</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(117,913</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                      oil and gas properties</font></td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,801,780</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Deposits</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,680</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">TOTAL
                        ASSETS</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,704,728</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">LIABILITIES
                        AND STOCKHOLDERS' EQUITY</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Current
                        Liabilities</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Installment
                        notes payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">43,667</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Convertible
                        notes payable, net of discount of $504,573</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">135,427</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
                        payable and accrued expenses</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">896,942</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
                        payable seismic data</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">650,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Deferred
                        gain</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">983,107</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dividends
                        payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">372,398</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dividends
                        payable to related party</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">109,250</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                        Current Liabilities</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,190,791</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Deferred
                        rent</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">TOTAL
                        LIABILITIES</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,190,791</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Commitments
                        and contingencies</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stockholders'
                        equity</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Preferred
                        stock, par value $0.001; 20,000,000 shares authorized</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series
                        A - 1,945 shares issued and outstanding</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series
                        B - 2,725 shares issued and outstanding</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
                        stock, $.001 par value, 250,000,000 shares authorized, 45,563,620
                        and
                        42,168,410 shares issued and outstanding, respectively</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">45,564</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Additional
                        paid-in capital</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,074,758</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accumulated
                        deficit</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(25,606,390</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                        stockholders' equity</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,513,937</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                        Liabilities and Stockholders' Equity</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,704,728</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">FF-1</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYPERDYNAMICS
              CORPORATION</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
              Statements of Operations</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Unaudited)</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div>
              <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                  <tr>
                    <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="5" valign="bottom" width="26%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Three
                        Months Ended</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="5" valign="bottom" width="25%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Nine
                        Months Ended</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
                        31,</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
                        31, </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
                        31, </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
                        31,</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #ffffff thin solid;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2005</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2005</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,234</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,002</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">329,052</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">148,693</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operating
                        Expenses</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cost
                        of revenues</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">241,778</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">266,027</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,515,185</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">693,389</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Selling</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">26,748</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">199</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">64,098</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">General
                        and administration</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">816,255</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">777,829</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,422,264</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,575,668</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Bad
                        Debt expense</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">201,784</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">201,784</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Gain)
                        loss from retirement of assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,253</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,159</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                        on working interest buy back</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">361,193</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">361,193</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation,
                        depletion and amortization</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">158,859</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">24,377</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">231,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">80,602</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                        Operating Expenses</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,779,869</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,092,728</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,731,625</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,430,916</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">LOSS
                        FROM OPERATIONS</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,645,635</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,064,726</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(4,402,573</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,282,223</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                        Income (Expense)</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                        Income</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,995</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,995</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
                        income</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,679</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,438</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">16,461</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
                        expense</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,148,944</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(23,144</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,313,837</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(314,300</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NET
                        LOSS</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,792,584</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,084,191</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(5,711,977</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,580,062</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Preferred
                        dividend requirement</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(27,500</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(27,250</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(82,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(101,194</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                        loss chargeable to common shareholders</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,820,084</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,111,441</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(5,793,977</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,681,256</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Basic
                        and diluted loss per common share</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.06</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.03</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.14</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.09</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Weighted
                        average shares outstanding</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">43,880,008</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">41,839,128</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">42,468,964</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">41,498,372</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">FF-2</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYPERDYNAMICS
              CORPORATION</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consolidated
              Statements of Cash Flows</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Unaudited)</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div>
              <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                  <tr>
                    <td align="left" valign="bottom" width="71%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td colspan="5" valign="bottom" width="25%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Nine
                        Months</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="71%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td colspan="5" valign="bottom" width="25%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ended
                        March 31,</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2005</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="71%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="71%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                        flows from operating activities</font></div>
                    </td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                        loss</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(5,711,977</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,580,062</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Adjustments
                        to reconcile net loss to cash used by operating activities</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation
                        and amortization</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">231,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">80,602</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                        on disposal of assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,159
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                        on working interest buyback</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">361,193</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Options
                        and warrants expense</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">651,269</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,365,123
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
                        issued for services</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">153,206</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                        on retirement of mandatorily redeemable preferred stock</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">76,847
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accretion
                        of interest and amortization of offering costs of mandatorily
                        redeemable
                        preferred stock</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">231,750
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Bad
                        debt expense</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">201,784</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,694
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amortization
                        of debt discount</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,109,764</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Changes
                        in:</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
                        receivable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(29,840</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(33,296</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
                        receivable - recovery from working interest</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(201,784</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Inventory</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,637</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">16,239
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                        current assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">80,266</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">100,947
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Deposits
                        from customers</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,264</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Deferred
                        rent</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(134,696</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,182</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
                        payable and accrued expenses</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">352,744</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">71,482</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                        cash used in operating activities</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,933,434</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,645,597</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                        flows from investing activities</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Decrease
                        in restricted cash</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(9,555</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">129,750
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investment
                        in unproved property</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(385,347</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(914,455</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purchase
                        of equipment</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(62,741</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(160,530</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds
                        from disposal of assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,413
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Change
                        in deposits</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">19,632</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(280</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                        cash provided by (used in) investing activities</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(438,011</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(932,102</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                        flows from financing activities</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds
                        from sale of common stock and warrants</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">940,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">162,125</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds
                        from installment notes payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">78,177</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,201
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds
                        from convertible notes payable, net</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,980,872</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds
                        from sale on working interest, net</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">726,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">176,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Payments
                        on convertible notes payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(186,717</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Payments
                        on installment debt</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(265,272</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(122,119</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                        cash provided by financing activities</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,273,060</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">223,207
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                        increase (decrease) in cash</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(98,385</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,354,492</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                        at beginning of period</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">259,448</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,149,441
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                        at end of period</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">161,063</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">794,949</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; MARGIN-RIGHT: 0pt">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Supplemental
                        Information:</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; MARGIN-RIGHT: 0pt">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                        paid for interest</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">111,876</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,703</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; MARGIN-RIGHT: 0pt">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                        paid for income taxes</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; MARGIN-RIGHT: 0pt">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Non-cash
                        transactions</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Issuance
                        of common stock for accounts payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">42,086</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Geological
                        and geophysical work performed on unproved oil and gas properties
                        paid
                        with equity-based compensation</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">37,200</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">390,061
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series
                        B preferred shareholder quarterly dividends</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">82,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Discount
                        related to convertible debt</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,465,245</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
                        stock issued to retire mandatorily redeemable preferred stock
                        in
                        subsidiary</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">849,347</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>

              </table>
            </div><br>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">FF-3</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYPERDYNAMICS
              CORPORATION</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
              TO
              CONSOLIDATED FINANCIAL STATEMENTS</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Unaudited)</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div>
              <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                  <tr valign="top" style="line-height: 1.25;">
                    <td style="width: 36pt;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.</font></div>
                    </td>
                    <td>
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Basis
                        of Presentation</font></div>
                    </td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
              unaudited consolidated financial statements of Hyperdynamics Corporation
              ("Hyperdynamics") have been prepared in accordance with accounting
              principles
              generally accepted in the United States and the rules of the Securities
              and
              Exchange Commission ("SEC"), and should be read in conjunction with
              the audited
              financial statements and notes thereto contained in this registration
              statement.
              In the opinion of management, all adjustments, consisting of normal
              recurring
              adjustments, necessary for a fair presentation of financial position
              and the
              results of operations for the interim periods presented have been reflected
              herein. The results of operations for interim periods are not necessarily
              indicative of the results to be expected for the full year. Notes to
              the
              financial statements which would substantially duplicate the disclosures
              contained in the audited financial statements for the most recent fiscal
              year
              2005 as reported in this registration statement have been omitted.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div>
              <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                  <tr valign="top" style="line-height: 1.25;">
                    <td style="width: 36pt;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.</font></div>
                    </td>
                    <td>
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Convertible
                        Notes payable -</font></div>
                    </td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Convertible
              Note Payable</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
              August
              2005, Hyperdynamics closed a private financing convertible note payable
              with
              Dutchess Private Equities Fund II, LP (Dutchess). The proceeds from
              the
              transaction were received in two tranches. The first tranche of $1,000,000
              was
              received at closing and the second tranche of $500,000 was received
              upon the
              filing of a registration statement with the SEC. The registration statement
              was
              filed with the SEC in October 2005. Upon effectiveness of the registration
              statement, Dutchess may elect to receive loan payments in the form
              of stock at a
              conversion price based upon the prevailing market price of Hyperdynamics's
              common stock but in no event less than $1.00 per share. In conjunction
              with the
              transaction, Hyperdynamics issued a detachable warrant to Duchess to
              purchase
              500,000 shares of common stock at $1.00 per share. The relative fair
              value of
              the warrants was $304,631 and the intrinsic value of the conversion
              feature of
              the two tranches was $354,631. Effective February 9, 2006, Hyperdynamics
              has the
              option to enter into another debenture with Dutchess for an additional
              $1,500,000. During the quarter ending March 31, 2006 this note was
              converted
              into common stock.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Short
              Term Note Payable</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
              December 2005, Hyperdynamics issued 127,000 shares of stock with a
              market value
              of $240,030 and a non-interest bearing note to Dutchess in exchange
              for
              $640,000. Upon effectiveness of the aforementioned registration statement,
              Dutchess may elect to receive loan payments in the form of stock at
              a conversion
              price based upon the prevailing market price of Hyperdynamics's common
              stock.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hyperdynamics
              analyzed its convertible notes payable instruments for derivativeaccounting
              consideration under SFAS 133 and EITF 00-19. Hyperdynamics determinedthe
              conversion feature met the criteria for classification in stockholders'equity
              under SFAS 133 and EITF 00-19. Therefore, derivative accounting is
              notapplicable
              for the convertible instruments.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
              carrying value of the notes at</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
              31,
              2006 is as follows:</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div align="left">
              <table cellpadding="0" cellspacing="0" id="ftable" width="80%">

                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="65%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Face
                        value of notes payable</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,140,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="65%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Less:&#160;&#160;
                        discount related to warrants</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(304,631</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="65%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">discount
                        related to conversion feature</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,219,631</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="65%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">discount
                        related to financing costs</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(90,075</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="65%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">conversion
                        to common shares</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,500,000</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="65%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Add:&#160;&#160;
                        amortization of discount</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,109,764</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="65%" style="border-bottom: #cceeff solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Carrying
                        value of note at March 31, 2006</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black double;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">135,427</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">FF-4</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div>
              <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                  <tr valign="top" style="line-height: 1.25;">
                    <td style="width: 36pt;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.</font></div>
                    </td>
                    <td>
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Contingencies</font></div>
                    </td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">From
              time
              to time, Hyperdynamics is party to various legal proceedings in theordinary
              course of business or otherwise. The following is a description of
              thematerial
              legal proceedings involving Hyperdynamics commenced or pending duringthe
              three
              months ended March 31, 2006. In accordance with SFAS 5, "Accountingfor
              Contingencies," the company makes a provision for a liability when
              it isboth
              probable that a liability has been incurred and the amount of the loss
              canbe
              reasonably estimated. These provisions are reviewed at least quarterly
              andadjusted to reflect the impacts of negotiations, settlements, rulings,
              advice
              oflegal counsel, and other information and events pertaining to a particular
              case.Although Hyperdynamics believes it has adequate provisions for
              the
              followingmatters, litigation is inherently unpredictable and it is
              possible that
              cashflows or results of operations could be materially and adversely
              affected in
              anyparticular period by the unfavorable resolution or disposition of
              one or more
              ofthese contingencies.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">TRENDSETTER
              INVESTORS, LLC</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
              March
              8, 2006, Trendsetter Investors, LLC ("Trendsetter") filed a lawsuitagainst
              Hyperdynamics. Trendsetter purchased from Hyperdynamics workinginterests
              in
              certain domestic properties. Trendsetter seeks unspecifiedmonetary
              damages.
              Hyperdynamics has filed a motion todismiss, and the case is currently
              stayed by
              the court pending a ruling on thesemotions to dismiss.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hyperdynamics
              is considering counter claims against Trendsetter.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div>
              <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                  <tr valign="top" style="line-height: 1.25;">
                    <td style="width: 36pt;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.</font></div>
                    </td>
                    <td>
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
                        Based Compensation</font></div>
                    </td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
              January 1, 2006, Hyperdynamics adopted SFAS No. 123(R),
              "Share-BasedPayment"("SFAS 123(R)"). SFAS 123(R) replaced SFAS No.
              123 and
              supersedes APBOpinion No. 25. SFAS 123(R) requires all share-based
              payments to
              employees,including grants of employee stock options, to be recognized
              in the
              financialstatements based on their fair values. The pro forma disclosures
              previouslypermitted under SFAS 123 are no longer an alternative to
              financial
              statementrecognition. The consolidated financial statements for the
              three months
              endedMarch 31, 2006 and 2005 reflect the impact of adopting SFAS
              123(R).</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">FF-5</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div>
              <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                  <tr valign="top" style="line-height: 1.25;">
                    <td style="width: 36pt;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.</font></div>
                    </td>
                    <td>
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Segment
                        Information</font></div>
                    </td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Reportable
              segments</u></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hyperdynamics
              has two reportable segments: SCS Corporation ("SCS") and its Louisiana
              operations ("HYDR"). SCS is engaged in oil and gas exploration activities
              offshore Guinea, West Africa. Additionally, it provides seismic data
              transcription and management services to support its activities and
              to external
              customers. The seismic data work is performed in the USA. HYDR is engaged
              in oil
              and gas exploration and production activities in Louisiana, USA; it
              also
              provides oilfield services to external customers. Hyperdynamics evaluates
              performance based on profit or loss from operations. The reportable
              segments are
              managed by separate management teams who are evaluated based on their
              segment's
              performance.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
              following tables summarize certain balance sheet and income statement
              dataabout
              Hyperdynamics' reportable segments and corporate overhead for the threeand
              nine
              months ended March 31, 2006 and 2005:</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div>
              <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                  <tr>
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SCS</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYDR</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Corporate</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
                        of March 31, 2006:</font></div>
                    </td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Segment
                        assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,274,928</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,226,819</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">202,981</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,704,728</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Nine
                        months ended March 31, 2006</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues
                        from external customers</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">329,052</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">329,052
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation,
                        depletion and amortization</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21,739</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">192,217</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,044</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">231,000
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                        from operations</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(517,094</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,997,523</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,887,956</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(4,402,573</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expenditures
                        for long-lived assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">76,106</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">524,971</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,249</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">609,326
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Three
                        months ended March 31, 2006</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues
                        from external customers</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,234</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,234
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation,
                        depletion and amortization</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,019</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">142,808</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,032</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">158,859
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                        from operations</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(180,965</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(802,562</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(662,108</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,645,635</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expenditures
                        for long-lived assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,629</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">174,474</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,813</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">180,916
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
                        of March 31, 2005:</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Segment
                        assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,074,834</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,480,284</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">722,152</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,277,270
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Nine
                        months ended March 31, 2005</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues
                        from external customers</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,140</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">145,253</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">300</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">148,693
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation,
                        depletion and amortization</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21,270</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">45,643</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,689</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">80,602
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                        from operations</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(430,418</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(752,018</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,099,787</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,282,223</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expenditures
                        for long-lived assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">849,502</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">611,981</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,564</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,465,047
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Three
                        months ended March 31, 2005</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues
                        from external customers</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,002</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,002
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation,
                        depletion and amortization</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,243</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12,669</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,465</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">24,377
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                        from operations</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(112,903</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(329,705</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(622,118</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,064,726</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                    </td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expenditures
                        for long-lived assets</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">137,114</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">427,331</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">564,445
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Product
              and services information</u></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div>
              <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                  <tr>
                    <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td colspan="5" valign="bottom" width="26%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Quarter
                        Ended March 31,</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td colspan="5" valign="bottom" width="25%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Nine
                        Months Ended March 31,</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #ffffff solid;">&#160;</td>
                    <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2005</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2005</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr>
                    <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues
                        from:</font></div>
                    </td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Seismic
                        data management</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,140</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Computer-related
                        sales</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">300</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Oilfield
                        services</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">117,251
                        </font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Oil
                        and gas production</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,234</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,002</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">329,052</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,002</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">&#160;</td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="43%" style="border-bottom: white solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Totals</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,234</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,002</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">329,052</font></div>
                    </td>
                    <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">148,693</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">FF-6</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div>
              <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                  <tr valign="top" style="line-height: 1.25;">
                    <td style="width: 18pt;">&#160;</td>
                    <td style="width: 18pt;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.</font></div>
                    </td>
                    <td>
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subsequent
                        events</font></div>
                    </td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
              the forth quarter we made 5 puts on our equity line of credit for a
              total of
              $967,000. On June 23, 2006, the remaining amount available for us to
              draw down
              on the equity line of credit is $19,032,900. The equity line of credit
              expires
              in February 2009.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
              the forth quarter we repaid the outstanding balances on our convertible
              notes
              payable. The carrying value of these notes was $135,427 on March 31,
              2006.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
              June
              2006 we entered into a financing agreement with Cornell Capital Partners,
              LP.
              Under this agreement we will issue three 10% convertible debentures,
              with a face
              value of $2,000,000 each, for a total of $6,000,000. In June 2006 we
              issued the
              first debenture&#160;and we received net proceeds of $1,800,000. Later in June
              2006 we issued the second debenture and we received net proceeds of
              $1,820,000.
              We expect to issue the third debenture when the aforementioned Form
              S-1 is
              declared effective by the SEC. The debentures are to be repaid in monthly
              installments of $175,000 plus accrued interest. After the registration
              statement
              has been declared effective by the SEC, Cornell may elect to convert
              the monthly
              installment payments on the debentures into our common stock at a conversion
              price of $2.00 per share. In connection with the financing we issued
              warrants to
              Cornell to purchase 955,000 shares of our common stock at $2.50 per
              share,
              715,000 shares of our common stock at $3.50 per share and 430,000 shares
              of our
              common stock at $4.00 per share. The warrants expire in 2011.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">FF-7</font></div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
          </div>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FORM
            S-1</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PART
            II</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>INFORMATION
            NOT REQUIRED IN PROSPECTUS</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 45pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                      13.</strong></font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>OTHER
                      EXPENSES OF ISSUANCE AND
                      DISTRIBUTION</strong></font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
            offering expenses are estimated to be:</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
            <div align="center">
              <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="80%">

                  <tr>
                    <td align="left" valign="bottom" width="65%" style="border-bottom: medium none;">&#160;</td>
                    <td width="2%" style="border-bottom: medium none;">&#160;</td>
                    <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Amount
                        Paid or be Paid (1)</strong></font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="65%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SEC
                        registration fee</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,210.00</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="65%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="65%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Printing
                        and engraving cost</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,000.00</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="65%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Attorneys'
                        fees </font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">25,000.00</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="65%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounting
                        fees </font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,000.00</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="65%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Transfer
                        agent and registrar cost</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,000.00</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="65%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Edgar
                        service provider cost</font></div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,000.00</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="65%" style="border-bottom: white double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Miscellaneous</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,000.00</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                  </tr>
                  <tr bgcolor="#cceeff">
                    <td align="left" valign="bottom" width="65%" style="border-bottom: #cceeff;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                  </tr>
                  <tr bgcolor="white">
                    <td align="left" valign="bottom" width="65%" style="border-bottom: white double;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;Total</font></div>
                    </td>
                    <td width="2%" style="border-bottom: white solid;">&#160;</td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                    </td>
                    <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">42,210.00</font></div>
                    </td>
                    <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                  </tr>

              </table>
            </div>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)
            The
            amounts set forth are all estimates.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">_______________</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 45pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                      14.</strong></font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>INDEMNIFICATION
                      OF DIRECTORS AND OFFICERS</strong></font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
            Delaware General Corporation Law Code provides for indemnification as
            follows:</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 36pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#167;
                      145.</strong></font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Indemnification
                      of officers, directors, employees and agents;
                      insurance.</strong></font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)
            A
            corporation shall have power to indemnify any person who was or is a
            party or is
            threatened to be made a party to any threatened, pending or completed
            action,
            suit or proceeding, whether civil, criminal, administrative or investigative
            (other than an action by or in the right of the corporation) by reason
            of the
            fact that the person is or was a director, officer, employee or agent
            of the
            corporation, or is or was serving at the request of the corporation as
            a
            director, officer, employee or agent of another corporation, partnership,
            joint
            venture, trust or other enterprise, against expenses (including attorneys'
            fees), judgments, fines and amounts paid in settlement actually and reasonably
            incurred by the person in connection with such action, suit or proceeding
            if the
            person acted in good faith and in a manner the person reasonably believed
            to be
            in or not opposed to the best interests of the corporation, and, with
            respect to
            any criminal action or proceeding, had no reasonable cause to believe
            the
            person's conduct was unlawful. The termination of any action, suit or
            proceeding
            by judgment, order, settlement, conviction, or upon a plea of nolo contendere
            or
            its equivalent, shall not, of itself, create a presumption that the person
            did
            not act in good faith and in a manner which the person reasonably believed
            to be
            in or not opposed to the best interests of the corporation, and, with
            respect to
            any criminal action or proceeding, had reasonable cause to believe that
            the
            person's conduct was unlawful.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)
            A
            corporation shall have power to indemnify any person who was or is a
            party or is
            threatened to be made a party to any threatened, pending or completed
            action or
            suit by or in the right of the corporation to procure a judgment in its
            favor by
            reason of the fact that the person is or was a director, officer, employee
            or
            agent of the corporation, or is or was serving at the request of the
            corporation
            as a director, officer, employee or agent of another corporation, partnership,
            joint venture, trust or other enterprise against expenses (including
            attorneys'
            fees) actually and reasonably incurred by the person in connection with
            the
            defense or settlement of such action or suit if the person acted in good
            faith
            and in a manner the person reasonably believed to be in or not opposed
            to the
            best interests of the corporation and except that no indemnification
            shall be
            made in respect of any claim, issue or matter as to which such person
            shall have
            been adjudged to be liable to the corporation unless and only to the
            extent that
            the Court of Chancery or the court in which such action or suit was brought
            shall determine upon application that, despite the adjudication of liability
            but
            in view of all the circumstances of the case, such person is fairly and
            reasonably entitled to indemnity for such expenses which the Court of
            Chancery
            or such other court shall deem proper.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)
            To
            the extent that a present or former director or officer of a corporation
            has
            been successful on the merits or otherwise in defense of any action,
            suit or
            proceeding referred to in subsections (a) and (b) of this section, or
            in defense
            of any claim, issue or matter therein, such person shall be indemnified
            against
            expenses (including attorneys' fees) actually and reasonably incurred
            by such
            person in connection therewith.</font></div><br>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div id="GLFTR" style="WIDTH: 100%" align="left">
              </div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">65</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div><br>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)
            Any
            indemnification under subsections (a) and (b) of this section (unless
            ordered by
            a court) shall be made by the corporation only as authorized in the specific
            case upon a determination that indemnification of the present or former
            director, officer, employee or agent is proper in the circumstances because
            the
            person has met the applicable standard of conduct set forth in subsections
            (a)
            and (b) of this section. Such determination shall be made, with respect
            to a
            person who is a director or officer at the time of such determination,
            (1) by a
            majority vote of the directors who are not parties to such action, suit
            or
            proceeding, even though less than a quorum, or (2) by a committee of
            such
            directors designated by majority vote of such directors, even though
            less than a
            quorum, or (3) if there are no such directors, or if such directors so
            direct,
            by independent legal counsel in a written opinion, or (4) by the
            stockholders.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(e)
            Expenses (including attorneys' fees) incurred by an officer or director
            in
            defending any civil, criminal, administrative or investigative action,
            suit or
            proceeding may be paid by the corporation in advance of the final disposition
            of
            such action, suit or proceeding upon receipt of an undertaking by or
            on behalf
            of such director or officer to repay such amount if it shall ultimately
            be
            determined that such person is not entitled to be indemnified by the
            corporation
            as authorized in this section. Such expenses (including attorneys' fees)
            incurred by former directors and officers or other employees and agents
            may be
            so paid upon such terms and conditions, if any, as the corporation deems
            appropriate.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(f)
            The
            indemnification and advancement of expenses provided by, or granted pursuant
            to,
            the other subsections of this section shall not be deemed exclusive of
            any other
            rights to which those seeking indemnification or advancement of expenses
            may be
            entitled under any bylaw, agreement, vote of stockholders or disinterested
            directors or otherwise, both as to action in such person's official capacity
            and
            as to action in another capacity while holding such office.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(g)
            A
            corporation shall have power to purchase and maintain insurance on behalf
            of any
            person who is or was a director, officer, employee or agent of the corporation,
            or is or was serving at the request of the corporation as a director,
            officer,
            employee or agent of another corporation, partnership, joint venture,
            trust or
            other enterprise against any liability asserted against such person and
            incurred
            by such person in any such capacity, or arising out of such person's
            status as
            such, whether or not the corporation would have the power to indemnify
            such
            person against such liability under this section.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(h)
            For
            purposes of this section, references to &#8220;the corporation&#8221; shall include, in
            addition to the resulting corporation, any constituent corporation (including
            any constituent of a constituent) absorbed in a consolidation or merger
            which,
            if its separate existence had continued, would have had power and authority
            to
            indemnify its directors, officers, and employees or agents, so that any
            person
            who is or was a director, officer, employee or agent of such constituent
            corporation, or is or was serving at the request of such constituent
            corporation
            as a director, officer, employee or agent of another corporation, partnership,
            joint venture, trust or other enterprise, shall stand in the same position
            under
            this section with respect to the resulting or surviving corporation as
            such
            person would have with respect to such constituent corporation if its
            separate
            existence had continued.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(i)
            For
            purposes of this section, references to &#8220;other enterprises&#8221; shall include
            employee benefit plans; references to &#8220;fines&#8221; shall include any excise taxes
            assessed on a person with respect to any employee benefit plan; and references
            to &#8220;serving at the request of the corporation&#8221; shall include any service as a
            director, officer, employee or agent of the corporation which imposes
            duties on,
            or involves services by, such director, officer, employee or agent with
            respect
            to an employee benefit plan, its participants or beneficiaries; and a
            person who
            acted in good faith and in a manner such person reasonably believed to
            be in the
            interest of the participants and beneficiaries of an employee benefit
            plan shall
            be deemed to have acted in a manner &#8220;not opposed to the best interests of the
            corporation&#8221; as referred to in this section.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(j)
            The
            indemnification and advancement of expenses provided by, or granted pursuant
            to,
            this section shall, unless otherwise provided when authorized or ratified,
            continue as to a person who has ceased to be a director, officer, employee
            or
            agent and shall inure to the benefit of the heirs, executors and administrators
            of such a person.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(k)
            The
            Court of Chancery is hereby vested with exclusive jurisdiction to hear
            and
            determine all actions for advancement of expenses or indemnification
            brought
            under this section or under any bylaw, agreement, vote of stockholders
            or
            disinterested directors, or otherwise. The Court of Chancery may summarily
            determine a corporation's obligation to advance expenses (including attorneys'
            fees).</font></div><br>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div id="GLFTR" style="WIDTH: 100%" align="left">
              </div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">66</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div><br>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
            Bylaws provide for indemnification. Our Bylaws--ARTICLE IV, as
            follows:</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.
            &#160;INDEMNIFICATION. This corporation shall, to the maximum extent permitted
            from time to time under the law of the State of Delaware, indemnify and
            upon
            request shall advance expenses to any person who is or was a party or
            is
            threatened to be made a party to any threatened, pending or completed
            action,
            suit, proceeding or claim, whether civil, criminal, administrative or
            investigative, by reason of the fact that such person is or was or has
            agreed to
            be a director or officer of this corporation or any of its direct or
            indirect
            subsidiaries or while such a director or officer is or was serving at
            the
            request of this corporation as a director, officer, partner, trustee,
            employee
            or agent of any corporation, partnership, joint venture, trust or other
            enterprise, including service with respect to employee benefit plans,
            against
            expenses (including attorney's fees and expenses), judgments, fines,
            penalties
            and amounts paid in settlement incurred in connection with the investigation,
            preparation to defend or defense of such action, suit, proceeding or
            claim:
            provided, however, that the foregoing shall not require this corporation
            to
            indemnify or advance expenses to any person in connection with any action,
            suit,
            proceeding, claim or counterclaim initiated by or on behalf of such person.
            Such
            indemnification shall not be exclusive of other indemnification rights
            arising
            under any bylaws, agreement, vote of directors or stockholders or otherwise
            and
            shall inure to the benefit of the heirs and legal representatives of
            such
            person. Any person seeking indemnification under this Article IV shall
            be deemed
            to have met the standard of conduct required for such indemnification
            unless the
            contrary shall be established.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.
            &#160;INSURANCE. &#160;The corporation may purchase and maintain insurance on
            behalf of any person who is or was a director, officer, employee or agent
            of the
            corporation, or is or was serving at the request of the corporation as
            a
            director, officer, employee or agent of another corporation, partnership,
            joint
            venture, trust or other enterprise against any liability asserted against
            him
            and incurred by him in any such capacity, or arising out of his status
            as such,
            whether or not the corporation would have the power to indemnify him
            against
            such liability under the provisions of this Article IV of the
            by-laws.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.
            &#160;DEFINITIONS. &#160;For purposes of this Article IV, reference to the
&#8220;corporation&#8221; shall include, in addition to the resulting corporation, any
            constituent corporation (including any constituent of a constituent)
            absorbed in
            a consolidation or merger which, if its separate existence has continued,
            would
            have had power and authority to indemnify its directors, officers and
            employees
            or agents, so that any person who is or was a director, officer, employee
            or
            agent of such constituent corporation, or is or was serving at the request
            of
            such constituent corporation as a director, officer, employee or agent
            of
            another corporation, partnership, joint venture, trust or other enterprise,
            shall stand in the same position under the provisions of this Article
            IV with
            respect to the resulting or surviving corporation as he would have with
            respect
            to such constituent corporation if its separate existence had continued.
            For
            purposes of this Article IV, references to &#8220;other enterprises&#8221; shall include
            employee benefit plans; references to &#8220;fines&#8221; shall include any excise taxes
            assessed on a person with respect to any employee benefit plan; and references
            to &#8220;serving at the request of the corporation&#8221; shall include any service as a
            director, officer, employee or agent of the corporation which imposes
            duties on.
            or involves services by. such director, officer, employee, or agent with
            respect
            to an employee benefit plan, its participants, or beneficiaries; and
            a person
            who acted in good faith and in a manner he reasonably believed to be
            in the
            interest of the participants and beneficiaries of an employee benefit
            plan shall
            be deemed to have acted in a manner &#8220;not opposed to the best interests of the
            corporation&#8221; as referred to in this Article IV.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Insofar
            as indemnification for liabilities arising under the Securities Act of
            1933 may
            be permitted to directors, officers or persons controlling the registrant
            pursuant to the foregoing provisions, the registrant has been informed
            that in
            the opinion of the Securities and Exchange Commission such indemnification
            is
            against public policy as expressed in the Act and is therefore
            unenforceable.</font></div><br>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div id="GLFTR" style="WIDTH: 100%" align="left">
              </div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">67</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div><br>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 45pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                      15. </strong></font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>RECENT
                      SALES OF UNREGISTERED
                      SECURITIES</strong></font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
            the 3 year period&#160;ending June 23, 2006, we issued unregistered securities
            in transactions summarized below.&#160;In January-March 2004, we sold 7,376,090,
            shares of common stock to 84 investors for an aggregate of $5,664,614.
            These
            transactions were made in reliance upon exemptions from registration
            under
            Section 4(2) of the Securities Act. Each certificate issued for unregistered
            securities contained a legend stating that the securities have not been
            registered under the Securities Act and setting forth the restrictions
            on the
            transferability and the sale of the securities. No underwriter participated
            in,
            nor did we pay any commissions or fees to any underwriter, in these
            transactions. These transaction did not involve a public offering. The
            investors
            were knowledgeable about our operations and financial condition. The
            investors
            were accredited investors as defined in Regulation D and had knowledge
            and
            experience in financial and business matters that allowed them to evaluate
            the
            merits and risk of receipt of these securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            February-April 2004, we issued 125,000 shares of common stock to one
            vendor for
            services rendered. We valued these transactions at $252,188. These transactions
            were made in reliance upon exemptions from registration under Section
            4(2) of
            the Securities Act. Each certificate issued for unregistered securities
            contained a legend stating that the securities have not been registered
            under
            the Securities Act and setting forth the restrictions on the transferability
            and
            the sale of the securities. No underwriter participated in, nor did we
            pay any
            commissions or fees to any underwriter, in these transactions. These
            transaction
            did not involve a public offering. The investors were knowledgeable about
            our
            operations and financial condition. The investors were accredited investors
            as
            defined in Regulation D and had knowledge and experience in financial
            and
            business matters that allowed them to evaluate the merits and risk of
            receipt of
            these securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            April
            2004, we issued 2,333,333 shares of common stock to employees upon cashless
            exercise of options. These transactions were made in reliance upon exemptions
            from registration under Section 4(2) of the Securities Act. Each certificate
            issued for unregistered securities contained a legend stating that the
            securities have not been registered under the Securities Act and setting
            forth
            the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were knowledgeable about our operations and financial
            condition. The investors were accredited investors as defined in Regulation
            D
            and had knowledge and experience in financial and business matters that
            allowed
            them to evaluate the merits and risk of receipt of these
            securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            April
            2004, we issued 32,328 shares of common stock to person upon the acquisition
            of
            assets. We valued these transaction at $93,750. These transactions were
            made in
            reliance upon exemptions from registration under Section 4(2) of the
            Securities
            Act. Each certificate issued for unregistered securities contained a
            legend
            stating that the securities have not been registered under the Securities
            Act
            and setting forth the restrictions on the transferability and the sale
            of the
            securities. No underwriter participated in, nor did we pay any commissions
            or
            fees to any underwriter, in these transactions. These transaction did
            not
            involve a public offering. The investors were knowledgeable about our
            operations
            and financial condition. The investors were accredited investors as defined
            in
            Regulation D and had knowledge and experience in financial and business
            matters
            that allowed them to evaluate the merits and risk of receipt of these
            securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            April-June 2004, we issued 70,822 shares of common stock to four vendors
            for
            services rendered. We valued these transactions at $182,789. These transactions
            were made in reliance upon exemptions from registration under Section
            4(2) of
            the Securities Act. Each certificate issued for unregistered securities
            contained a legend stating that the securities have not been registered
            under
            the Securities Act and setting forth the restrictions on the transferability
            and
            the sale of the securities. No underwriter participated in, nor did we
            pay any
            commissions or fees to any underwriter, in these transactions. These
            transaction
            did not involve a public offering. The investors were knowledgeable about
            our
            operations and financial condition. The investors were accredited investors
            as
            defined in Regulation D and had knowledge and experience in financial
            and
            business matters that allowed them to evaluate the merits and risk of
            receipt of
            these securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            April-June 2004, we issued 55,000 shares of common stock to two investors
            who
            exercised warrants for $15,000. These transactions were made in reliance
            upon
            exemptions from registration under Section 4(2) of the Securities Act.
            Each
            certificate issued for unregistered securities contained a legend stating
            that
            the securities have not been registered under the Securities Act and
            setting
            forth the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were knowledgeable about our operations and financial
            condition. The investors were accredited investors as defined in Regulation
            D
            and had knowledge and experience in financial and business matters that
            allowed
            them to evaluate the merits and risk of receipt of these
            securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            August-September 2004, we sold 22,50 shares of common stock to two investors
            for
            an aggregate of $8,125. These transactions were made in reliance upon
            exemptions
            from registration under Section 4(2) of the Securities Act. Each certificate
            issued for unregistered securities contained a legend stating that the
            securities have not been registered under the Securities Act and setting
            forth
            the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were knowledgeable about our operations and financial
            condition. The investors were accredited investors as defined in Regulation
            D
            and had knowledge and experience in financial and business matters that
            allowed
            them to evaluate the merits and risk of receipt of these
            securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            September 2004, we issued 46,250 shares of common stock to two vendors
            for
            services rendered. We valued these transaction at $99,750. These transactions
            were made in reliance upon exemptions from registration under Section
            4(2) of
            the Securities Act. Each certificate issued for unregistered securities
            contained a legend stating that the securities have not been registered
            under
            the Securities Act and setting forth the restrictions on the transferability
            and
            the sale of the securities. No underwriter participated in, nor did we
            pay any
            commissions or fees to any underwriter, in these transactions. These
            transaction
            did not involve a public offering. The investors were knowledgeable about
            our
            operations and financial condition. The investors were accredited investors
            as
            defined in Regulation D and had knowledge and experience in financial
            and
            business matters that allowed them to evaluate the merits and risk of
            receipt of
            these securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            December 2004, we issue 33,250 shares of common stock to two vendors
            for
            services rendered. We valued these transactions at $136,238. These transactions
            were made in reliance upon exemptions from registration under Section
            4(2) of
            the Securities Act. Each certificate issued for unregistered securities
            contained a legend stating that the securities have not been registered
            under
            the Securities Act and setting forth the restrictions on the transferability
            and
            the sale of the securities. No underwriter participated in, nor did we pay any
            commissions or fees to any underwriter, in these transactions. The investors
            were knowledgeable about our operations and financial condition. The
            investors
            were accredited investors as defined in Regulation D and had knowledge
            and
            experience in financial and business matters that allowed them to evaluate
            the
            merits and risk of receipt of these securities.</font></div><br>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div id="GLFTR" style="WIDTH: 100%" align="left">
              </div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">68</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div><br>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            October-November 2004, we sold 260,000 shares of common stock to two
            investors
            for an aggregate of $140,000. These transactions were made in reliance
            upon
            exemptions from registration under Section 4(2) of the Securities Act.
            Each
            certificate issued for unregistered securities contained a legend stating
            that
            the securities have not been registered under the Securities Act and
            setting
            forth the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were knowledgeable about our operations and financial
            condition. The investors were accredited investors as defined in Regulation
            D
            and had knowledge and experience in financial and business matters that
            allowed
            them to evaluate the merits and risk of receipt of these
            securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            March
            2005, we issued 101,480 shares of common stock to acquire assets from
            two
            persons. We valued these transactions at $281,250. These transactions
            were made
            in reliance upon exemptions from registration under Section 4(2) of the
            Securities Act. Each certificate issued for unregistered securities contained
            a
            legend stating that the securities have not been registered under the
            Securities
            Act and setting forth the restrictions on the transferability and the
            sale of
            the securities. No underwriter participated in, nor did we pay any commissions
            or fees to any underwriter, in these transactions. These transaction
            did not
            involve a public offering. The investors were knowledgeable about our
            operations
            and financial condition. The investors were accredited investors as defined
            in
            Regulation D and had knowledge and experience in financial and business
            matters
            that allowed them to evaluate the merits and risk of receipt of these
            securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            March
            2005, we sold 28,000 shares of common stock to two investors for an aggregate
            of
            $14,000. These transactions were made in reliance upon exemptions from
            registration under Section 4(2) of the Securities Act. Each certificate
            issued
            for unregistered securities contained a legend stating that the securities
            have
            not been registered under the Securities Act and setting forth the restrictions
            on the transferability and the sale of the securities. No underwriter
            participated in, nor did we pay any commissions or fees to any underwriter,
            in
            these transactions. These transaction did not involve a public offering.
            The
            investors were knowledgeable about our operations and financial condition.
            The
            investors were accredited investors as defined in Regulation D and had
            knowledge
            and experience in financial and business matters that allowed them to
            evaluate
            the merits and risk of receipt of these securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            January-March 2005, we issued 81,616 shares of common stock to 15 employees
            and
            vendors for services rendered. We valued these transactions at $191,044.
            These
            transactions were made in reliance upon exemptions from registration
            under
            Section 4(2) of the Securities Act. Each certificate issued for unregistered
            securities contained a legend stating that the securities have not been
            registered under the Securities Act and setting forth the restrictions
            on the
            transferability and the sale of the securities. No underwriter participated
            in,
            nor did we pay any commissions or fees to any underwriter, in these
            transactions. The investors were knowledgeable about our operations and
            financial condition. The investors were accredited investors as defined
            in
            Regulation D and had knowledge and experience in financial and business
            matters
            that allowed them to evaluate the merits and risk of receipt of these
            securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            May
            2005, we issued 87,715 shares of common stock to one investor as a dividends
            on
            preferred stock. These transactions were made in reliance upon exemptions
            from
            registration under Section 4(2) of the Securities Act. Each certificate
            issued
            for unregistered securities contained a legend stating that the securities
            have
            not been registered under the Securities Act and setting forth the restrictions
            on the transferability and the sale of the securities. No underwriter
            participated in, nor did we pay any commissions or fees to any underwriter,
            in
            these transactions. These transaction did not involve a public offering.
            The
            investors were knowledgeable about our operations and financial condition.
            The
            investors were accredited investors as defined in Regulation D and had
            knowledge
            and experience in financial and business matters that allowed them to
            evaluate
            the merits and risk of receipt of these securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            May
            2005, we issued 10,012 shares of common stock to one vendor for services
            rendered. We valued these transactions at $21,126. These transactions
            were made
            in reliance upon exemptions from registration under Section 4(2) of the
            Securities Act. Each certificate issued for unregistered securities contained
            a
            legend stating that the securities have not been registered under the
            Securities
            Act and setting forth the restrictions on the transferability and the
            sale of
            the securities. No underwriter participated in, nor did we pay any commissions
            or fees to any underwriter, in these transactions. These transaction
            did not
            involve a public offering. The investors were knowledgeable about our
            operations
            and financial condition. The investors were accredited investors as defined
            in
            Regulation D and had knowledge and experience in financial and business
            matters
            that allowed them to evaluate the merits and risk of receipt of these
            securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            June
            2005, we sold 11,000 shares of common stock to one investor for $5,500.
            These
            transactions were made in reliance upon exemptions from registration
            under
            Section 4(2) of the Securities Act. Each certificate issued for unregistered
            securities contained a legend stating that the securities have not been
            registered under the Securities Act and setting forth the restrictions
            on the
            transferability and the sale of the securities. No underwriter participated
            in,
            nor did we pay any commissions or fees to any underwriter, in these
            transactions. The investors were knowledgeable about our operations and
            financial condition. The investors were accredited investors as defined
            in
            Regulation D and had knowledge and experience in financial and business
            matters
            that allowed them to evaluate the merits and risk of receipt of these
            securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
            August 2005, we sold a convertible denture and a warrant to on investor
            who paid
            us the gross amount of $1 million when we signed the agreements and Dutchess
            paid us an additional $500,000 a short time later. The warrant has been
            exercised and the debenture has been converted. These transactions were
            made in
            reliance upon exemptions from registration under Section 4(2) of the
            Securities
            Act. Each certificate issued for unregistered securities contained a
            legend
            stating that the securities have not been registered under the Securities
            Act
            and setting forth the restrictions on the transferability and the sale
            of the
            securities. No underwriter participated in, nor did we pay any commissions
            or
            fees to any underwriter, in these transactions. These transaction did
            not
            involve a public offering. The investors were knowledgeable about our
            operations
            and financial condition. The investors were accredited investors as defined
            in
            Regulation D and had knowledge and experience in financial and business
            matters
            that allowed them to evaluate the merits and risk of receipt of these
            securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            June
            2003, we issued an aggregate of 150,000 options to one vendor for services
            rendered. These options had an exercise price of $0.50 per share with
            an&#160;expiration of June 2005. These transactions were made in reliance upon
            exemptions from registration under Section 4(2) of the Securities Act.
            Each
            certificate issued for unregistered securities contained a legend stating
            that
            the securities have not been registered under the Securities Act and
            setting
            forth the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were knowledgeable about our operations and financial
            condition. The investors were accredited investors as defined in Regulation
            D
            and had knowledge and experience in financial and business matters that
            allowed
            them to evaluate the merits and risk of receipt of these
            securities.</font></div><br>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div id="GLFTR" style="WIDTH: 100%" align="left">
              </div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">69</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div><br>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            July-December 2003, we issued an aggregate of 197,500 options to one
            vendor for
            services rendered. These options had an exercise price of $0.25 per share
            with a
            pro rata expiration of December 2008. These transactions were made in
            reliance
            upon exemptions from registration under Section 4(2) of the Securities
            Act. Each
            certificate issued for unregistered securities contained a legend stating
            that
            the securities have not been registered under the Securities Act and
            setting
            forth the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were knowledgeable about our operations and financial
            condition. The investors were accredited investors as defined in Regulation
            D
            and had knowledge and experience in financial and business matters that
            allowed
            them to evaluate the merits and risk of receipt of these
            securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            December 2003, we issued an aggregate of 2,000,000 options to five vendors
            for
            services rendered. These options had an exercise price of $0.50 per share
            with
            an expiration of June 2007. These transactions were made in reliance
            upon
            exemptions from registration under Section 4(2) of the Securities Act.
            Each
            certificate issued for unregistered securities contained a legend stating
            that
            the securities have not been registered under the Securities Act and
            setting
            forth the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were knowledgeable about our operations and financial
            condition. The investors were accredited investors as defined in Regulation
            D
            and had knowledge and experience in financial and business matters that
            allowed
            them to evaluate the merits and risk of receipt of these
            securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            October 2003- March 2004, we issued an aggregate of 3,534,903 to 102
            investors&#160;concurrent with purchase of common stock. These options had an
            exercise price of $2.00 per share with a expirations of October 2006-March
            2007.
            These transactions were made in reliance upon exemptions from registration
            under
            Section 4(2) of the Securities Act. Each certificate issued for unregistered
            securities contained a legend stating that the securities have not been
            registered under the Securities Act and setting forth the restrictions
            on the
            transferability and the sale of the securities. No underwriter participated
            in,
            nor did we pay any commissions or fees to any underwriter, in these
            transactions. These transaction did not involve a public offering. The
            investors
            were knowledgeable about our operations and financial condition. The
            investors
            were accredited investors as defined in Regulation D and had knowledge
            and
            experience in financial and business matters that allowed them to evaluate
            the
            merits and risk of receipt of these securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            August
            2005 we issued to one investor a convertible debenture that was convertible
            into
            1,500,000 shares, and a warrant to purchase 500,000 shares with an exercise
            price Of $1.00 per share. We received the aggregate amount of $1,500,000
            for
            these securities. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            December 2005 we issued to the same investor an option to purchase 127,000
            shares at an exercise price of $1.89 per share as partial consideration
            for a
            loan. </font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">These
            transactions were made in reliance upon exemptions from registration
            under
            Section 4(2) of the Securities Act. Each certificate issued for unregistered
            securities contained a legend stating that the securities have not been
            registered under the Securities Act and setting forth the restrictions
            on the
            transferability and the sale of the securities. No underwriter participated
            in,
            nor did we pay any commissions or fees to any underwriter, in these
            transactions. These transaction did not involve a public offering. The
            investors
            were knowledgeable about our operations and financial condition. The
            investors
            were accredited investors as defined in Regulation D and had knowledge
            and
            experience in financial and business matters that allowed them to evaluate
            the
            merits and risk of receipt of these securities. </font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            November 2005, we issued 30,000 shares of common stock to one vendor
            for
            services rendered. We valued this transaction at $52,200. These transactions
            were made in reliance upon exemptions from registration under Section
            4(2) of
            the Securities Act. Each certificate issued for unregistered securities
            contained a legend stating that the securities have not been registered
            under
            the Securities Act and setting forth the restrictions on the transferability
            and
            the sale of the securities. No underwriter participated in, nor did we
            pay any
            commissions or fees to any underwriter, in these transactions. These
            transaction
            did not involve a public offering. The investors were knowledgeable about
            our
            operations and financial condition. The investors were accredited investors
            as
            defined in Regulation D and had knowledge and experience in financial
            and
            business matters that allowed them to evaluate the merits and risk of
            receipt of
            these securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            November 2005, we issued 25,000 shares of common stock to one investor
            who
            exercised warrants for $12,500. These transactions were made in reliance
            upon
            exemptions from registration under Section 4(2) of the Securities Act.
            Each
            certificate issued for unregistered securities contained a legend stating
            that
            the securities have not been registered under the Securities Act and
            setting
            forth the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were knowledgeable about our operations and financial
            condition. The investors were accredited investors as defined in Regulation
            D
            and had knowledge and experience in financial and business matters that
            allowed
            them to evaluate the merits and risk of receipt of these
            securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            December 2005, we issued 127,000 shares of common stock to a lender in
            partial
            consideration of a loan to us of $500,000. These transactions were made
            in
            reliance upon exemptions from registration under Section 4(2) of the
            Securities
            Act. Each certificate issued for unregistered securities contained a
            legend
            stating that the securities have not been registered under the Securities
            Act
            and setting forth the restrictions on the transferability and the sale
            of the
            securities. No underwriter participated in, nor did we pay any commissions
            or
            fees to any underwriter, in these transactions. These transaction did
            not
            involve a public offering. The investors were knowledgeable about our
            operations
            and financial condition. The investors were accredited investors as defined
            in
            Regulation D and had knowledge and experience in financial and business
            matters
            that allowed them to evaluate the merits and risk of receipt of these
            securities.</font></div><br>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div id="GLFTR" style="WIDTH: 100%" align="left">
              </div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">70</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div><br>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            November 2005, we issued 24,351 shares of common stock to our directors
            as
            compensation. These transactions were made in reliance upon exemptions
            from
            registration under Section 4(2) of the Securities Act. Each certificate
            issued
            for unregistered securities contained a legend stating that the securities
            have
            not been registered under the Securities Act and setting forth the restrictions
            on the transferability and the sale of the securities. No underwriter
            participated in, nor did we pay any commissions or fees to any underwriter,
            in
            these transactions. These transaction did not involve a public offering.
            The
            investors were knowledgeable about our operations and financial condition.
            The
            investors had knowledge and experience in financial and business matters
            that
            allowed them to evaluate the merits and risk of receipt of these
            securities.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            January 2006, an investor exercised 25,000 options. The exercise price
            was
            $12,500. These transactions were made in reliance upon exemptions from
            registration under Section 4(2) of the Securities Act. Each certificate
            issued
            for unregistered securities contained a legend stating that the securities
            have
            not been registered under the Securities Act and setting forth the restrictions
            on the transferability and the sale of the securities. No underwriter
            participated in, nor did we pay any commissions or fees to any underwriter,
            in
            these transactions. These transaction did not involve a public offering.
            The
            investors were accredited investors as defined in Regulation D and had
            knowledge
            and experience in financial and business matters that allowed them to
            evaluate
            the merits and risk of receipt of these securities. The investors were
            knowledgeable about our operations and financial condition.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            November 2005, we issued 40,000 options to Seacon Computer Systems Inc.
            These
            options have an exercise price of $0.01 per share and expire in one year.
            These
            transactions were made in reliance upon exemptions from registration
            under
            Section 4(2) of the Securities Act. Each certificate issued for unregistered
            securities contained a legend stating that the securities have not been
            registered under the Securities Act and setting forth the restrictions
            on the
            transferability and the sale of the securities. No underwriter participated
            in,
            nor did we pay any commissions or fees to any underwriter, in these
            transactions. These transaction did not involve a public offering. The
            investors
            had knowledge and experience in financial and business matters that allowed
            them
            to evaluate the merits and risk of receipt of these securities. The investors
            were knowledgeable about our operations and financial condition.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            December 2005, we issued 10,000 options to one employee as compensation.
            These
            options have an exercise price of $1.55 per share and expire in two years.
            These
            transactions were made in reliance upon exemptions from registration
            under
            Section 4(2) of the Securities Act. Each certificate issued for unregistered
            securities contained a legend stating that the securities have not been
            registered under the Securities Act and setting forth the restrictions
            on the
            transferability and the sale of the securities. No underwriter participated
            in,
            nor did we pay any commissions or fees to any underwriter, in these
            transactions. These transaction did not involve a public offering. The
            investors
            had knowledge and experience in financial and business matters that allowed
            them
            to evaluate the merits and risk of receipt of these securities. The investors
            were knowledgeable about our operations and financial condition.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            December 2005, we issued 500,000 options to two employees as compensation.
            These
            options have an exercise prices from $1.00 per share to $1.55 per share
            and
            expire in two years. These transactions were made in reliance upon exemptions
            from registration under Section 4(2) of the Securities Act. Each certificate
            issued for unregistered securities contained a legend stating that the
            securities have not been registered under the Securities Act and setting
            forth
            the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors had knowledge and experience in financial and
            business
            matters that allowed them to evaluate the merits and risk of receipt
            of these
            securities. The investors were knowledgeable about our operations and
            financial
            condition.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            February March and April 2006, one investor exercised warrants with an
            exercise
            price of $0.50 per share to acquire 1,030,000 shares of common stock
            for an
            aggregate exercise price of $515,000. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
            issued
            these shares to the investor. These transactions were made in reliance
            upon
            exemptions from registration under Section 4(2) of the Securities Act.
            Each
            certificate issued for unregistered securities contained a legend stating
            that
            the securities have not been registered under the Securities Act and
            setting
            forth the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were accredited investors as defined in Regulation
            D and
            had knowledge and experience in financial and business matters that allowed
            them
            to evaluate the merits and risk of receipt of these securities. The investors
            were knowledgeable about our operations and financial
            condition.</font></div><br>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div id="GLFTR" style="WIDTH: 100%" align="left">
              </div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">71</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div><br>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            February 2006, one investor exercised warrants with an exercise price
            of $0.50
            per share to acquire 20,000 shares of common stock for an aggregate exercise
            price of $10,000. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
            issued
            these shares to the investor. These transactions were made in reliance
            upon
            exemptions from registration under Section 4(2) of the Securities Act.
            Each
            certificate issued for unregistered securities contained a legend stating
            that
            the securities have not been registered under the Securities Act and
            setting
            forth the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were accredited investors as defined in Regulation
            D and
            had knowledge and experience in financial and business matters that allowed
            them
            to evaluate the merits and risk of receipt of these securities. The investors
            were knowledgeable about our operations and financial condition.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            March
            2006, one investor exercised options to purchase 25,000 shares and we
            received
            $12,500 as consideration. These transactions were made in reliance upon
            exemptions from registration under Section 4(2) of the Securities Act.
            Each
            certificate issued for unregistered securities contained a legend stating
            that
            the securities have not been registered under the Securities Act and
            setting
            forth the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investor was an accredited investors as defined in Regulation
            D
            and had knowledge and experience in financial and business matters that
            allowed
            them to evaluate the merits and risk of receipt of these securities.
            The
            investor were knowledgeable about our operations and financial
            condition.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            December 2005 through June 2006, we issued 30,000 shares to one vendor
            as
            compensation for services rendered that we valued at approximately
            $125,000.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            February 2006, we issued an aggregate of 197,146 shares to buy back oil
            and gas
            working interests from owners. We valued these transactions at $2.39
            per share.
            These transactions were made in reliance upon exemptions from registration
            under
            Section 4(2) of the Securities Act. Each certificate issued for unregistered
            securities contained a legend stating that the securities have not been
            registered under the Securities Act and setting forth the restrictions
            on the
            transferability and the sale of the securities. No underwriter participated
            in,
            nor did we pay any commissions or fees to any underwriter, in these
            transactions. These transaction did not involve a public offering. The
            investors
            were accredited investors as defined in Regulation D and had knowledge
            and
            experience in financial and business matters that allowed them to evaluate
            the
            merits and risk of receipt of these securities. The investors were knowledgeable
            about our operations and financial condition.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            February 2006, we issued 300,000 shares of restricted common stock to
            investors
            upon the exercise of options. We received an aggregate of $150,000 in
            exercise
            proceeds. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">These
            transactions were made in reliance upon exemptions from registration
            under
            Section 4(2) of the Securities Act. Each certificate issued for unregistered
            securities contained a legend stating that the securities have not been
            registered under the Securities Act and setting forth the restrictions
            on the
            transferability and the sale of the securities. No underwriter participated
            in,
            nor did we pay any commissions or fees to any underwriter, in these
            transactions. These transaction did not involve a public offering. The
            investors
            were accredited investors as defined in Regulation D and had knowledge
            and
            experience in financial and business matters that allowed them to evaluate
            the
            merits and risk of receipt of these securities. The investors were knowledgeable
            about our operations and financial condition.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            June
            2006, one investor exercised options to purchase 25,000 shares of stock
            and paid
            us $12,500. These transactions were made in reliance upon exemptions
            from
            registration under Section 4(2) of the Securities Act. Each certificate
            issued
            for unregistered securities contained a legend stating that the securities
            have
            not been registered under the Securities Act and setting forth the restrictions
            on the transferability and the sale of the securities. No underwriter
            participated in, nor did we pay any commissions or fees to any underwriter,
            in
            these transactions. These transaction did not involve a public offering.
            The
            investor was an accredited investors as defined in Regulation D and had
            knowledge and experience in financial and business matters that allowed
            them to
            evaluate the merits and risk of receipt of these securities. The investor
            were
            knowledgeable about our operations and financial condition.</font></div><br>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div id="GLFTR" style="WIDTH: 100%" align="left">
              </div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">72</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div><br>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">June
            2006, we entered into a financing arrangement with </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cornell
            Capital Partners, LP</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
            whereby
            we received net amount of $1,800,000 by selling a convertible debenture
            to
            Cornell. The debenture has a fixed conversion price of $2.00 per share
            and
            matures in 2009. In connection with the Cornell transaction, we issued
            a total
            of 3 warrants expiring in 2011 Cornell as follows:</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 9pt;">&#160;</td>
                  <td style="width: 18pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">one
                      warrant to purchase 955,000 shares of common stock&#160;at an exercise
                      price of $2.50 per share</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 9pt;">&#160;</td>
                  <td style="width: 18pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">one
                      warrant to purchase 715,000 shares of common stock&#160;at an exercise
                      price of $3.50 per share</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 9pt;">&#160;</td>
                  <td style="width: 18pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">one
                      warrant to purchase 430,000 shares of common stock&#160;at an exercise
                      price of $4.00 per share. </font></div>
                  </td>
                </tr>

            </table>
          </div><br>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div id="GLFTR" style="WIDTH: 100%" align="left">
              </div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">73</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div><br>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 45pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ITEM
                      16.</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">EXHIBITS
                      AND FINANCIAL STATEMENT SCHEDULES</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(A)</font></div>
          <div align="left">
            <table cellpadding="0" cellspacing="0" width="100%">

                <tr>
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exhibit
                      </font></div>
                  </td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="10%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Number</font></div>
                  </td>
                  <td align="left" valign="top" width="90%" style="border-bottom: black thin solid;">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Description</font></div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.1</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Articles
                      of Incorporation as amended -- Incorporated by reference to
                      our Form
                      10-KSB/A filed May 16, 2005.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.2</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By-laws
                      as amended -- Incorporated by reference to our Form 10-KSB/A
                      filed May 16,
                      2005.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.1.1</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">First
                      Convertible Debenture&#8212;-Incorporated by reference to our Form 8-K filed
                      June 23, 2006.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><a href="ex4_12.htm">4.1.2</a></font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Second
                      Convertible Debenture&#8212;-</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Provided
                      herewith. </font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.2</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">First
                      Warrant&#8212;-Incorporated by reference to our Form 8-K filed June 23,
                      2006.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.3</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Second
                      Warrant&#8212;-Incorporated by reference to our Form 8-K filed June 23,
                      2006.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.4</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Third
                      Warrant&#8212;-Incorporated by reference to our Form 8-K filed June 23,
                      2006.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.5</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registration
                      Rights Agreement&#8212;-Incorporated by reference to our Form 8-K filed June 23,
                      2006.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.6</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
                      of Common Stock Certificate --&#160; Incorporated by reference to our Form
                      S-1 filed January 12, 2006 as amended.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.7</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
                      of Series A Preferred Stock Certificate -- Incorporated by
                      reference to
                      our Form SB-2 filed February 5, 2000.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.8</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
                      of Series B Preferred Stock Certificate -- Incorporated by
                      reference to
                      our Form 8-K filed June 15, 2001.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><a href="ex5_1.htm">5.1</a></font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Opinion
                      re: legality -- </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">provided
                      herewith.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Securities
                      Purchase Agreement&#8212;-Incorporated by reference to our Form 8-K filed June
                      23, 2006.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.2</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amendment
                      to the Securities Purchase Agreement&#8212;-Incorporated by reference to our
                      Form 8-K filed June 23, 2006.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.3</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Parent
                      Security Agreement&#8212;-Incorporated by reference to our Form 8-K filed June
                      23, 2006.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.4</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subsidiary
                      Security Agreement&#8212;-Incorporated by reference to our Form 8-K filed June
                      23, 2006.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.5</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Irrevocable
                      Transfer Agent Instructions&#8212;-Incorporated by reference to our Form 8-K
                      filed June 23, 2006.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.6</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investment
                      Agreement for equity line of credit-- </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Incorporated
                      by reference to our Form S-1 filed January 12, 2006 as
                      amended.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.7</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Employment
                      Agreement of Famourou Kourouma --&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Incorporated
                      by reference to our Form S-1 filed January 12, 2006 as
                      amended.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.8</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Employment
                      Agreement of Kent Watts -- Incorporated by reference to our
                      Form SB-2
                      filed February 25, 2000.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.9</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Production
                      Sharing Agreement (PSA) -- Incorporated by reference to our
                      Form 8-K filed
                      July 28, 2005.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.10</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Farmout
                      Agreement -- Incorporated by reference to our Form 8-K filed
                      December 20,
                      2002.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.11</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CFO
                      Agreement --&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Incorporated
                      by reference to our Form S-1 filed January 12, 2006 as
                      amended.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><a href="ex21_1.htm">21.1</a></font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subsidiaries
                      - Provided herewith. </font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div id="GLFTR" style="WIDTH: 100%" align="left">
              </div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">74</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div align="left">
            <table cellpadding="0" cellspacing="0" width="100%">

                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><a href="ex23_1.htm">23.1</a></font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consent
                      of Independent Registered Public Accounting Firm-- </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">provided
                      herewith.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">23.2</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consent
                      of Counsel (see Exhibit 5.1).</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.1</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Map
                      of Guinea lease --&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Incorporated
                      by reference to our Form S-1 filed January 12, 2006 as
                      amended.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.2</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Map
                      of Louisiana leases --&#160;Incorporated by reference to our Form S-1
                      filed January 12, 2006 as amended.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.3</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Letter
                      from government of Guinea in original French language --&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Incorporated
                      by reference to our Form S-1 filed January 12, 2006 as
                      amended.</font></div>
                  </td>
                </tr>
                <tr bgcolor="white">
                  <td align="left" valign="top" width="10%">&#160;</td>
                  <td align="left" valign="top" width="90%">&#160;</td>
                </tr>
                <tr bgcolor="#cceeff">
                  <td align="left" valign="top" width="10%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.4</font></div>
                  </td>
                  <td align="left" valign="top" width="90%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Letter
                      from government of Guinea translated into English --&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Incorporated
                      by reference to our Form S-1 filed January 12, 2006 as
                      amended.</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(B)</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FINANCIAL
            STATEMENT SCHEDULES</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
            financial statement schedules required by this item are set forth in
            the notes
            to our financial statements set forth on page 58 and F-1.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 45pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                      17.</strong></font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>UNDERTAKINGS</strong></font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
            undersigned registrant hereby undertakes:</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 36pt;">&#160;</td>
                  <td style="width: 18pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                      file, during any period in which offers or sales are being
                      made, a
                      post-effective amendment to this registration
                      statement:</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 72pt;">&#160;</td>
                  <td style="width: 18pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">i.</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                      include any prospectus required by section 10(a)(3) of the
                      Securities Act
                      of 1933;</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 72pt;">&#160;</td>
                  <td style="width: 18pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ii.&#160;</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                      reflect in the prospectus any facts or events arising after
                      the effective
                      date of the registration statement (or the most recent post-effective
                      amendment thereof) which, individually or in the aggregate,
                      represent a
                      fundamental change in the information set forth in the registration
                      statement. Notwithstanding the foregoing, any increase or decrease
                      in
                      volume of securities offered (if the total dollar value of
                      securities
                      offered would not exceed that which was registered) and any
                      deviation from
                      the low or high end of the estimated maximum offering range
                      may be
                      reflected in the form of prospectus filed with the Commission
                      pursuant to
                      Rule 424(b) if, in the aggregate, the changes in volume and
                      price
                      represent no more than 20% change in the maximum aggregate
                      offering price
                      set forth in the "Calculation of Registration Fee" table in
                      the effective
                      registration statement.</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 72pt;">&#160;</td>
                  <td style="width: 18pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">iii.</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                      include any material information with respect to the plan of
                      distribution
                      not previously disclosed in the registration statement or any
                      material
                      change to such information in the registration
                      statement;</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div>&#160;</div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 36pt;">&#160;</td>
                  <td style="width: 18pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">That,
                      for the purpose of determining any liability under the Securities
                      Act of
                      1933, each such post-effective amendment shall be deemed to
                      be a new
                      registration statement relating to the securities offered therein,
                      and the
                      offering of such securities at that time shall be deemed to
                      be the initial
                      bona fide offering thereof.</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 36pt;">&#160;</td>
                  <td style="width: 18pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
                      remove from registration by means of a post-effective amendment
                      any of the
                      securities being registered which remain unsold at the termination
                      of the
                      offering.</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div id="GLFTR" style="WIDTH: 100%" align="left">
              </div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">75</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 36pt;">&#160;</td>
                  <td style="width: 18pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">That,
                      for the purpose of determining any liability under the Securities
                      Act of
                      1933, each such post-effective amendment shall be deemed to
                      be a new
                      registration statement relating to the securities offered therein,
                      and the
                      offering of such securities at that time shall be deemed to
                      be the initial
                      bona fide offering thereof.</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 72pt;">&#160;</td>
                  <td style="width: 18pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">i.</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
                      the registrant is relying on Rule 430B (?230.430B of this
                      chapter):</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A.
            Each
            prospectus filed by the registrant pursuant to Rule 424(b)(3)shall be
            deemed to
            be part of the registration statement as of the date the filed prospectus
            was
            deemed part of and included in the registration statement; and</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">B.
            Each
            prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or
            (b)(7) as
            part of a registration statement in reliance on Rule 430B relating to
            an
            offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose
            of
            providing the information required by section 10(a) of the Securities
            Act of
            1933 shall be deemed to be part of and included in the registration statement
            as
            of the earlier of the date such form of prospectus is first used after
            effectiveness or the date of the first contract of sale of securities
            in the
            offering described in the prospectus. As provided in Rule 430B, for liability
            purposes of the issuer and any person that is at that date an underwriter,
            such
            date shall be deemed to be a new effective date of the registration statement
            relating to the securities in the registration statement to which that
            prospectus relates, and the offering of such securities at that time
            shall be
            deemed to be the initial bona fide offering thereof. Provided, however,
            that no
            statement made in a registration statement or prospectus that is part
            of the
            registration statement or made in a document incorporated or deemed incorporated
            by reference into the registration statement or prospectus that is part
            of the
            registration statement will, as to a purchaser with a time of contract
            of sale
            prior to such effective date, supersede or modify any statement that
            was made in
            the registration statement or prospectus that was part of the registration
            statement or made in any such document immediately prior to such effective
            date;
            or</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 72pt;">&#160;</td>
                  <td style="width: 18pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ii.</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
                      the registrant is subject to Rule 430C, each prospectus filed
                      pursuant to
                      Rule 424(b) as part of a registration statement relating to
                      an offering,
                      other than registration statements relying on Rule 430B or
                      other than
                      prospectuses filed in reliance on Rule 430A, shall be deemed
                      to be part of
                      and included in the registration statement as of the date it
                      is first used
                      after effectiveness. Provided, however, that no statement made
                      in a
                      registration statement or prospectus that is part of the registration
                      statement or made in a document incorporated or deemed incorporated
                      by
                      reference into the registration statement or prospectus that
                      is part of
                      the registration statement will, as to a purchaser with a time
                      of contract
                      of sale prior to such first use, supersede or modify any statement
                      that
                      was made in the registration statement or prospectus that was
                      part of the
                      registration statement or made in any such document immediately
                      prior to
                      such date of first use.</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 36pt;">&#160;</td>
                  <td style="width: 18pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">That,
                      for the purpose of determining liability of the registrant
                      under the
                      Securities Act of 1933 to any purchaser in the initial distribution
                      of the
                      securities:</font></div>
                  </td>
                </tr>

            </table>
          </div><br>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div id="GLFTR" style="WIDTH: 100%" align="left">
              </div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">76</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div><br>
          <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
            undersigned registrant undertakes that in a primary offering of securities
            of
            the undersigned registrant pursuant to this registration statement, regardless
            of the underwriting method used to sell the securities to the purchaser,
            if the
            securities are offered or sold to such purchaser by means of any of the
            following communications, the undersigned registrant will be a seller
            to the
            purchaser and will be considered to offer or sell such securities to
            such
            purchaser:</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">i.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
            preliminary prospectus or prospectus of the undersigned registrant relating
            to
            the offering required to be filed pursuant to Rule 424;</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ii.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
            free
            writing prospectus relating to the offering prepared by or on behalf
            of the
            undersigned registrant or used or referred to by the undersigned
            registrant;</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">iii.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
            portion of any other free writing prospectus relating to the offering
            containing
            material information about the undersigned registrant or its securities
            provided
            by or on behalf of the undersigned registrant; and</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">iv.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Any
            other
            communication that is an offer in the offering made by the undersigned
            registrant to the purchaser.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
            undersigned registrant hereby undertakes that:</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
            <div>
              <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                  <tr valign="top" style="line-height: 1.25;">
                    <td style="width: 36pt;">&#160;</td>
                    <td style="width: 18pt;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.</font></div>
                    </td>
                    <td>
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
                        purposes of determining any liability under the Securities
                        Act of 1933,
                        the information omitted from the form of prospectus filed
                        as part of this
                        registration statement in reliance upon Rule 430A and contained
                        in a form
                        of prospectus filed by the registrant pursuant to Rule 424(b)
                        (1) or (4)
                        or 497(h) under the Securities Act shall be deemed to be
                        part of this
                        registration statement as of the time it was declared
                        effective.</font></div>
                    </td>
                  </tr>

              </table>
            </div>
            <div>&#160;</div>
          </div>
          <div>
            <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                <tr valign="top" style="line-height: 1.25;">
                  <td style="width: 36pt;">&#160;</td>
                  <td style="width: 18pt;">
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.</font></div>
                  </td>
                  <td>
                    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
                      the purpose of determining any liability under the Securities
                      Act of 1933,
                      each post-effective amendment that contains a form of prospectus
                      shall be
                      deemed to be a new registration statement relating to the securities
                      offered therein, and the offering of such securities at that
                      time shall be
                      deemed to be the initial bona fide offering
                      thereof.</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
            undersigned registrant hereby undertakes to supplement the prospectus,
            after the
            expiration of the subscription period, to set forth the results of the
            subscription offer, the transactions by any underwriters during the subscription
            period, the amount of unsubscribed securities to be purchased by the
            underwriters, and the terms of any subsequent reoffering thereof. If
            any public
            offering by an underwriter is to be made on terms differing from those
            set forth
            on the cover page of the prospectus, a post-effective amendment will
            be filed to
            set forth the terms of such offering.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Insofar
            as indemnification for liabilities arising under the Securities Act of
            1933 may
            be permitted to directors, officers and controlling persons of the registrant
            pursuant to the foregoing provisions, or otherwise, the registrant has
            been
            advised that in the opinion of the Securities and Exchange Commission
            such
            indemnification is against public policy as expressed in the Act and
            is,
            therefore, unenforceable. In the event that a claim for indemnification
            against
            such liabilities (other than the payment by the registrant of expenses
            incurred
            or paid by a director, officer or controlling person of the registrant
            in the
            successful defense of any action, suit or proceeding) is asserted by
            such
            director, officer or controlling person in connection with the securities
            being
            registered, the registrant will, unless in the opinion of its counsel
            the matter
            has been settled by controlling precedent, submit to a court of appropriate
            jurisdiction the question whether such indemnification by it is against
            public
            policy as expressed in the Act and will be governed by the final adjudication
            of
            such issue.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
            <div id="FTR">
              <div id="GLFTR" style="WIDTH: 100%" align="left">
              </div>
            </div>
            <div id="PN" style="PAGE-BREAK-AFTER: always">
              <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">77</font></div>
              <div style="WIDTH: 100%; TEXT-ALIGN: center">
                <hr style="COLOR: black" noshade size="2">
              </div>
            </div>
            <div id="HDR">
              <div id="GLHDR" style="WIDTH: 100%" align="right">
              </div>
            </div>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SIGNATURES</strong></font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
            to the requirements of the Securities Act of 1933, the registrant has
            duly
            caused this registration statement on Form S-1 to be signed on its behalf
            by the
            undersigned, thereunto duly authorized in the City of Sugar Land, State
            of
            Texas, on&#160;June 30, 2006.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div align="left">
            <table cellpadding="0" cellspacing="0" width="100%">

                <tr>
                  <td align="left" valign="middle" width="40%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="middle" width="60%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HYPERDYNAMICS
                      CORPORATION</font></div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="middle" width="40%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="middle" width="60%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="middle" width="40%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">June
                      30, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></div>
                  </td>
                  <td align="left" valign="middle" width="60%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:
                      /s/ Kent Watts</font></div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="middle" width="40%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="middle" width="60%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Kent
                      Watts</font></div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="middle" width="40%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="middle" width="60%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chairman
                      of the Board,</font></div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="middle" width="40%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="middle" width="60%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director,</font></div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="middle" width="40%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="middle" width="60%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
                      Executive Officer</font></div>
                  </td>
                </tr>

            </table>
          </div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
            to the requirements of the Securities Act of 1933, this registration
            statement
            has been signed by the following persons in the capacities and on the
            dates
            indicated.</font></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
          <div align="left">
            <table cellpadding="0" cellspacing="0" width="100%">

                <tr>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
                      Kent Watts</font></div>
                  </td>
                  <td align="left" valign="top" width="34%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chairman
                      of the Board,</font></div>
                  </td>
                  <td align="left" valign="top" width="33%">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Kent
                      Watts&#160;&#160;&#160;</font></div>
                  </td>
                  <td align="left" valign="top" width="34%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director,
                      President Chief Executive Officer</font></div>
                  </td>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">June
                      30, 2006</font></div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="top" width="34%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
                      Harold A. Poling&#160;</font></div>
                  </td>
                  <td align="left" valign="top" width="34%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director</font></div>
                  </td>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">June
                      30, 2006</font></div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Harold
                      A. Poling&#160;</font></div>
                  </td>
                  <td align="left" valign="top" width="34%">&#160;</td>
                  <td align="left" valign="top" width="33%">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="top" width="34%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
                      Harry J. Briers</font></div>
                  </td>
                  <td align="left" valign="top" width="34%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director
                      and Executive Vice-president</font></div>
                  </td>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">June
                      30, 2006</font></div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Harry
                      J. Briers</font></div>
                  </td>
                  <td align="left" valign="top" width="34%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="top" width="34%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
                      Al Young</font></div>
                  </td>
                  <td align="left" valign="top" width="34%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director</font></div>
                  </td>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">June
                      30, 2006</font></div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Al
                      Young</font></div>
                  </td>
                  <td align="left" valign="top" width="34%">&#160;</td>
                  <td align="left" valign="top" width="33%">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="top" width="34%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
                      Steven M. Plumb</font></div>
                  </td>
                  <td align="left" valign="top" width="34%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
                      Financial Officer</font></div>
                  </td>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">June
                      30, 2006</font></div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Steven
                      M. Plumb</font></div>
                  </td>
                  <td align="left" valign="top" width="34%">&#160;</td>
                  <td align="left" valign="top" width="33%">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="33%">&#160;</td>
                  <td align="left" valign="top" width="34%">&#160;</td>
                  <td align="left" valign="top" width="33%">&#160;</td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
                      L. Gene Stohler&#160;</font></div>
                  </td>
                  <td align="left" valign="top" width="34%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director</font></div>
                  </td>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">June
                      30, 2006</font></div>
                  </td>
                </tr>
                <tr>
                  <td align="left" valign="top" width="33%">
                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">L.
                      Gene Stohler</font></div>
                  </td>
                  <td align="left" valign="top" width="34%">&#160;</td>
                  <td align="left" valign="top" width="33%">&#160;</td>
                </tr>

            </table>
          </div>
          <div>&#160;</div>
          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">78</font></div>
          <div>
            <hr style="COLOR: black" align="left" noshade size="2" width="100%">
          </div>
        </div>
      </div>
    </div>
  </body>
</html>
[{"type": "S-1", "sequence": "1", "filename": "forms1.htm", "description": "HYPERDYNAMICS S-1 6-29-2006", "secsgml_size_bytes": 2992937}]
{"company-data": {"conformed-name": "HYPERDYNAMICS CORP", "cik": "0000937136", "assigned-sic": "1311", "irs-number": "870400335", "state-of-incorporation": "DE", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-135510", "film-number": "06936770"}, "business-address": {"street1": "ONE SUGAR CREEK BLVD, #125", "city": "SUGAR LAND", "state": "TX", "zip": "77478", "phone": "7133539400"}, "mail-address": {"street1": "ONE SUGAR CREEK BLVD, #125", "city": "SUGAR LAND", "state": "TX", "zip": "77478"}, "former-company": {"former-conformed-name": "RAM-Z ENTERPRISES INC", "date-changed": "19950208"}}
Hyperdynamics S-1 6-29-2006
As filed with the Securities and
                  Exchange
                  Commission on June 30, 2006
Registration No.
                  ______________
United
        States
Securities
        and Exchange Commission
Washington,
        D.C. 20549
FORM
        S-1
Registration
        Statement
Under
        The
        Securities Act of 1933
HYPERDYNAMICS
        CORPORATION
(Exact
        name of small business issuer in its charter)
Delaware
1311
87-0400335
(State
                  or other jurisdiction of incorporation or organization)
(Primary
                  standard industrial code)
(I.R.S.
                  Employer Identification Number)
HYPERDYNAMICS
        CORPORATION
One
        Sugar
        Creek Blvd., #125
Sugar
        Land, Texas 77478
voice:
        (713) 353-9400        fax: (713)
        353-9421
(Address
        and telephone number of principal executive offices and principal place of
        business)
Kent
        Watts, CEO and President
One
        Sugar
        Creek Blvd., #125
Sugar
        Land, Texas 77478 voice: (713)
        353-9400        fax: (713)
        353-9421
(Name,
        address, including zip code, and telephone number, including area code, of
        agent
        for service)
With
        a
        Copy to:
Joel
        Seidner, Esq.
880
        Tully
        Road, Suite 50
Houston,
        Texas 77079
voice:
        (281) 493-1311         fax: (281)
667-3292
Approximate
        date of commencement of proposed sale to the public:
As
        soon
        as practicable after the effective date of this Registration
        Statement.
If
                  any of the securities being registered on this Form are to be offered
                  on a
                  delayed or continuous basis pursuant to Rule 415 under the Securities
                  Act
                  of 1933 check the following box.
x
If
                  this form is filed to register additional securities for an offering
                  pursuant to Rule 462(b) under the Securities Act, please check
                  the
                  following box and list the Securities Act registration statement
                  number of
                  the earlier effective registration statement for the same
                  offering.
o
If
                  this Form is a post-effective amendment filed pursuant to Rule
                  462(c)
                  under the Securities Act, check the following box and list the
                  Securities
                  Act registration statement number of the earlier effective registration
                  statement for the same offering.
o
If
                  this Form is a post-effective amendment filed pursuant to Rule
                  462(d)
                  under the Securities Act, check the following box and list the
                  Securities
                  Act registration statement number of the earlier effective registration
                  statement for the same offering.
o
1
CALCULATION
        OF REGISTRATION FEE
Title
                  of Each Class of Securities to be Registered
Amount
                  to be Registered (1) (2)
Proposed
                  Maximum Offering Price Per Share
Proposed
                  Maximum Aggregate Offering Price
Amount
                  of Registration Fee
Common
                  Stock par value $0.001 underlying warrants
2,100,000
                  shares
$
2.21
$
4,641,000.00
$
500.00
Common
                  Stock par value $0.001 underlying convertible debentures
3,000,000
                  shares
$
2.21
$
3,105,000.00
$
710.00
TOTAL
                  REGISTRATION FEE
$
1,210.00
2
(1)           The
        Proposed Maximum Offering Price Per Share was computed pursuant to Rule 457
        under the Securities Act of 1933, as amended (the "Securities Act") solely for
        the purpose of calculating the registration fee. This fee computation is
        based
        on the closing price of the common stock on the American Stock Exchange under
        the stock symbol "HDY" on June 23, 2006.
(2)
In
        accordance with Rule 416 promulgated under the Securities Act of 1933, this
        Registration Statement also registers an indeterminate number of shares of
        common stock to be offered pursuant to terms which provide for a change in
        the
        amount of securities being offered or issued to prevent dilution resulting
        from
        stock splits, stock dividends, or similar transactions.
THE
        REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
        AS
        MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
        A
        FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
        SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
        SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
        EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
        8(A),
        MAY DETERMINE.
THE
        INFORMATION IN THIS PROSPECTUS IS SUBJECT TO COMPLETION OR AMENDMENT. THE
        SECURITIES COVERED BY THIS PROSPECTUS CANNOT BE SOLD UNTIL THE REGISTRATION
        STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BECOMES EFFECTIVE.
        THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION
        OF AN
        OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE
        IN
        WHICH AN OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION
        OR
        QUALIFICATION UNDER THE SECURITIES LAWS OF THAT STATE.
3
FORM
        S-1
PART
        I
INFORMATION
        REQUIRED IN A PROSPECTUS
4
WE
        HAVE FILED A REGISTRATION STATEMENT RELATING TO THESE SECURITIES WITH THE
        SECURITIES AND EXCHANGE COMMISSION. WE WILL AMEND AND COMPLETE THE INFORMATION
        IN THIS PROSPECTUS. THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND
        MAY
        BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT
        FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS
        IS NOT AN OFFER TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING AN OFFER
        TO
        BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
        PERMITTED.
Subject
                  To Completion :  June 30,
                  2006
PROSPECTUS
HYPERDYNAMICS
        CORPORATION
One
        Sugar
        Creek Blvd., #125
Sugar
        Land, Texas 77478 voice: (713) 353-9400       fax:
        (713) 353-9421
5,100,000
        Shares of Common Stock
This
        prospectus relates to the sale of up to 5,100,000 shares of our common stock
        by
        the Selling Stockholders. We will not receive proceeds from the sale of our
        shares by the Selling Stockholders. However, we may receive proceeds of up
        to
$6,610,000
from
        the
        exercise of the warrants overlying some of the common stock only if
Cornell
        Capital Partners, LP
utilizes
        the cash method exercise.
Our common stock is traded on the American Stock Exchange under the trading
        symbol "HDY."
INVESTING
        IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CONSIDER
        CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 32 OF THIS PROSPECTUS BEFORE
        MAKING
        A DECISION TO PURCHASE OUR STOCK.
NEITHER
        THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION
        HAS
        APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
        ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
        OFFENSE.
The
        date
        of this Prospectus is _______________ , 2006
5
Dealer
        Prospectus Delivery Obligation
Until
        ______________, 2006, all dealers that effect transactions in these securities,
        whether or not participating in this offering, may be required to deliver
        a
        prospectus. This is in addition to the dealers' obligation to deliver a
        prospectus when acting as underwriters and with respect to their unsold
        allotments or subscriptions.
6
TABLE
        OF CONTENTS
Page
Available
                  Information
8
Prospectus
                  Summary
8
Risk
                  Factors
32
Information
                  About Forward-Looking Statements
37
Selected
                  Financial Data
37
Supplementary
                  Financial Information
39
Use
                  of Proceeds
41
Description
                  of Business
41
Description
                  of Property
45
Legal
                  Proceedings
47
Management's
                  Discussion and Analysis
49
Financial
                  Statements
58
                  and F-1
Market
                  Risk
58
Market
                  for Common Equity and Related Stockholder Matters
58
Directors,
                  Executive Officers, Promoters and Control Persons
58
Executive
                  Compensation
62
Security
                  Ownership of Certain Beneficial Owners and Management
63
Certain
                  Relationships and Related Transactions
66
Description
                  of Securities
68
Selling
                  Stockholders
68
Plan
                  of Distribution
69
Changes
                  In and Disagreements With Accountants on Accounting and Financial
                  Disclosure
70
Interest
                  of Named Experts and Counsel
70
Disclosure
                  of Commission Position on Indemnification for Securities Act
                  Liabilities
70
7
AVAILABLE
        INFORMATION
We
        are
        currently subject to the reporting requirements of the Securities Exchange
        Act
        of 1934, as amended (the "Exchange Act"). We file periodic reports, proxy
        materials and other information with the Securities and Exchange Commission
        (the
"Commission"). In addition, we will furnish stockholders with annual reports
        containing audited financial statements certified by our independent accountants
        and interim reports containing unaudited financial information as may be
        necessary or desirable. We will provide without charge to each person who
        receives a copy of this prospectus, upon written or oral request, a copy
        of any
        information that is incorporated by reference in this prospectus (not including
        exhibits to the information that is incorporated by reference unless the
        exhibits are themselves specifically incorporated by reference). Such request
        should be directed to: Kent Watts, Hyperdynamics Corporation, One Sugar Creek
        Blvd., #125, Sugar Land, Texas 77478, voice: (713) 353-9400, fax: (713)
        353-9421. Our Web site is www.hypd.com.
We
        provide free of charge on our Web site our annual report on Form 10-K, quarterly
        reports on Form 10-Q, current reports on Form 8-K, and amendments to those
        reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange
        Act as soon as reasonably practicable.
We
        have
        filed with the Commission a Registration Statement under the Securities Act
        of
        1933, as amended (the "Securities Act") with respect to the securities offered
        by this prospectus. This prospectus does not contain all of the information
        set
        forth in the Registration Statement, parts of which are omitted in accordance
        with the rules and regulations of the Commission. For further information
        with
        respect to us and this offering, reference is made to the Registration
        Statement, including its exhibits, that may be inspected without charge at
        the
        public reference room maintained by the Commission at 100 F Street N.E.,
        Washington , D.C. 20549, tel. 1-800-SEC-0330. Copies of such material may
        also
        be obtained from the Public Reference Section of the Commission at 100 F
        Street
        N.E., Washington , D.C. 20549.
The
        Web
        site of the Commission is www.sec.gov that contains reports, proxy and
        information statements and other information regarding issuers that file
        electronically with the Commission. Visitors to the Commission's Web site
        may
        access such information by searching the EDGAR database.
PROSPECTUS
        SUMMARY
About
        Hyperdynamics
Our
        growth is dependent on our attaining profit from our operations and our raising
        capital through the sale of stock or debt. There is no assurance that we
        will be
        able to operate at a profit or sell our stock or debt. Our stock is traded
        on
        the American Stock Exchange under the symbol "HDY." Our Web site is
        www.hypd.com. Our executive offices are located at Hyperdynamics
        Corporation, One Sugar Creek Blvd, #125, Sugar Land, Texas 77478, voice:
        (713) 353-9400, fax: (713) 353-9421. In this prospectus, we refer to ourselves
        and our subsidiaries as "Hyperdynamics," "HDY, "We," Us," "Our" and the
"Company."
We
        explore for and produce oil and gas. We are active in onshore exploration,
        drilling and production in Louisiana. We own farmout rights for approximately
        16,000,000 acres offshore Guinea upon which we have conducted extensive
        geophysical seismic testing and geochemical testing. We are presently
        negotiating a direct Production Sharing Agreement ("PSA") with Guinea for a new
        PSA for the same offshore acreage.
In
        June
        2006, we entered into a financing arrangement with
Cornell
        Capital Partners, LP
in the
        gross amount of $6,000,000 whereby we have already received the net amount
        of
        $1,800,000. We pay 9% of the proceeds of each of the three debentures to
        an
        affiliate of Cornell. We received an additional net amount of $1,820,000
        pursuant to the second debenture. When the registration statement is ordered
        effective by the Commission, we expect to receive another net amount of
        $1,820,000. Since only the Commission can order that a registration statement
        is
        effective, we cannot determine when or if the registration statement will
        be
        effective.
In
        connection with the Cornell transaction, we issued 2,100,000 warrants to
        Cornell. We
may
        receive proceeds of up to
$6,610,000
from
        the
        exercise of the warrants if Cornell utilizes the cash method
        exercise.
Impact
        of Cornell transaction on share price
.
        The
        Cornell transactions consist of 3 convertible debentures each maturing three
        years from each issue date and 3 warrants that Cornell purchased from us.
        The
        debentures have a fixed conversion price of $2.00 per share of our common stock.
If
        Cornell purchases all three debentures and subsequently converts the three
        debentures at the fixed conversion price of $2.00 per share of common stock,
        we
        will have issued an aggregate of 3,000,000 shares of common stock. If Cornell
        exercises all of the warrants, we will issue 2,100,000 shares of common stock.
The
        warrants expire in 2011 and are in three tranches consisting of:
(a)
one
                  warrant to purchase 955,000 shares of common stock at an exercise
                  price of $2.50 per share;
(b)
one
                  warrant to purchase 715,000 shares of common stock at an exercise
                  price of $3.50 per share; and
(c)
one
                  warrant to purchase 430,000 shares of common stock at an exercise
                  price of $4.00 per share.
If
        Cornell converts all of the debentures and exercises all of the warrants,
        we
        will issue an aggregate of 5,100,000 shares to Cornell.
The
        Agreements with Cornell.
8
On
        June
        22, 2006, a condition subsequent to an agreement signed on June 19, 2006
        occurred, allowing the financing transaction with Cornell to proceed. The
        condition subsequent was the approval of the transaction by the American
        Stock
        Exchange. We are sometimes called the "Obligor" or the "Company," and Cornell
        is
        sometimes called the "Holder" or the "Investor" or "Buyer," in the contracts
        described below.
The
        financing transaction is between us and Cornell Capital Partners, LP. Pursuant
        to the transaction we received the net cash amount of $1,800,000 from Cornell
        which is the net sale proceeds of the first debenture in the face amount
        of
        $2,000,000 less fees of 9% which we pay to an affiliate of Cornell.
We
        received an additional net amount of $1,820,000 pursuant to the second
        debenture.
We
        anticipate receiving further additional proceeds in the net amount of $1,820,000
        from yet another debenture upon the effectiveness of the registration statement.
        Each of the three convertible debentures has a face amount of $2,000,000.
        Each
        convertible debenture is convertible into our common stock at a fixed price
        of
        $2.00 per share. If Cornell ultimately converts all three debentures in full,
        we
        will have issued an aggregate of 3,000,000 shares of common stock to Cornell
        in
        connection with the conversion of the debentures. The registration statement
        will register the 3,000,000 shares of common stock underlying the convertible
        debentures. Until the debentures are fully repaid or converted into common
        stock, they bear interest at the rate of 10% per annum. The aggregate monthly
        cash repayment is $175,000 for all of the 3 debentures less offsets from
        conversion amounts.
As
        further consideration, we issued to Cornell three warrants to purchase an
        aggregate of 2,100,000 shares of our common stock. The registration statement
        will also register 2,100,000 shares of common stock underlying the warrants.
        The
        warrants expire on June 19, 2011. The terms of the three warrants are: (a)
        one
        warrant to purchase 955,000 shares of common stock at an exercise price of
        $2.50
        per share; (b) one warrant to purchase 715,000 shares of common stock at
        an
        exercise price of $3.50 per share; and (c) one warrant to purchase 430,000
        shares of common stock at an exercise price of $4.00 per share. If Cornell
        ultimately exercises all three warrants in full, then we will have issued
        2,100,000 shares of common stock to Cornell in connection with the warrants,
        and
        we will have received an additional $6,610,000 in cash proceeds from the
        warrant
        exercises.
We
        are
        filing this registration statement to register 5,100,000 shares of common
        stock
        (3,000,000 shares underlying the debentures and 2,100,000 shares underlying
        the
        warrants). Since only the Commission can order a Form S-1 effective, we do
        not
        know when or if the Form S-1 will become effective. The Form S-1 will register
        the number of shares of common stock underlying the convertible debentures
        and
        the warrants.
The
        debentures have customary default, notice and cure provisions. If we default,
        receive notice from Cornell and fail to cure the default during the allotted
        time for cure (which varies depending on the type of default), then the
        conversion price of the debentures will become variable depending on our
        stock
        price at the time of conversion (a so called "market" conversion price, or
        a so
        called "future price" conversion price). If an uncured default occurs, we
        may
        have to issue more shares than the number of shares in the Form S-1 and in
        such
        a case we would have to file a new Form S-1. Pursuant to the rules of the
        American Stock Exchange, we cannot issue more that 9,215,406 shares of common
        stock in this transaction with Cornell unless we obtain shareholder
        approval.
The
        Agreements with Cornell:
1.
THE
                  FIRST DEBENTURE
.
We
        sold
        the first convertible debenture to Cornell at the first closing which occurred
        on June 22, 2006. Pursuant to the terms of the first convertible debenture,
        we
        promise to pay to Cornell or its successors and assigns the principal sum
        of
        $2,000,000 together with accrued but unpaid interest on or before June 19,
        2009
        (the "Maturity Date"). Interest accrues on the outstanding principal balance
        at
        the annual rate of 10%. Interest is calculated on the basis of a 365-day
        year
        and the actual number of days elapsed. Interest is to be paid to Cornell
        or its
        assignee. We will make monthly scheduled payments ("Scheduled Payments")
        on the
        Debenture and all other debentures issued in connection with the Securities
        Purchase Agreement consisting of a total of $175,000 of principal plus accrued
        and unpaid interest, commencing with the first Scheduled Payment which shall
        be
        due and payable on the earlier of (a) September 1, 2006 or (b) three days
        after
        the date that the Registration Statement is declared effective and continuing
        on
        the first business day of each calendar month until paid in full. The Debenture
        shall become due and immediately payable, including all accrued but unpaid
        interest, upon an Event of Default. If the Holder converts a portion of the
        principal amount outstanding under this Debenture or any other debenture
        issued
        in connection with the Securities Purchase Agreement prior to a Scheduled
        Payment due date, the Obligor shall be entitled to an off-set of the amount
        due
        pursuant to such Schedule Payment equal to the amount converted (the "Off-Set
        Amount"). In such event we are still obligated to make a Scheduled Payment
        reduced by the Off-Set Amount. At our option we have the right to redeem
        a
        portion or all amounts outstanding under this Debenture prior to the Maturity
        Date, which are not otherwise due pursuant to a Scheduled Payment, provided
        that
        the Closing Bid Price of the of the our Common Stock is less than $2.00 at
        the
        time of the Redemption Notice. We will pay an amount equal to the principal
        amount being redeemed plus a redemption premium ("Redemption Premium") equal
        to
        twenty percent (20%) of the principal amount being redeemed, and accrued
        interest, (collectively referred to as the "Redemption Amount"). In order
        to
        make a redemption, we must first provide written notice to Cornell. After
        receipt of the Redemption Notice, Cornell will have three business days to
        elect
        to convert all or any portion of this Debenture.
9
The
        Debenture is secured by a Security Agreement dated June 19, 2006 between
        the
        Holder and Trendsetters Production Company the "Security Agreement") and
        a
        Subsidiary Security Agreement dated June 19, 2006.
An
        "Event
        of Default" means any one of the following events:
(i)
Any
        default in the payment of the principal of, interest on or other charges
        in
        respect of this Debenture, free of any claim of subordination (whether on
        a
        Scheduled Payment due date, a Conversion Date or the Maturity Date or by
        acceleration or otherwise), which is not cured within three (3) business
        days of
        notice of such breach;
(ii)
The
        Obligor or any material subsidiary of the Obligor shall commence, or there
        shall
        be commenced against the Obligor or any material subsidiary of the Obligor
        under
        any applicable bankruptcy or insolvency laws as now or later in effect or
        any
        successor, or the Obligor or any material subsidiary of the Obligor commences
        any other proceeding under any reorganization, arrangement, adjustment of
        debt,
        relief of debtors, dissolution, insolvency or liquidation or similar law
        of any
        jurisdiction whether now or later in effect relating to the Obligor or any
        material subsidiary of the Obligor or there is commenced against the Obligor
        or
        any material subsidiary of the Obligor any such bankruptcy, insolvency or
        other
        proceeding which remains undismissed for a period of 61 days; or the Obligor
        or
        any material subsidiary of the Obligor is adjudicated insolvent or bankrupt;
        or
        any order of relief or other order approving any such case or proceeding
        is
        entered; or the Obligor or any material subsidiary of the Obligor suffers
        any
        appointment of any custodian, private or court appointed receiver or the
        like
        for it or any substantial part of its property which continues undischarged
        or
        unstayed for a period of sixty one (61) days; or the Obligor or any material
        subsidiary of the Obligor makes a general assignment for the benefit of
        creditors; or the Obligor or any material subsidiary of the Obligor shall
        fail
        to pay, or shall state that it is unable to pay, or shall be unable to pay,
        its
        debts generally as they become due; or the Obligor or any material subsidiary
        of
        the Obligor shall call a meeting of its creditors with a view to arranging
        a
        composition, adjustment or restructuring of its debts; or the Obligor or
        any
        material subsidiary of the Obligor shall by any act or failure to act expressly
        indicate its consent to, approval of or acquiescence in any of the foregoing;
        or
        any corporate or other action is taken by the Obligor or any material subsidiary
        of the
Obligor
        for the purpose of effecting any of the foregoing. The term "material
        subsidiary" shall mean any subsidiary with total assets in excess of
        $100,000;
(iii)
The
        Obligor shall default in any of its obligations under any other debenture
        or any
        mortgage, credit agreement or other facility, indenture agreement, factoring
        agreement or other instrument under which there may be issued, or by which
        there
        may be secured or evidenced any indebtedness for borrowed money or money
        due
        under any long term leasing or factoring arrangement of the Obligor in an
        amount
        exceeding $500,000, whether such indebtedness now exists or shall later be
        created and such default shall result in such indebtedness becoming or being
        declared due and payable prior to the date on which it would otherwise become
        due and payable, except those being contested in good faith;
10
(iv)
The
        Common Stock shall cease to be quoted for trading or listing for trading
        on any
        of (a) the American Stock Exchange, (b) New York Stock Exchange, (c) the
        Nasdaq
        National Market, (d) the Nasdaq Capital Market, or (e) the Nasdaq OTC Bulletin
        Board ("OTC") (each, a "Subsequent Market") and shall not again be quoted
        or
        listed for trading on any Subsequent Market within five (5) Trading Days
        of such
        delisting;
(v)
The
        Obligor shall fail to file the Underlying Shares Registration Statement within
        the time periods set forth in the Investor Registration Rights Agreement
        ("Registration Rights Agreement") of even date herewith between the Obligor
        and
        the Holder, or the Underlying Shares Registration Statement shall not have
        been
        declared effective by the Commission within forty five (45) days of the
        Scheduled Effective Deadline as set forth in the Registration Rights Agreement,
        provided however, that a default shall not occur if a delay in the effectiveness
        is the result of the SEC commenting that a specific part of the Transaction
        Document is adverse to the SEC ordering effectiveness and the Obligor has
        used
        its best efforts to respond to, and resolve such comment, which shall be
        determined in the reasonable discretion of the Holder;
(vi)
If
        the
        effectiveness of the Underlying Shares Registration Statement lapses for
        any
        reason or the Holder shall not be permitted to resell the shares of Common
        Stock
        underlying this Debenture under the Underlying Shares Registration Statement,
        in
        either case, for more than ten (10) consecutive Trading Days or an aggregate
        of
        thirty (30) Trading Days (which need not be consecutive Trading
        Days);
(vii)
The
        Obligor shall fail for any reason to deliver Common Stock certificates to
        a
        Holder prior to the fifth (5th) Trading Day after a Conversion Date or the
        Obligor shall provide notice to the Holder, including by way of public
        announcement, at any time, of its intention not to comply with requests for
        conversions of this Debenture such breach is not cured within three (3) days
        of
        notice of such breach;
(viii)
The
        Obligor shall fail for any reason to deliver the payment in cash pursuant
        to a
        Buy-In within five (5) days after notice is claimed delivered;
(x)
The
        Obligor shall fail to observe or perform in any material respect any other
        covenant, agreement or warranty contained in, or otherwise commit any breach
        or
        default of any provision of this Debenture or any Transaction Document which
        is
        not cured within twenty (20) business days after the Obligor is provided
        with
        written notice from the Holder.
(b)
During
        the time that any portion of this Debenture is outstanding, if any Event
        of
        Default has occurred, the full principal amount of this Debenture, together
        with
        interest and other amounts owing to the date of acceleration shall become
        at the
        Holder's election, immediately due and payable in cash, provided however,
        the
        Holder may request (but shall have no obligation to request) payment of such
        amounts in Common Stock of the Obligor. In addition to any other remedies,
        the
        Holder shall have the right (but not the obligation) to convert this Debenture
        at any time after (x) an Event of Default or (y) the Maturity Date at the
        Conversion Price then in-effect (including, without limitation, the Default
        Conversion Price).
Conversion
        of Debenture
The
        Debenture shall be convertible into shares of Common Stock at the option
        of the
        Holder, in whole or in part at any time and from time to time, after the
        Original Issue Date. The number of shares of Common Stock issuable upon a
        conversion equals the quotient obtained by dividing (x) the outstanding amount
        of this Debenture to be converted by $2.00. The Obligor shall deliver Common
        Stock certificates to the Holder prior to the Fifth (5th) Trading Day after
        a
        Conversion Date.
Conversion
        Restrictions
11
A
        Holder
        may not convert this Debenture or receive shares of Common Stock as payment
        of
        interest to the extent such conversion or receipt of such interest payment
        would
        result in the Holder, together with any affiliate, beneficially owning in
        excess
        of 4.99% of the then issued and outstanding shares of Common Stock, including
        shares issuable upon conversion of, and payment of interest on, this Debenture
        held by such Holder.
The
        Total
        Transaction Shares shall not be greater than 9,215,406 shares (which does
        not
        exceed 19.99% of the 46,308,573 outstanding shares of Common Stock as of
        the
        date of the Securities Purchase Agreement), until the Obligor's shareholders
        approve (without the vote of any shares acquired in this transaction and
        related
        transactions) the issuance of the Total Transaction Shares. "Total Transaction
        Shares" shall mean, in the aggregate, any shares of Common Stock issued under
        (a) this Debenture to the Holder, or its affiliates, and transferees, subsequent
        transferees, or any other debenture issued pursuant to the Securities Purchase
        Agreement (b) the Warrant Shares (as defined in the Securities Purchase
        Agreement), and (c) any shares of Common Stock issued as Liquidated Damages
        (as
        defined in the Registration Rights Agreement).
Conversion
        Price and Adjustments to Conversion Price.
The
        conversion price (the "Fixed Conversion Price" or "Conversion Price") in
        effect
        on any Conversion Date shall be equal to $2.00, subject to anti-dilution
        adjustments.
1A.
THE
                  SECOND DEBENTURE
.
We
        sold
        the second debenture to Cornell before the filing of this registration
        statement.
The
        second debenture matures on June 28, 2009 and has the same terms as the first
        debenture.
1C.
THE
                  THIRD DEBENTURE
.
Pursuant
        to the Securities Purchase Agreement we will sell third debenture to Cornell
        upon the effectiveness of the registration statement.
The
        issue
        date of the third debenture will be on the date that the registration statement
        is ordered effective by the commission. That date is not determinable at
        this
        time. The third debenture will mature 3 years from its issue date, and has
        the
        same terms as the first and second debenture.
2.
THREE
                  WARRANTS
.
Pursuant
        to the Securities Purchase Agreement, we issued
three
        warrants to Cornell, all issued on June 19, 2006, with similar terms except
        for
        the exercise price and number of underlying shares of common stock. The unique
        terms of each of the three warrants are: (a) one warrant to purchase 955,000
        shares of common stock at an exercise price of $2.50 per share; (b) one warrant
        to purchase 715,000 shares of common stock at an exercise price of $3.50
        per
        share; and (c) one warrant to purchase 430,000 shares of common stock at
        an
        exercise price of $4.00 per share. The three warrants expire in
        2011
The
        material terms of each of the Warrants are as follows:
Cornell,
        is entitled to purchase from the Company upon surrender of the Warrants the
        number of shares of common stock at the applicable exercise price or as
        subsequently adjusted. However, in no event shall the holder be entitled
        to
        exercise this Warrant or be forced to exercise this Warrant for a number
        of
        Warrant Shares in excess of that number of Warrant Shares which, upon giving
        effect to such exercise, would cause the aggregate number of shares of Common
        Stock beneficially owned by the holder and its affiliates to exceed 4.99%
        of the
        outstanding shares of the Common Stock following such exercise, except within
        60
        days of the Expiration Date (however, such restriction may be waived by Holder
        (but only as to itself and not to any other holder) upon not less than 65
        days
        prior notice to the Company).
Exercise
        of Warrant
Each
        Warrant may be exercised by the holder (i) on a cash basis or (ii) if an
        Event
        of Default has occurred, or if at the time of exercise, one year has elapsed
        from the Issuance Date and the Warrant Shares are not subject to an effective
        registration statement, then on a cashless exercise.
12
Adjustment
        of Warrant Exercise Price and Number of Shares upon Issuance of Common
        Stock.
If
        and
        whenever on or after the Issuance Date of this Warrant, the Company issues
        or
        sells, or is deemed to have issued or sold, any shares of Common Stock (other
        than (i) Excluded Securities, (ii) shares of Common Stock which are issued
        or
        deemed to have been issued by the Company in connection with an Approved
        Stock
        Plan, or (iii) the Other Securities) for a consideration per share less than
        a
        price (the "Applicable Price") equal to the Warrant Exercise Price in effect
        immediately prior to such issuance or sale, then immediately after such issue
        or
        sale the Warrant Exercise Price then in effect shall be reduced to an amount
        equal to such consideration per share. Upon each such adjustment of the Warrant
        Exercise Price, the number of Warrant Shares issuable upon exercise of this
        Warrant shall be adjusted to the number of shares determined by multiplying
        the
        Warrant Exercise Price in effect immediately prior to such adjustment by
        the
        number of Warrant Shares issuable upon exercise of this Warrant immediately
        prior to such adjustment and dividing the product by the Warrant Exercise
        Price
        resulting from such adjustment.
The
        number of shares of Common Stock issuable upon exercise of this Warrant shall
        in
        no event be increased to an amount such that the Total Transaction Shares
        shall
        be greater than 9,215,406 shares (which no more than 19.99% of the 46,308,573
        outstanding shares of Common Stock as of the date of Securities Purchase
        Agreement), until the Company's shareholders approve (without the vote of
        any
        shares acquired in this transaction and related transactions) the issuance
        of
        the Total Transaction Shares. "Total Transaction Shares" shall mean, in the
        aggregate, any shares of Common Stock issued under (a) the Convertible
        Debentures issued in connection with the Securities Purchase Agreement to
        the
        Holder, or its affiliates, and transferees, subsequent transferees, or any
        other
        debenture issued pursuant to the Securities Purchase Agreement (b) the Warrant
        Shares (as defined in the Securities Purchase Agreement), and (c) any shares
        of
        Common Stock issued as Liquidated Damages (as defined in the Registration
        Rights
        Agreement).
Purchase
        Rights; Reorganization, Reclassification, Consolidation, Merger or
        Sale.
Adjustment
        of Warrant Exercise Price upon Subdivision or Combination of Common Stock.
        If
        the Company at any time after the date of issuance of this Warrant subdivides
        (by any stock split, stock dividend, recapitalization or otherwise) one or
        more
        classes of its outstanding shares of Common Stock into a greater number of
        shares, any Warrant Exercise Price in effect immediately prior to such
        subdivision will be proportionately reduced and the number of shares of Common
        Stock obtainable upon exercise of this Warrant will be proportionately
        increased. If the Company at any time after the date of issuance of this
        Warrant
        combines (by combination, reverse stock split or otherwise) one or more classes
        of its outstanding shares of Common Stock into a smaller number of shares,
        any
        Warrant Exercise Price in effect immediately prior to such combination will
        be
        proportionately increased and the number of Warrant Shares issuable upon
        exercise of this Warrant will be proportionately decreased. Any adjustment
        shall
        become effective at the close of business on the date the subdivision or
        combination becomes effective.
Distribution
        of Assets. If the Company shall declare or make any dividend or other
        distribution of its assets (or rights to acquire its assets) to holders of
        Common Stock, by way of return of capital or otherwise (including, without
        limitation, any distribution of cash, stock or other securities, property
        or
        options by way of a dividend, spin off, reclassification, corporate
        rearrangement or other similar transaction) (a "Distribution"), at any time
        after the issuance of this Warrant, then, in each such case:
13
Limitations.
        Notwithstanding the above warrant provisions, the number of shares of Common
        Stock issuable upon exercise of this Warrant shall in no event be increased
        to
        an amount such that the Total Transaction Shares shall be greater than 9,215,406
        shares (which no more than 19.99% of the 46,308,573 outstanding shares of
        Common
        Stock as of the date of Securities Purchase Agreement), until the Company's
        shareholders approve (without the vote of any shares acquired in this
        transaction and related transactions) the issuance of the Total Transaction
        Shares. "Total Transaction Shares" shall mean, in the aggregate, any shares
        of
        Common Stock issued under (a) the Convertible Debentures issued in connection
        with the Securities Purchase Agreement to the Holder, or its affiliates,
        and
        transferees, subsequent transferees, or any other debenture issued pursuant
        to
        the Securities Purchase Agreement (b) the Warrant Shares (as defined in the
        Securities Purchase Agreement), and (c) any shares of Common Stock issued
        as
        Liquidated Damages (as defined in the Registration Rights
        Agreement).
Purchase
        Rights; Reorganization, Reclassification, Consolidation, Merger or
        Sale.
If
        at any
        time the Company grants, issues or sells any Options, Convertible Securities
        or
        rights to purchase stock, warrants, securities or other property pro rata
        to the
        record holders of any class of Common Stock (the "Purchase Rights"), then
        the
        holder of this Warrant will be entitled to acquire, upon the terms applicable
        to
        such Purchase Rights, the aggregate Purchase Rights which such holder could
        have
        acquired if such holder had held the number of shares of Common Stock acquirable
        upon complete exercise of this Warrant immediately before the date on which
        a
        record is taken for the grant, issuance or sale of such Purchase Rights,
        or, if
        no such record is taken, the date as of which the record holders of Common
        Stock
        are to be determined for the grant, issue or sale of such Purchase
        Rights.
Any
        recapitalization, reorganization, reclassification, consolidation, merger,
        sale
        of all or substantially all of the Company's assets to another Person or
        other
        transaction in each case which is effected in such a way that holders of
        Common
        Stock are entitled to receive (either directly or upon subsequent liquidation)
        stock, securities or assets with respect to or in exchange for Common Stock
        is
        referred to herein as an "Organic Change." Prior to the consummation of any
        (i)
        sale of all or substantially all of the Company's assets to an acquiring
        Person
        or (ii) other Organic Change following which the Company is not a surviving
        entity, the Company will secure from the Person purchasing such assets or
        the
        successor resulting from such Organic Change (in each case, the "Acquiring
        Entity") a written agreement (in form and substance satisfactory to the holders
        of Warrants representing at least two-thirds (iii) of the Warrant Shares
        issuable upon exercise of the Warrants then outstanding) to deliver to each
        holder of Warrants in exchange for such Warrants, a security of the Acquiring
        Entity evidenced by a written instrument substantially similar in form and
        substance to this Warrant and satisfactory to the holders of the Warrants
        (including an adjusted warrant exercise price equal to the value for the
        Common
        Stock reflected by the terms of such consolidation, merger or sale, and
        exercisable for a corresponding number of shares of Common Stock acquirable
        and
        receivable upon exercise of the Warrants without regard to any limitations
        on
        exercise, if the value so reflected is less than any Applicable Warrant Exercise
        Price immediately prior to such consolidation, merger or sale). Prior to
        the
        consummation of any other Organic Change, the Company shall make appropriate
        provision (in form and substance satisfactory to the holders of Warrants
        representing a majority of the Warrant Shares issuable upon exercise of the
        Warrants then outstanding) to insure that each of the holders of the Warrants
        will thereafter have the right to acquire and receive in lieu of or in addition
        to (as the case may be) the Warrant Shares immediately theretofore issuable
        and
        receivable upon the exercise of such holder's Warrants (without regard to
        any
        limitations on exercise), such shares of stock, securities or assets that
        would
        have been issued or payable in such Organic Change with respect to or in
        exchange for the number of Warrant Shares which would have been issuable
        and
        receivable upon the exercise of such holder's Warrant as of the date of such
        Organic Change (without taking into account any limitations or restrictions
        on
        the Exercisability of this Warrant).
3.
REGISTRATION
                  RIGHTS AGREEMENT
.
14
We
        are
        required to file a registration statement to register the shares underlying
        the
        debentures and the warrants no later than 30 days from June 22, 2006 which
        was
        the date of the first closing. The Company will cause the Registration Statement
        to remain effective until all of the Registrable Securities have been sold.
        The
        Company shall use its best efforts (i) to have the Initial Registration
        Statement declared effective by the SEC no later than one hundred thirty
        five
        (135) days from the date of the first closing. (the "Scheduled Effective
        Deadline") and (ii) to insure that the Initial Registration Statement and
        any
        subsequent Registration Statement remains in effect until all of the Registrable
        Securities have been sold, subject to the terms and conditions of this
        Agreement. In the event the Registration Statement is not filed by the Scheduled
        Filing Deadline or is not declared effective by the SEC on or before the
        Scheduled Effective Date, or if after the Registration Statement has been
        declared effective by the SEC, sales cannot be made pursuant to the Registration
        Statement (whether because of a failure to keep the Registration Statement
        effective, failure to disclose such information as is necessary for sales
        to be
        made pursuant to the Registration Statement, failure to register sufficient
        shares of Common Stock or otherwise) then as partial relief for the damages
        to
        any holder of Registrable Securities by reason of any such delay in or reduction
        of its ability to sell the underlying shares of Common Stock (which remedy
        shall
        not be exclusive of any other remedies at law or in equity), the Company
        will
        pay as liquidated damages (the "Liquidated Damages") to the holder, at the
        holder's option, either a cash amount or shares of the Company's Common Stock
        within three (3) business days, after demand therefore, equal to two percent
        (2%) of the liquidated value of the Convertible Debentures outstanding as
        Liquidated Damages for each thirty (30) day period after the Scheduled Filing
        Deadline or the Scheduled Effective Date as the case may be.
The
        Company shall keep the Registration Statement effective pursuant to Rule
        415 at
        all times until the date on which the Investor shall have sold all the
        Registrable Securities covered by such Registration Statement (the "Registration
        Period"), which Registration Statement (including any amendments or supplements
        thereto and prospectuses contained therein) shall not contain any untrue
        statement of a material fact or omit to state a material fact required to
        be
        stated therein, or necessary to make the statements therein, in light of
        the
        circumstances in which they were made, not misleading. The Company shall
        prepare
        and file with the SEC such amendments (including post-effective amendments)
        and
        supplements to a Registration Statement and the prospectus used in connection
        with such Registration Statement, which prospectus is to be filed pursuant
        to
        Rule 424 promulgated under the Securities Act, as may be necessary to keep
        such
        Registration Statement effective at all times during the Registration Period,
        and, during such period, comply with the provisions of the Securities Act
        with
        respect to the disposition of all Registrable Securities of the Company covered
        by such Registration Statement until such time as all of such Registrable
        Securities shall have been disposed of in accordance with the intended methods
        of disposition by the seller or sellers thereof as set forth in such
        Registration Statement. In the case of amendments and supplements to a
        Registration Statement which are required to be filed pursuant to this Agreement
        by reason of the Company's filing a report on Form 10-K, Form 10-Q or Form
        8-K
        or any analogous report under the Securities Exchange Act of 1934, as amended
        (the "Exchange Act"), the Company shall incorporate such report by reference
        into the Registration Statement, if applicable, or shall file such amendments
        or
        supplements with the SEC on the same day on which the Exchange Act report
        is
        filed which created the requirement for the Company to amend or supplement
        the
        Registration Statement.
All
        expenses incurred in connection with registrations, filings or qualifications
        shall be paid by the Company.
4.
SECURITIES
                  PURCHASE AGREEMENT
.
The
        Company and Cornell entered into the Securities Purchase Agreement on June
        19,
        206, pursuant to which the First Closing of the purchase and sale of the
        ConvertibleDebentures took place on June 22, 2006. The Second Closing of
        thepurchase and sale of the Convertible Debentures took place prior to the
        date
        the RegistrationStatement was filed with the SEC, and the Third Closing ofthe
        purchase and sale of the Convertible Debentures shall take place immediately
        followingthe date the Registration Statement is declared effective by the
        SEC
15
We
        have
        agreed to take all steps necessary in our control to maintain the effectiveness
        and availability of an equity credit line that we already have. We are limited
        in the number and value of puts we may make against the equity credit line
        to
        aggregate gross proceeds of up to $500,000 per sixty (60) day period. However,
        if (a) the Registration Statement has been filed, (b) no Event of Default
        has
        occurred, (c) the Closing Bid Price of the Common Stock is above $5 for five
        consecutive Trading Days, (d) the Closing Bid Price remains above $5.00 on
        the
        day a put is made, then the Company may exceed the limitation set forth above
        and instead make up to two puts per 30 day period using a volume matrix price
        formula, the result of which is based on future stock volume and stock prices
        and it not determinable at this time.
We
        have
        reserved for issuance to the Buyers 6,000,000 shares for issuance upon
        conversions of the Convertible Debentures and 2,100,000 shares for issuance
        upon
        exercise of the Warrants
The
        Company has paid Yorkville Advisors, LLC a fee of $180,000 of the first
        Debenture Purchase Price, a fee of $180,000 of the second Debenture Purchase
        Price, and will pay a fee of $180,000 of the third Debenture Purchase Price.
        The
        Company paid a structuring fee to Yorkville Advisors, LLC of $15,000. The
        Company paid Yorkville Advisors, LLC a due diligence fee of $5,000.
We
        issued
        to the Buyer (a) a warrant to purchase 955,000 shares of Common Stock at
        an
        exercise price of $2.50 per share, (b) a warrant to purchase 715,000 shares
        of
        Common Stock at an exercise price of $3.50 per share, and (c) a warrant to
        purchase 430,000 shares of Common Stock at an exercise price of $4.00 per
        share
        (collectively, the "Warrants").
Cornell
        has represented and agreed that neither it nor any of its affiliates had
        an open
        short position in the Common Stock of the Company, and that it shall not,
        and
        that it will cause its affiliates not to, engage in any short sales of or
        hedging transactions with respect to the Common Stock as long as any Convertible
        Debentures shall remain outstanding
So
        long
        as any Convertible Debentures are outstanding, except with respect to the
        Excluded Securities (as defined below), the Company shall not, without the
        prior
        written consent of the Buyer(s), (i) issue or sell shares of Common Stock
        or
        Preferred Stock without consideration or for a consideration per share less
        than
        the bid price of the Common Stock determined immediately prior to its issuance,
        (ii) issue any preferred stock, warrant, option, right, contract, call, or
        other
        security or instrument granting the holder thereof the right to acquire Common
        Stock without consideration or for a consideration less than such Common
        Stock's
        Bid Price determined immediately prior to it's issuance, (iii) enter into
        any
        security instrument granting the holder a security interest in any and all
        assets of the Company, or (iv) file any registration statement on Form S-8,
        except to register up to 1,000,000 shares of common stock issued in connection
        with the Company's employee stock option plan. Notwithstanding the forgoing,
        the
        Company may issue and sell shares pursuant to its equity line of credit.
        For the
        purposes hereof, the term "Excluded Securities" shall mean up to 300,000
        shares
        per 90 day period issued at any time as compensation to employees or
        consultants, provided such shares are issued at current market prices at
        the
        time of issuance.
The
        obligation of Cornell to accept the Convertible Debentures at the Third Closing
        is subject to the satisfaction, at or before the Third Closing Date, of each
        of
        the following conditions:
The
        Common Stock shall be authorized for quotation on the a Primary Market, trading
        in the Common Stock shall not have been suspended for any reason, and the
        Conversion Shares shall have been approved for listing or quotation on the
        Primary Market.
The
        representations and warranties of the Company shall be true and correct in
        all
        material respects as of the date when made and as of the Third Closing Date
        as
        though made at that time (except for representations and warranties that
        speak
        as of a specific date) and the Company shall have performed, satisfied and
        complied in all material respects with the covenants, agreements and conditions
        required by this Agreement to be performed, satisfied or complied with by
        the
        Company at or prior to the Third Closing Date.
16
The
        Company shall have executed and delivered to the Buyer(s) the Convertible
        Debentures.
The
        Registration Statement shall have been declared effective by the
        SEC.
The
        Company shall not be in default under any of the Transaction
        Documents.
All
        conditions to the First Closing and the Second Closing shall have been
        performed.
The
        Company shall have certified, in a certificate executed by two officers of
        the
        Company and dated as of the Third Closing Date, that all conditions to the
        Third
        Closing have been satisfied.
5.
THE
                  AMENDMENT TO THE SECURITIES PURCHASE AGREEMENT
.
At
        the
        request of the American Stock Exchange we added explicit language to the
        Securities Purchase Agreement to set forth that the aggregate number of shares
        that could be issued in the transaction with Cornell shall not be greater
        than
        9,215,406 shares (which does not exceed 19.99% of the 46,308,573 outstanding
        shares of Common Stock as of the date of the Securities Purchase Agreement),
        until the Obligor's shareholders approve (without the vote of any shares
        acquired in this transaction and related transactions) the issuance of the
        Total
        Transaction Shares.
6.
TWO
                  SECURITY AGREEMENTS
.
We
        and
        two of our subsidiaries gave Cornell a security interest in some
        assets.
Parent
        Security Agreement.
In
        consideration of the debentures and warrant transactions, we granted to Cornell
        a security interest in:
(a)
All
        goods
        including, without limitation, machinery, equipment, furniture, furnishings,
        fixtures, signs, lights, tools, parts, supplies and motor vehicles of every
        kind
        and description owned by the Company or in which the Company may
        have.
(b)
All
        inventory including, but not limited to, all goods, wares, merchandise, parts,
        supplies, finished products, other tangible personal property, including
        such
        inventory as is temporarily out of Company's custody or possession and including
        any returns upon any accounts or other proceeds, including insurance proceeds,
        resulting from the sale or disposition of any of the foregoing;
(c)
All
        contract rights and general intangibles, including, without limitation,
        goodwill, trademarks, trade styles, trade names, leasehold interests,
        partnership or joint venture interests, patents and patent applications,
        copyrights, deposit accounts;
(d)
All
        documents, warehouse receipts, instruments and chattel paper of the
        Company;
(e)
All
        accounts and other receivables, instruments or other forms of obligations
        and
        rights to payment.
(f)
to
        the
        extent assignable, all rights under all present and future authorizations,
        permits, licenses and franchises issued or granted in connection with the
        operations of any of its facilities
17
(g)
except
        with respect to SCS Corporation and SCS Guinea SARL or any other interest,
        direct or indirect, that the subsidiaries may have or acquire in connection
        with
        Guinea, all equity interests, securities or other instruments in other
        companies, including, without limitation, any subsidiaries, investments or
        other
        entities (whether or not controlled); and;
(h)
all
        products and proceeds (including, without limitation, insurance proceeds)
        from
        the above-described Pledged Property.
(i)
The
        Pledged Property shall specifically exclude any and all interests in SCS
        Corporation and SCS Guinea SARL and any other interest, direct or indirect,
        now
        or in the future in connection with Guinea, and nothing herein shall be deemed
        to encumber any assets of either SCS Corporation or SCS Guinea SARL or any
        other
        interest, direct or indirect, that the subsidiaries may have or acquire in
        connection with Guinea.
Subsidiary
        Security Agreement.
In
        consideration of the debenture and warrant transactions, two of our
        subsidiaries, Trendsetter Production Company and HYD Resources Corporation,
        granted to Cornell a security interest in effectively all of their
        assets.
7.
IRREVOCABLE
                  TRANSFER AGENT INSTRUCTIONS
.
We
        gave
        our transfer agent irrevocable instructions on the procedure to follow when
        issuing shares to Cornell whereby the transfer agent will issue shares to
        Cornell upon delivery to the transfer agent of a conversion notice or an
        exercise notice. The shares to be issued will have no restricted legend.
        We have
        appointed an escrow agent to deliver the notices from Cornell to the transfer
        agent. Acts, errors, commissions or omission of the escrow agent shall not
        cause
        a default of the irrevocable transfer agent instructions, nor a default of
        any
        related agreement. The transfer agent shall rely exclusively on the notice
        and
        shall have no liability for relying on such notice. Any notice constitutes
        an
        irrevocable instruction to the transfer agent to process such notices. We
        agreed
        that it shall we will not replace the transfer agent without the prior written
        consent of Cornell.
THE
        OFFERING
Outstanding
                  Common Stock Before This Offering
46,308,573
                  (as of June 29, 2006).
Common
                  Stock Offered
Up
                  to 5,100,000 shares of common stock underlying the 3 convertible
                  debenture
                  and the 2,100,000 warrants to be issued to Selling
                  Stockholders.
Outstanding
                  Common Stock After This Offering
51,408,573
                  shares (if all offered shares are sold).
Offering
                  Price
Determined
                  at the time of sale by the Selling Stockholders.
Proceeds
We
                  will not receive any proceeds from the sale of the common stock
                  offered by
                  the Selling Stockholders that may be sold pursuant to this prospectus.
                  However, we may receive proceeds of up to
$6,610,000
from
                  the exercise of the warrants overlying some of the common stock
                  only if
                  Cornell utilizes the cash method of exercise.
Risk
                  Factors
The
                  securities offered hereby involve a high degree of risk. See "Risk
                  Factors" on page 32.
18
RISK
        FACTORS
You
        should carefully consider the following risk factors before purchasing our
        common stock. The risks and uncertainties described below are not the only
        ones
        we face. There may be additional risks and uncertainties that are not known
        to
        us or that we do not consider to be material at this time. If the events
        described in these risks occur, our business, financial condition and results
        of
        operations would likely suffer. This prospectus contains forward-looking
        statements that involve risks and uncertainties. Our actual results may differ
        significantly from the results discussed in the forward-looking statements.
        This
        section discusses the risk factors that might cause those
        differences.
Risks
        about the Oil and Gas Industry
OIL
        AND GAS PRICES ARE VOLATILE.
Our
        revenues, cash flow, operating results, financial condition and ability to
        borrow funds or obtain additional capital depend substantially on the prices
        that we receive for oil and gas production. Declines in oil and gas prices
        may
        adversely affect our financial condition, liquidity, ability to obtain financing
        and operating results. Lower oil and gas prices also may reduce the amount
        of
        oil and gas that we can produce economically. High oil and gas prices could
        preclude acceptance of our business model. Depressed prices in the future
        could
        have a negative effect on our future financial results. Historically, oil
        and
        gas prices and markets have been volatile, with prices fluctuating widely,
        and
        they are likely to continue to be volatile. Prices for oil and gas are subject
        to wide fluctuations in response to relatively minor changes in supply and
        demand, market uncertainty and a variety of additional factors that are beyond
        our control. These factors include:
-
the
                  domestic and foreign supplies of
                  oil;
-
the
                  level of consumer product demand;
-
weather
                  conditions;
-
political
                  conditions in oil producing regions, including the Middle
                  East;
-
the
                  ability of the members of the Organization of Petroleum Exporting
                  Countries to agree to and maintain oil price and production
                  controls;
-
the
                  price of foreign imports;
-
actions
                  of governmental authorities;
-
domestic
                  and foreign governmental
                  regulations;
-
the
                  price, availability and acceptance of alternative
                  fuels;
-
overall
                  economic conditions.
These
        factors and the volatile nature of the energy markets make it impossible
        to
        predict with any certainty future oil and gas prices. Our inability to respond
        appropriately to changes in these factors could negatively affect our
        profitability.
INVESTMENT
        IN THE OIL AND GAS BUSINESS IS RISKY.
Oil
        and
        gas exploration and development are inherently speculative activities. There
        is
        no certain method to determine whether or not a given lease will produce
        oil or
        gas or yield oil or gas in sufficient quantities and quality to result in
        commercial production. There is always the risk that development of a lease
        may
        result in dry holes or in the discovery of oil or gas that is not commercially
        feasible to produce. There is no guarantee that a producing asset will continue
        to produce. Because of the high degree of risk involved, there can be no
        assurance that we will recover any portion of our investment or that our
        investment in leases will be profitable.
THERE
        ARE DRILLING AND OPERATIONAL HAZARDS.
The
        oil
        and gas business involves a variety of operating risks, including:
-
blowouts,
                  cratering and explosions;
-
mechanical
                  and equipment problems;
-
uncontrolled
                  flows of oil and gas or well
                  fluids;
-
fires;
-
marine
                  hazards with respect to offshore
                  operations;
-
formations
                  with abnormal pressures;
-
pollution
                  and other environmental risks;
-
natural
                  disasters.
Any
        of
        these events could result in loss of human life, significant damage to property,
        environmental pollution, impairment of our operations and substantial losses.
        Locating pipelines near populated areas, including residential areas, commercial
        business centers and industrial sites, could increase these risks. In accordance
        with customary industry practice, we will maintain insurance against some,
        but
        not all, of these risks and losses. The occurrence of any of these events
        not
        fully covered by insurance could have an adverse effect on our financial
        position and results of operations.
19
WE
        ARE SUBJECT TO GOVERNMENTAL REGULATIONS.
Oil
        and
        gas operations in the United States are subject to extensive government
        regulation and to interruption or termination by governmental authorities
        on
        account of ecological and other considerations. The Environmental Protection
        Agency of the United States and the various state departments of environmental
        affairs closely regulate gas and oil production effects on air, water and
        surface resources. Furthermore, proposals concerning regulation and taxation
        of
        the gas and oil industry are constantly before Congress. It is impossible
        to
        predict future proposals that might be enacted into law and the effect they
        might have on us. Thus, restrictions on gas and oil activities, such as
        production restrictions, price controls, tax increases and pollution and
        environmental controls may have an adverse effect on us.
THE
        OIL AND GAS INDUSTRY IS SUBJECT TO HAZARDS RELATED TO POLLUTION AND
        ENVIRONMENTAL ISSUES.
Hazards
        in the drilling and/or the operation of gas and oil properties, such as
        accidental leakage or spillage, are sometimes encountered. Such hazards may
        cause substantial liabilities to third parties or governmental entities,
        the
        payment of which could reduce distributions or result in the loss of our
        leases.
        Although it is anticipated that insurance will be obtained by third party
        operators for our benefit, we may be subject to liability for pollution and
        other damages due to environmental events which cannot be insured against
        due to
        prohibitive premium costs, or for other reasons. Environmental regulatory
        matters also could increase substantially the cost of doing business, may
        cause
        delays in producing oil and gas or require the modification of operations
        in
        certain areas.
Our
        operations are subject to numerous stringent and complex laws and regulations
        at
        the Federal, state and local levels governing the discharge of materials
        into
        the environment or otherwise relating to environmental protection. Failure
        to
        comply with these laws and regulations may result in the assessment of
        administrative, civil and criminal penalties, the imposition of remedial
        requirements, and the imposition of injunctions to force future
        compliance.
The
        Oil
        Pollution Act of 1990 and its implementing regulations impose a variety of
        requirements related to the prevention of oil spills, and liability for damages
        resulting from such spills in United States waters. OPA 90 imposes strict
        joint
        and several liability on responsible parties for oil removal costs and a
        variety
        of public and private damages, including natural resource damages. While
        liability limits apply in some circumstances, a party cannot take advantage
        of
        liability limits if the spill was caused by gross negligence or willful
        misconduct or resulted from violation of a Federal safety, construction or
        operation regulation. If a party fails to report a spill or to cooperate
        fully
        in a cleanup, liability limits likewise do not apply. Even if applicable,
        the
        liability limits for offshore facilities require the responsible party to
        pay
        all removal costs, plus up to $75 million in other damages. For onshore
        facilities, the total liability limit is $350 million. OPA 90 also requires
        a
        responsible party at an offshore facility to submit proof of its financial
        ability to cover environmental cleanup and restoration costs that could be
        incurred in connection with an oil spill.
The
        Comprehensive Environmental Response, Compensation, and Liability Act, also
        known as the "Superfund" law, and analogous state laws impose joint and several
        liability on certain classes of persons that are considered to have contributed
        to the release of a "hazardous substance" into the environment. These parties
        include the owner or operator of the site where the release occurred, and
        those
        that disposed or arranged for the disposal of hazardous substances found
        at the
        site. Responsible parties under CERCLA may be subject to joint and several
        liability for remediation costs at the site, and may also be liable for natural
        resource damages. Additionally, it is not uncommon for neighboring landowners
        and other third parties to file tort claims for personal injury and property
        damage allegedly caused by hazardous substances released into the
        environment.
State
        and
        local statutes and regulations require permits for drilling operations, drilling
        bonds and reports concerning operations. In addition, there are state statutes,
        rules and regulations governing conservation matters, including the unitization
        or pooling of oil and gas properties, establishment of maximum rates of
        production from oil and gas wells and the spacing, plugging and abandonment
        of
        such wells. Such statutes and regulations may limit the rate at which oil
        and
        gas could otherwise be produced from our properties and may restrict the
        number
        of wells that may be drilled on a particular lease or in a particular
        field.
Risks
        About Our Business
GEOPOLITICAL
        INSTABILITY.
We
        conduct business in Guinea, which is in a region of the world where there
        have
        been recent civil wars, revolutionary wars, and internecine conflicts. Although
        Guinea is a peaceful nation, external or internal political forces could
        potentially create a political or military climate that might cause a change
        in
        political leadership or the outbreak of hostilities. Such a change could
        result
        in our having to cease our Guinea operations and result in the loss or delay
        of
        our rights under the PSA.
GEOPOLITICAL
        POLITICS.
We
        could
        lose the Guinea acreage. We are presently operating under a farmout from
        a PSA
        through USOil Corporation ("USOil"). However, in the recent past USOil told us
        that the PSA had been terminated by the "proper authority." Subsequently
        the government of Guinea told us that the termination did not come from the
        proper authority. If the PSA is determined to have been lawfully terminated
        or
        if we are unable to negotiate a new PSA with the government, we will lose
        the
        Guinea acreage. That outcome would mean that we would not be able to drill
        for
        oil and gas in Guinea.
WE
        MAY HAVE WRITE DOWNS OF OUR ASSETS DUE TO PRICE
        VOLATILITY.
SEC
        accounting rules require us to review the carrying value of our oil and gas
        properties on a quarterly basis for possible write down or impairment. Under
        these rules, capitalized costs of proved reserves may not exceed a ceiling
        calculated at the present value of estimated future net revenues from those
        proved reserves. Capital costs in excess of the ceiling must be permanently
        written down. A decline in oil and natural gas prices could cause a write
        down
        which would negatively affect our net income.
20
ESTIMATES
        OF OIL AND GAS RESERVES ARE UNCERTAIN AND MAY VARY SUBSTANTIALLY FROM ACTUAL
        PRODUCTION.
We
        do not
        have any reserve reports or geology or petroleum engineering reports. There
        are
        numerous uncertainties inherent in estimating quantities of proved reserves
        and
        in projecting future rates of production and timing of expenditures, including
        many factors beyond our control. A reserve report is the estimated quantities
        of
        oil and gas based on reports prepared by third party reserve engineers. Reserve
        reporting is a subjective process of estimating underground accumulations
        of oil
        and natural gas that cannot be measured in an exact manner. The accuracy
        of any
        reserve estimate is a function of the quality of available geological,
        geophysical, engineering and economic data and the precision of engineering
        and
        judgment. As a result, estimates of different engineers often vary. The
        estimates of reserves, future cash flows and present value are based on various
        assumptions, including those prescribed by the SEC relating to oil and natural
        gas prices, drilling and operating expenses, capital expenditures, taxes
        and
        availability of funds, and are inherently imprecise.
THE
        UNAVAILABILITY OR HIGH COST OF DRILLING RIGS, EQUIPMENT, SUPPLIES, PERSONNEL
        AND
        OILFIELD SERVICES COULD ADVERSELY IMPACT US.
Drilling
        activity offshore Guinea will require that we have access to an offshore
        drilling rig. Either unavailability, shortages or increases in the cost of
        drilling rigs, equipment, supplies or personnel could delay or adversely
        affect
        our Guinea operations. There can be no assurance that we will be able to
        obtain
        the necessary equipment or that services will be available at economical
        prices.
FAILURE
        TO FIND OIL AND GAS.
We
        may
        not be able to find oil and gas in commercial quantities, and if not, our
        future
        revenue potential would be substantially reduced.
WE
        MAY BE UNABLE TO ACQUIRE OIL AND GAS LEASES.
To
        engage
        in oil and gas exploration, we must first acquire rights to conduct exploration
        and recovery activities on identified prospects. We may not be successful
        in
        acquiring farmouts, permits, lease options, leases or other rights to explore
        for or recover oil and gas. Other major and independent oil and gas companies
        with financial resources significantly greater than ours may bid against
        us for
        the purchase of oil and gas leases. If we or our subsidiaries are unsuccessful
        in acquiring these leases, permits, options and other interests, our prospect
        inventory for exploration and drilling could be significantly reduced, and
        our
        business, results of operations and financial condition could be substantially
        harmed.
EXPANSION
        OF OUR EXPLORATION PROGRAM WILL REQUIRE CAPITAL FROM OUTSIDE
        SOURCES.
We
        do not
        currently have the financial resources to explore and drill all of our currently
        identified prospects. Absent raising additional capital or entering into
        joint
        venture agreements, we will not be able to increase our exploration and drilling
        operations at the projected rate. This could limit the size of our business.
        There is no assurance that capital will be available in the future to us
        or that
        capital will be available under terms acceptable to us. We will need to raise
        additional money, either through the sale of equity securities (which could
        dilute the existing stockholders' interest), through the entering of joint
        venture agreements (which, while limiting our risk, could reduce our ownership
        interest in particular assets), or from borrowings from third parties (which
        could result in additional assets being pledged as collateral and which would
        increase our debt service requirements).
Additional
        capital could be obtained from a combination of funding sources, many of
        which
        could have an adverse effect on our business, results of operations and
        financial condition. These potential funding sources, and the potential adverse
        effects attributable thereto, include:
-
cash
                  flow from operating activities, which is sensitive to prices we
                  receive
                  for oil and natural gas and the success of current and future
                  operations;
-
borrowings
                  from financial institutions, which may subject us to certain restrictive
                  covenants, including covenants restricting our ability to raise
                  additional
                  capital or pay dividends;
-
debt
                  offerings, which would increase our leverage and add to our need
                  for cash
                  to service such debt (which could result in additional assets being
                  pledged as collateral and which could increase our debt service
                  requirements);
-
additional
                  offerings of equity securities, which would cause dilution of our
                  common
                  stock;
-
sales
                  of prospects generated by the exploration program, which would
                  reduce
                  future revenues from that program;
-
additional
                  sales of interests in our projects, which could reduce future
                  revenues.
Our
        ability to raise additional capital will depend on the results of operations
        and
        the status of various capital and industry markets at the time such additional
        capital is sought. Capital may not become available to us from any particular
        source or at all. Even if additional capital becomes available, it may not
        be on
        terms acceptable to us. Failure to obtain additional financing on acceptable
        terms may have an adverse effect on our business, results of operations and
        financial condition.
WE
        HAVE COMPETITION FROM OTHER COMPANIES.
21
A
        large
        number of companies and individuals engage in drilling for gas and oil, and
        there is competition for the most desirable prospects. We will encounter
        intense
        competition from other companies and other entities in the sale of our gas
        and
        oil production. We could be competing with numerous gas and oil companies
        which
        may have financial resources significantly greater than ours. Further, the
        quantities of gas and oil to be delivered by us may be affected by factors
        beyond our control, such as the inability of the wells to deliver at the
        necessary quality and pressure, premature exhaustion of reserves, changes
        in
        governmental regulations affecting allowable production and priority
        allocations, and price limitations imposed by Federal and state regulatory
        agencies.
WE
        DEPEND ON INDUSTRY VENDORS AND MAY NOT BE ABLE TO OBTAIN ADEQUATE
        SERVICES.
We
        are
        and will continue to be dependent on industry vendors for the success of
        our oil
        and gas exploration projects. These contracted services include, but are
        not
        limited to, accounting, drilling, completion, workovers (remedial down hole
        work
        on a well) and reentries (entering an existing well and changing the direction
        and/or depth of a well), geological evaluations, engineering, leasehold
        acquisition (landmen), operations, legal, investor relations/public relations,
        and prospect generation. We could be harmed if we fail to attract quality
        industry vendors to participate in the drilling of prospects which we identify
        or if our industry vendors do not perform satisfactorily. We often have,
        and
        will continue to have, little control over factors that would influence the
        performance of our vendors.
WE
        RELY ON THIRD PARTIES FOR PRODUCTION SERVICES AND PROCESSING
        FACILITIES.
The
        marketability of our production depends upon the proximity of our reserves
        to,
        and the capacity of, facilities and third party services, including oil and
        natural gas gathering systems, pipelines, trucking or terminal facilities,
        and
        processing facilities. The unavailability or lack of capacity of such services
        and facilities could result in the shut-in of producing wells or the delay
        or
        discontinuance of development plans for properties. A shut-in or delay or
        discontinuance could adversely affect our financial condition. In addition,
        Federal and state regulation of oil and natural gas production and
        transportation affect our ability to produce and market oil and natural gas
        on a
        profitable basis.
OUR
        APPROACH TO TITLE ASSURANCE COULD ADVERSELY AFFECT OUR BUSINESS AND
        OPERATIONS.
We
        intend
        to purchase oil and gas interests and leases from third parties or directly
        from
        the mineral fee owners as the inventory upon which we will perform our
        exploration activities. The existence of a title deficiency can render a
        lease
        worthless and can result in a large expense to us. Title insurance covering
        the
        mineral leaseholds is not generally available and in all instances, we forego
        the expense of retaining lawyers to examine the title to the mineral interest
        to
        be placed under lease or already placed under lease until the drilling block
        is
        assembled and ready to be drilled. We rely upon the judgment of oil and gas
        lease brokers or experienced landmen who perform the field work in examining
        records in the appropriate governmental office before attempting to acquire
        or
        place under lease a specific mineral interest. This is customary practice
        in the
        oil and gas industry. However, if there is a defect in title, the amount
        that we
        paid for such oil and gas leases or interests is generally lost. If the
        defective lease covers acreage which is critical to the success of a particular
        project, the loss could have an adverse effect by making the target area
        potentially undrillable.
RISKS
        RELATED TO OUR FINANCIAL OPERATIONS
WE
        HAVE A HISTORY OF LOSSES.
We
        have
        experienced substantial operating losses. We expect to incur significant
        operating losses until sales increase. We will also need to raise sufficient
        funds to finance our activities. We may be unable to achieve or sustain
        profitability.
WE
        HAVE AN ACCUMULATED DEFICIT AND MAY INCUR ADDITIONAL
        LOSSES.
We
        have a
        substantial accumulated deficit. We may not be able to meet our debts as
        they
        become due. If we are unable to generate sufficient cash flow or obtain funds
        to
        pay debt, we will be in default.
WE
        MAY EXPERIENCE POTENTIAL FLUCTUATIONS IN RESULTS OF
        OPERATIONS.
Our
        future revenues may be affected by a variety of factors, many of which are
        outside our control, including (a) the success of project results; (b) swings
        in
        availability of drilling services needed to implement projects and the pricing
        of such services; (c) a volatile oil and gas pricing market which may make
        certain projects that we undertake uneconomic; (d) the ability to attract
        new
        independent professionals with prospects in a timely and effective manner;
        and
        (e) the amount and timing of operating costs and capital expenditures relating
        to conducting our business operations and infrastructure. As a result of
        our
        limited operating history and the emerging nature of our business plan, it
        is
        difficult to forecast revenues or earnings accurately, which may fluctuate
        significantly from quarter to quarter.
IF
        WE CANNOT OBTAIN ADDITIONAL FINANCING, WE MAY HAVE TO CURTAIL OPERATIONS
        AND MAY
        ULTIMATELY CEASE TO EXIST.
Our
        financial statements reflect recurring, ongoing and substantial yearly net
        losses, and negative cash flows from operations. These conditions require
        sufficient additional funding or alternative sources of capital to meet our
        working capital needs. We have raised capital by selling common stock, issuing
        convertible debentures and our equity line of credit which will also requires
        us
        to issue common stock. However, future financing may not be available in
        amounts
        or on terms acceptable to us, if at all. If we cannot raise funds on acceptable
        terms, or achieve positive cash flow, we may be forced to curtail operations
        or
        may ultimately cease to exist.
WE
        MAY NOT BE ABLE TO RAISE THE REQUIRED CAPITAL TO CONDUCT OUR OPERATIONS;
        EQUITY
        LINE OF CREDIT.
22
We
        may
        require additional capital resources in order to conduct our operations.
        If we
        cannot obtain additional funding, we may make reductions in the scope and
        size
        of our operations. In order to grow and expand our business, and to introduce
        our services to the marketplace, we will need to raise additional funds.
        We have
        an equity line of credit. We have made 5 puts on the equity line of credit
        since
        February 2006 in the aggregate amount of $967,00. At June 23, 2006, the
        remaining amount available for us to draw down on the equity line of credit
        is
        $19,032,900. The equity line of credit expires in February 2009, after which
        we
        will not be able to draw down on the equity line of credit even if has not
        been
        fully utilized by us. The Cornell agreements limit our use of the equity
        line of
        credit. Whether as a result of the Cornell Agreements or as a result of our
        discretion, between now and February 2009, we may not have drawn down the
        full
        $19,032,900 currently available in the equity line of credit.
RISKS
        ABOUT OUR SECURITIES
WE
        MAY ISSUE ADDITIONAL SHARES OF COMMON STOCK IN THE FUTURE, WHICH COULD CAUSE
        DILUTION TO ALL SHAREHOLDERS.
We
        may
        seek to raise additional equity capital in the future. Any issuance of
        additional shares of our common stock will dilute the percentage ownership
        interest of all shareholders and may dilute the book value per share of our
        common stock.
SHAREHOLDERS
        COULD INCUR NEGATIVE IMPACT DUE TO THE REMOVAL OF THE LEGEND ON A SIGNIFICANT
        PERCENTAGE OF OUR OUTSTANDING SHARES OF COMMON STOCK, OR THE EXERCISE OF
        OPTIONS
        AND WARRANTS.
As
        of June 26, 2006, approximately 9,320,146 shares of our common stock was
        restricted stock some of which was eligible to be sold immediately pursuant
        Rule
        144 of the Securities Act of 1933, as amended. We have outstanding approximately
        6,6,088,778 warrants and options (excluding the 2,100,000 warrants issued
        to
        Cornell). If these options and warrants are exercised, the underlying shares
        will ultimately become subject to resale pursuant to Rule 144. We do not
        know
        when or if these options will be exercised. In the event that a substantial
        number of these shares are offered for sale in the market by several holders,
        the market price of our common stock could be adversely affected.
SHAREHOLDERS
        COULD INCUR NEGATIVE IMPACT DUE TO THE SALE OF THE SHARES IN THIS
        OFFERING.
The
        registration of 5,100,000 shares in this registration statement will also
        increase the number of common shares which could be sold in the public market.
        The availability of public trading for such a large number of shares may
        have an
        adverse effect on the trading prices of our common stock. No prediction can
        be
        made as to the effect, if any, that sales of shares of our common stock or
        the
        availability of such shares for sale will have on the market prices prevailing
        from time to time. Nevertheless, the possibility that substantial amounts
        of
        common stock may be sold in the public market would likely have an adverse
        effect on prevailing market prices for the common stock.
OUR
        MANAGEMENT CONTROLS A SIGNIFICANT PERCENTAGE OF OUR CURRENT OUTSTANDING COMMON
        STOCK; THEIR INTERESTS MAY CONFLICT WITH THOSE OF OUR
        SHAREHOLDERS.
As
        of June 26, 2006, our Directors and Executive Officers and their affiliates
        collectively and beneficially owned approximately 38 % of our outstanding
        common
        stock, including all warrants exercisable within 60 days of the date of this
        prospectus. This concentration of voting control gives our Directors and
        Executive Officers and their respective affiliates substantial influence
        over
        any matters which require a shareholder vote, including, without limitation,
        the
        election of Directors, even if their interests may conflict with those of
        other
        shareholders. It could also have the effect of delaying or preventing a change
        in control of or otherwise discouraging a potential acquirer from attempting
        to
        obtain control of us. This could have an adverse effect on the market price
        of
        our common stock or prevent our shareholders from realizing a premium over
        the
        then prevailing market prices for their shares of common stock.
IF
        WE ISSUE SECURITIES PURSUANT TO THE EQUITY LINE OF CREDIT, THEN EXISTING
        STOCKHOLDERS MAY EXPERIENCE SIGNIFICANT DILUTION.
We
        utilize an equity line of credit. The sale of shares pursuant to equity line
        of
        credit will have a dilutive impact on our stockholders. As a result, our
        net
        income per share could decrease in future periods, and the market price of
        our
        common stock could decline. In addition, the lower our stock price at the
        time
        we exercise draw down on the equity line of credit, the more shares we will
        have
        to issue. If our stock price decreases, then our existing stockholders would
        experience greater dilution.
IMPACT
        OF THE EQUITY LINE OF CREDIT
As
        we
        draw down on the equity line of credit, our such common stock will be purchased
        at or less than the then market price. Sales of such common stock could cause
        the market price of our common stock to decline.
OUR
        STOCK PRICE IS HIGHLY VOLATILE AND YOU MAY LOSE SOME OR ALL OF YOUR
        INVESTMENT.
Trading
        prices of our common stock may fluctuate in response to a number of events
        and
        factors, such as:
-
general
                  economic conditions changes in interest
                  rates;
-
conditions
                  or trends in the oil and gas
                  business;
-
fluctuations
                  in the stock market in general and market prices for oil and gas
                  companies
                  in particular;
23
-
quarterly
                  variations in our operating
                  results;
-
new
                  products, services, innovations, and strategic developments by
                  our
                  competitors or us, or business combinations and investments by
                  our
                  competitors or us;
-
changes
                  in environmental regulation;
-
changes
                  in our capital structure, including issuance of additional debt
                  or equity
                  to the public;
-
additions
                  or departures of our key personnel;
-
corporate
                  restructurings, including layoffs or closures of
                  facilities;
-
certain
                  analyst reports, news and
                  speculation.
Any
        of
        these events may cause our stock price to rise or fall and may adversely
        affect
        our business and financing opportunities.
WE
        DO NOT INTEND TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE; THEREFORE, YOU
        MAY
        NEVER SEE A RETURN ON YOUR INVESTMENT.
We
        do not
        anticipate the payment of cash dividends on our common stock in the foreseeable
        future. We anticipate that any profits from our operations will be devoted
        to
        our future operations. Any decision to pay dividends will depend upon our
        profitability at the time, cash available and other factors.
THE
        SHARES AVAILABLE FOR SALE BY THE SELLING STOCKHOLDERS COULD SIGNIFICANTLY
        REDUCE
        THE MARKET PRICE OF OUR COMMON STOCK.
A
        total
        of 5,100,000 shares of our common stock are being registered for resale under
        this prospectus. The market price of our common stock could drop if a
        substantial amount of these shares are sold in the public market. A drop
        in the
        market price will reduce the value of your investment.
SELLING
        STOCKHOLDERS MAY SELL SECURITIES AT ANY PRICE OR TIME WHICH COULD REDUCE
        THE
        MARKET PRICE OF OUR COMMON STOCK.
The
        Selling Stockholders may offer and sell their shares at prices and times
        determined by them. However, the Selling Stockholders are not required to
        engage
        in any stock selling at all. The timing of sales and the prices at which
        the
        shares are sold by the Selling Stockholders could have an adverse effect
        upon
        the public market for our common stock. If the Selling Stockholders offer
        or
        sell their shares at less than the then prevailing market price, our stock
        price
        may decline.
SINCE
        WE HAVE NOT PAID ANY DIVIDENDS ON OUR COMMON STOCK AND DO NOT INTEND TO DO
        SO IN
        THE FUTURE, A PURCHASER OF OUR COMMON STOCK WILL ONLY REALIZE A GAIN ON THEIR
        INVESTMENT IF THE MARKET PRICE OF OUR COMMON STOCK
        INCREASES.
We
        have
        never paid, and do not intend to pay, any cash dividends on our common Stock
        for
        the foreseeable future. An investor in this offering, in all likelihood,
        will
        only realize a profit on their investment if the market price of our common
        stock increases in value.
MATERIAL
        RISKS RELATED TO OUR CORPORATE GOVERNANCE
OUR
        DIRECTORS AND OFFICERS HAVE RIGHTS TO INDEMNIFICATION.
The
        Delaware General Corporation Law provides that we will indemnify our directors
        and officers if they are a party to any civil or criminal action. This may
        discourage claimants from making claims against the directors and officers
        even if the claims have merit. The cost of indemnification could be
        high.
Insofar
        as indemnification for liabilities arising under the Securities Act may be
        permitted to our directors, officers and controlling persons pursuant to
        the
        foregoing provisions, we have been advised that in the opinion of the Securities
        and Exchange Commission, such indemnification is against public policy as
        expressed in the Securities Act and is therefore unenforceable.
24
INFORMATION
          ABOUT
FORWARD-LOOKING
          STATEMENTS
Some
          of
          the statements contained in this prospectus, including, without limitation,
          statements containing the words "believes," "anticipates," "expects," and other
          words of similar import, are "forward-looking statements." Forward-looking
          statements involve known and unknown risks, uncertainties and other factors
          which may cause our actual results, performance or achievements to be materially
          different from any future results, performance, or achievements expressed
          or
          implied by forward-looking statements. Given these uncertainties, readers
          are
          cautioned not to place undue reliance on forward-looking
          statements.
SELECTED
          FINANCIAL DATA
SELECTED
          ANNUAL FINANCIAL DATA
2005
2004
2003
2002
2001
Revenues
$
172,699
$
38,344
$
468,022
$
355,628
$
426,601
Loss
                    from Operations
(4,899,905
)
(3,116,914
)
(2,414,700
)
(3,012,759
)
(2,881,129
)
NET
                    LOSS CHARGEABLE TO COMMON SHAREHOLDERS
(5,344,570
)
(3,677,821
)
(2,645,316
)
(3,180,866
)
(2,911,971
)
Basic
                    and Diluted loss per common share
(0.13
)
(0.12
)
(0.12
)
(0.18
)
(0.21
)
Weighted
                    average shares outstanding
41,646,844
31,938,926
22,580,526
17,426,561
13,655,960
Working
                    Capital (deficit)
$
(1,413,761
)
$
1,624,848
$
(1,266,584
)
$
(723,960
)
$
(1,083,108
)
Capital
                    Expenditure (deficit)
(2,889,993
)
2,973,424
147,002
(5,250
)
(999,170
)
Long
                    Term Liabilities
134,696
725,604
255,793
183,345
81,292
Stockholders'
                    Equity
3,145,449
4,660,190
(317,101
)
367,388
84,737
Total
                    Assets
5,209,322
7,282,662
1,480,294
1,424,966
1,568,939
SELECTED
          QUARTERLY FINANCIAL DATA (Unaudited)
Nine
                      months ended
March
                      31,
March
                      31,
2006
2005
Revenues
$
329,052
$
148,693
Loss
                      from operations
$
(4,402,573
)
$
(3,282,223
)
Net
                      loss chargeable to common shareholders
$
(5,793,977
)
$
(3,681,256
)
Basic
                      and diluted loss per common share
$
(0.14
)
$
(0.09
)
Weighted
                      average shares outstanding
42,468,964
41,498,372
Working
                      capital (deficit)
$
(2,818,269
)
$
(349,925
)
Long
                      term liabilities
$
_
$
173,164
Stockholders
                      equity
$
2,513,937
$
4,068,923
Total
                      Assets
$
5,704,728
$
6,277,270
25
Quarter
                    Ended
2006
September
                    30
December
                    31
March
                    31
June
                    30
Total
Revenue
$
87,410
$
107,408
$
134,234
$
$
329,052
Gross
                    profit (loss)
(606,083
)
(472,506)
)
(107,544)
)
(1,186,143
)
Loss
                    from operations
(1,385,086
)
(1,372,752
)
(1,645,635
)
(4,402,573
)
Net
                    loss
(1,444,032
)
(1,477,161
)
(2,792,584
)
(5,711,977
)
Basic
                    and diluted loss per common share
(0.03
)
(0.04
)
(0.06
)
(0.14
Quarter
                    Ended
2005
September
                    30
December
                    31
March
                    31
June
                    30
Total
Revenue
$
66,156
$
54,535
$
28,002
$
24,006
$
172,699
Gross
                    profit (loss)
(129,429
)
(166,058
)
(238,025
)
(642,318
)
(1,175,830
)
Loss
                    from operations
(965,774
)
(1,251,722
)
(1,064,726
)
(1,617,683
)
(4,899,905
)
Net
                    loss
(1,019,675
)
(1,476,195
)
(1,084,191
)
(1,636,064
)
(5,216,125
)
Basic
                    and diluted loss per common share
(0.03
)
(0.04
)
(0.03
)
(0.03
)
(0.13
Quarter
                    Ended
2004
September
                    30
December
                    31
March
                    31
June
                    30
Total
Revenue
$
--
$
24,027
$
--
$
14,317
$
38,344
Gross
                    profit (loss)
--
(25,687
)
(42,522
)
(100,647
)
(168,856
)
Loss
                    from operations
(4,479,717
)
(321,097
)
(1,290,726
)
2,974,626
(3,116,914
)
Net
                    loss
(4,518,720
)
(647,551
)
(1,348,774
)
3,024,002
(3,491,043
)
Basic
                    and diluted loss per common share
(0.17
)
(0.02
)
(0.04
)
1.00
(0.13
)
SUPPLEMENTARY
          FINANCIAL INFORMATION
Supplemental
          Oil and Gas Information (Unaudited)
Capitalized
          Costs
Capitalized
          costs incurred in property acquisition, exploration, and development activities
          as of March 31, 2006 are as follows:
Total
                    capitalized:
Proved
                    properties
$
786,084
Unproved
                    properties
$
4,133,609
Less
                    accumulated depletion
(117,913
)
Net
                    capitalized costs
$
4,801,780
26
Costs
          incurred in oil and gas producing activities for the nine months ended
          March 31, 2006 and 2005 are as follows:
2006
2005
Property
                    acquisition costs
Proved
$
69,259
-0-
Unproved
13,329
-0-
Exploration
                    costs
931,711
-0-
Development
                    costs
607,175
-0-
Results
          of operations for oil and gas producing activities for the nine months
          ended
          March 31, 2006 and 2005 are as follows:
2006
2005
Oil
                    and gas sales
$
329,052
28,002
Production
                    costs
488,788
36,211
Exploration
                    costs
6,101
43,640
Depreciation,
                    depletion and amortization
231,000
80,602
Gain
                    on sale of oil and gas properties
361,193
-0-
Capitalized
          costs incurred in property acquisition, exploration, and development activities
          as of June 30, 2005 (fiscal year end) are as follows:
Total
                    capitalized - unproved properties
$
4,072,503
Less
                    accumulated depletion
-0-
Net
                    capitalized costs
$
4,072,503
Costs
          incurred in oil and gas producing activities for the years ended June 30,
          2005
          and 2004 are as follows:
2005
2004
Property
                    acquisition costs
Proved
$
69,259
-0-
Unproved
13,329
-0-
Exploration
                    costs
931,711
-0-
Development
                    costs
607,175
-0-
27
Results
          of operations for oil and gas producing
          activities for the years ended June 30, 2005 and 2004 are as
          follows:
2005
2004
Oil
                    and gas sales
$
52,008
-0-
Production
                    costs
271,337
-0-
Exploration
                    costs
-0-
-0-
Depreciation,
                    depletion and amortization
-0-
-0-
Gain
                    on sale of oil and gas properties
-0-
-0-
Results
                    of operations for oil and gas producing activities
(219,329
)
-0-
28
NO
          OIL AND GAS RESERVE DATA
We
          do not
          have a report from an independent petroleum engineer. We have not made
          any
          internal estimates of proved developed and undeveloped reserves. The
          determination of oil and gas reserve quantities involves numerous estimates
          which are highly complex and interpretive. Such estimates are subject to
          continuing reevaluation. Reserve quantities may change as additional information
          becomes available. We expect to have a report from an independent petroleum
          engineer completed during the calendar year 2006. We did not sell any gas
          in
          fiscal 2005 or 2006.
USE
          OF PROCEEDS
We
          will
          pay for the cost of registering the shares of common stock in this offering.
          W
e
          will
          not receive proceeds from the sale of our shares by the Selling Stockholders.
          However, we may receive proceeds of up to
$6,610,000
from
          the
          exercise of the warrants overlying some of the common stock only if Cornell
          utilizes the cash method exercise. We will use such proceeds for general
          corporate purposes and working capital in connection with our oil and gas
          operations. We will
use
          the
          proceeds of the debenture for general corporate purposes and working capital
          in
          connection with our oil and gas operations.
Examples
          of the Use of Proceeds:
Warrant
                    Proceeds (if any)(**)
______________________
Source:
Debenture
Minimum
Maximum
Proceeds
                    (*)
Proceeds
Proceeds
Use
Debenture
                    #1
$
1,800,000
                    (received)
General
                    corporate
Debenture#2
$
1,820,000
                    (received)
purposes
                    and
Debenture
                    #3
$
1,820,000
                    (expected)((***)
working
                    capital
Warrant
                    #1
-0-
$
2,387,500
General
                    corporate
Warrant
                    #2
-0-
$
2,502,500
purposes
                    and
Warrant
                    #3
-0-
$
1,720,000
working
                    capital
____________________________
(*)
Net
                    of a 9% fee we pay to an affiliate of
                    Cornell.
(**)
There
                    is no assurance than any warrants will be
                    exercised.
(***)
Expected
                    upon effectiveness of the registration
                    statement.
DESCRIPTION
          OF BUSINESS
Descriptors.
HDY
"
Hyperdynamics
                    Corporation
"
                    is the company listed on the American Stock
                    Exchange.
HYDR
"
HYD
                    Resources
"
                    is the name of a business segment of HDY that is composed of
                    our oil and
                    gas operations in Louisiana.
HYD
"
HYD
                    Resources Corporation
"
                    owns drilling rigs, a workover rig and drilling equipment. HYD
                    is in our
                    HYDR business segment. We own HYD.
TPC
"
Trendsetter
                    Production Company
"
                    is an authorized oil and gas operator in Louisiana. TPC is in
                    our HYDR
                    business segment. We own TPC.
SCS
"
SCS
                    Corporation
"
                    is engaged in oil and gas exploration activities located offshore
                    Guinea, West Africa. We own SCS. SCS is also the name of a business
                    segment of HDY that is composed of our oil and gas exploration
                    activity in
                    Guinea.
SCSG
"
SCS
                    Guinea SARL
" is a Guinea limited liability company located in Conakry,
                    Guinea. We own 65% of SCSG, which was formed to manage the business
                    associated with SCS's farmed out 2002 Oil and Gas Production
                    and Sharing
                    Agreement with the government of the Republic of
                    Guinea.
29
Introduction.
Hyperdynamics
          Corporation ("Hyperdynamics") is a Delaware corporation. At inception we were a
          value added reseller of computer hardware and software. Our business plan
          was to
          develop into a complete service provider of integrated information technology
          services. During the fiscal year ended June 30, 2001, we began to offer
          our
          Integrated Technology Service Provider (ITSP) product, a bundled service
          offering for clients who wished to outsource their information technology
          department in addition to receiving Internet service. We discontinued this
          integrated service beginning in fiscal year 2002, about a year after acquiring
          our subsidiary, SCS Corporation ("SCS"). When we acquired SCS, we decided to
          implement a dramatic change in our business plan. SCS quickly became our
          only
          operating subsidiary. In the summer of 2001, months after the SCS acquisition,
          we began offering products and services targeted specifically to the oil
          and gas
          industry such as seismic data management services, customized geological
          workstations, and data transcription services. Additionally, SCS's management
          had years of experience which included both oil and gas exploration and
          the
          provision of seismic data management services to the oil and gas industry.
          In
          2002, SCS got the opportunity to become involved in an exploration project
          offshore of the Republic of Guinea, West Africa ("Guinea"). Additionally in
          2004, we began exploration and production activities in Louisiana, USA
          through
          our business segment HYD Resources ("HYDR").
In
          2005,
          a misunderstanding arose in connection with our Guinea exploration project.
          We
          believe that the Guinea exploration project dispute will be resolved favorably
          and we have received a letter from the Guinea government to that effect.
          We
          believe that the Guinea exploration project misunderstanding will be resolved
          favorably.
In
          2004,
          we started a new subsidiary, HYD Resources Corporation ("HYD") which owns
          drilling rigs, a workover rig and drilling equipment. We drill oil wells
          in
          proven areas within the United States. Thus far all of our drilling activity
          has
          occurred in Louisiana. Our primary goal for HYDR is to cost effectively
          generate
          domestic production revenues.
We
          continue to use our seismic data management or NuData (sm) services in
          house. In
          fiscal 2005, we copied all the vintage data of the Republic of Guinea from
          nine
          track data tapes to DVD. This software continues to meet our in-house data
          management requirements. Our seismic data management capabilities facilitate
          the
          further analysis and use of the data acquired pursuant to the needs of
          our
          exploration work programs.
Current
          Focus and Direction of Business Plan.
Our
          current business focuses are offshore oil and gas exploration and exploitation
          in Guinea, and onshore production in Louisiana.
Production
          and Sharing Agreement for Exploration Territory Offshore The Republic of
          Guinea
.
          In
          early 2002, SCS management, in association with USOil Corporation of Houston,
          Texas ("USOil") began to evaluate the viability of USOil's oil and gas
          concession off the coast of The Republic of Guinea, West Africa ("Guinea").
          After SCS's review of older seismic data collected from that concession,
          we
          decided that the concession provided a good business opportunity. We negotiated
          an agreement with USOil to revitalize the then dormant 1995 Production
          and
          Sharing Agreement that USOil still had in effect with Guinea. We proposed
          to
          perform a regional seismic data acquisition across the concession using
          modern
          digital technology. USOil agreed to the proposal and the Government of
          Guinea
          was amenable to our proposal and issued permits. SCS proceeded in 2002
          to
          acquire one thousand kilometers of regional two dimensional ("2D") seismic
          lines. In December 2002 USOil negotiated a new Production and Sharing Agreement
          ("2002 PSA") with Guinea. USOil farmed out 100% of the rights and obligations of
          this agreement to SCS. The 2002 PSA gives rights for exploration and production
          across the concession of approximately sixteen million (16,000,000) acres.
          In
          November 2003, SCS acquired another four thousand kilometers of 2D seismic.
          We
          performed our exploration work in Africa under Guinea's Hydrocarbon Development
          Program, which was instituted by President Lansana Conte. During fiscal
          2004 we
          accomplished critical exploration work: a 4000 kilometer 2D seismic data
          shoot,
          the processing of the seismic data acquired, and the evaluation of that
          data and
          data that had been acquired in the past.
Until
          SCS
          began the exploration program, the geological information relating to offshore
          Guinea was scant. The first exploration activity in our concession area
          occurred
          in the 1970s. The technology available for data acquisition and processing
          at
          that time did not reveal geological information with great precision. The
          area
          was not considered as attractive as other areas which more clearly evidenced
          hydrocarbon systems using contemporaneous technology and which were easier
          to
          explore and develop. Accordingly, very little additional exploration work
          occurred on the concession until we began our work in 2002. The general
          economic
          environment has changed dramatically since the 1970s. Today, oil is more
          scarce
          and the price of oil is the highest it has ever been. Exploration and
          development is occurring in certain areas around the world that were previously
          not explored because the cost was perceived to exceed the potential benefits,
          and offshore Guinea had been viewed as an area such as this for many years
          based
          on old geological and geophysical data. We conducted our surveys using
          modern
          technology which more accurately depicts the geological character of the
          area.
          The geological work that we and our vendors have performed supports our
          plan to
          begin drilling exploration wells.
30
The
          regional 2D seismic acquired in 2002 included about 1,000 kilometers of
          new
          data, which we reevaluated during 2004. We used the information from this
          regional data shoot to design a more detailed 2D coverage of a 4,000 kilometer
          grid and we acquired the additional data. During 2004, we completed the
          processing and interpretation of this additional 4,000 kilometers of seismic
          data. This fulfilled our work obligation under the initial exploration
          phase of
          the 2002 PSA.
The
          interpretation and analysis of this data kept us in full compliance with
          our
          required work under the 2002 PSA and began our strategy to exceed minimum
          requirements in support of our commitment to a hydrocarbon discovery. We
          continued our analyses with new and better methods into 2005. This work
          is
          continually providing us with growing evidence in the form of documented
          direct
          hydrocarbon indicators.
In
          2004,
          after completion of the initial processing and reprocessing of our newly
          acquired 4,000 kilometers of digital 2D data, we were able to determine,
          through
          intense detailed analysis and mapping procedures, the existence of direct
          hydrocarbon indicators, including many noted gas seeps sourcing from the
          ocean
          floor in our coverage area. Based on this and the other geological and
          geophysical analysis, we contracted TDI-Brooks International ("TDI") to perform
          an extensive geochemical analysis. In 2004 we obtained a permit from the
          government of Guinea and the geochemical work program began offshore Guinea
          in
          2004. A total of 57 core samples were acquired and delivered back to TDI's
          laboratory at College Station, Texas and an analysis was completed in August
          2004. The results of the coring program added additional evidence supporting
          our
          plan to drill our first exploration wells.
In
          addition to the geochemical analysis, we had originally planned to implement
          a
          three dimensional ("3D") survey in early 2004. We decided to defer the 3D
          survey because we desired to first perform further analysis of our data in
          order to design a more efficient program which would concentrate our efforts
          on
          the most prospective areas in the concession. We contracted with internationally
          known Petroleum Geo-Services ("PGS") to perform a third party detailed and
          comprehensive analysis and interpretation of all our seismic data which
          PGS
          began in July 2004, and PGS presented its preliminary report to us in August
          2004 revealing significant corroborating evidence of hydrocarbons, but
          most
          importantly it clearly expressed agreement with our view that there is
          a well
          defined working petroleum system across the concession in Guinea. PGS gave
          us
          their completed report in December 2004. This report supported our work,
          giving
          us additional corroborating evidence to go forward with drilling in Guinea.
          One
          of the main issues with regard to determining the next step was the
          corroborating evidence of the size of the drilling targets. This confirmed
          our
          belief that the next step should be drilling our first exploration wells
          as
          opposed to spending any more time and money on 3D seismic. Due to the size
          of
          the structures, we determined that we would gain much more by simply spending
          the money to drill. In January 2005, we began looking at ways to put together
          drilling operations. Additionally, we stepped up our communications and
          negotiations with potential oil company working interest partners
          and drilling companies, and we began work to contract drilling platforms to
          use to drill our exploration wells. We refined their work during the first
          half
          of 2005and we focused on four targets in shallow to medium depth water.
          We also
          developed a multi channel strategy to drill wells faster. The first channel
          is
          to partner with oil companies on a working interest basis. The second is
          to
          raise significant private funds and to contract directly with a drilling
          company
          and drilling platform vendors ourselves. The third strategy was to contract
          with
          turn key offshore drilling companies whereby we would direct the drilling
          operations of the contractor.
We
          made
          progress toward this goal and in June 2005, we sent a request for a drilling
          permit to Guinea, through USOil. The request was to obtain a permit to
          drill as
          many as four exploration wells offshore Guinea. In July 2005 we received
          a
          notice from USOil which alleged that the 2002 PSA had been canceled by
          the
          government of Guinea. We disagreed totally with that and filed suit against
          USOil in July 2005. We immediately began working diligently to clear up
          this
          misunderstanding with the Government of Guinea. In August 2005, we hired
          Mr.
          Famourou Kourouma as our new Vice President of Guinea Affairs (we do not
          consider this to be an executive officer position ). Famourou Kourouma
          was born
          and raised in Guinea. He began his work for us in Guinea in August 2005
          with the
          goal being to get us back into a position to begin our Guinea drilling
          program.
          Through Famourou Kourouma's many meetings and contacts with business and
          government officials, including two separate meetings with the Head of
          State,
          support for our issues was sincerely expressed by the government. In September
          2005, Kent Watts, our president, arrived in Guinea to meet with government
          officials who told Kent Watts that the government of Guinea had not terminated
          PSA. The Secretary General Son Excelence of Guinea, Mr. Fode Bangoura,
          told us
          that he was pleased to discuss our issues and that he was very encouraged
          and
          believed that we were the right company for the work. Fode Bangoura then
          said
          that he will begin by reviewing everything in detail and he would discuss
          the
          information with the minister committee and a proposal from the President
          will
          be submitted to the National Assembly for approval.
In
          December 2005, Famourou Kourouma reported that someone in Guinea may have
          misinformed the government about who was doing exploration work that we
          had
          actually performed. Famourou Kourouma reported that we have the support
          of
          Guinea ministers, politicians and President Lansana Conte to begin our
          drilling
          program. The Guinea government now understands the rights we have and the
          work
          we have done. We need to obtain a drilling permit form the government of
          Guinea.
          We can report that we have had conversations with Guinea government officials
          which appear to us to suggest that the government looks favorably on our
          desire
          to start drilling. We have received a letter encouraging dialog form the
          government of Guinea. However, we have not obtained a written drilling
          permit
          yet. The letter dated December 5, 2005 from the government of Guinea to
          us,
          states that the government is currently examining the Sharing and Production
          Agreement (the "PSA") and royalties between the Republic of Guinea and SCS
          Corporation and considers it extremely important, and that the government
          of
          Guinea wishes to work as transparently as possible on this in the interest
          of
          both countries.
In
          September 2005, Mr. Kent Watts, CEO ,and Mr. Kourouma, VPGA, had a private
          meeting at the presidential palace in Conakry, Guinea with the Ministre
          Secretaire General De La Presidence De La Republique De Guinee, Son Excelence
          Mr. Fode Bangoura (referred to as the "MSG"). Our issues pertaining to being
          allowed to continue our work were discussed. First and foremost, the MSG
          emphatically denied that any termination letter had been generated or authorized
          by his office. This means that the termination letter forwarded to us by
          USOil
          and reported in our Form 8-K was a fake and not valid.
31
After
          some additional interpretive dialogue, Mr. Watts and Mr. Kourouma asked
          the
          Secretary General, "what could we report as a summary outcome of our meeting
          together." Mr. Kourouma reported to Mr. Watts the following substantive
          interpretation of the Secretary General's response.
"The
          Secretary General Son Excelence Mr. Fode Bangoura told us that he was pleased
          to
          discuss our issues with us and that he was very encouraged and believed
          that we
          were the right company for the work. He then said that he will begin by
          reviewing everything in detail. Then he will discuss the information with
          the
          minister committee and a proposal from the President will be submitted
          to the
          National Assembly for approval. Once the proposal is approved, the National
          Assembly will issue a legal approval ("projet de lois"). Then he said that he
          will inform us of the approval and at that time he will perform all steps
          necessary to allow us to continue our work."
Seismic
          Data Management Services.
In
          August
          2004, we entered into a contract with Texas Geophysical Company ("TGC") relating
          to its data from Northern Alaska covering an offshore area of the Alaska
          National Wildlife Refuge ("ANWR"). Under this contract, SCS became the sales
          agent and seismic data management provider for TGC's ANWR data. TGC has
          the
          rights to the only 2D seismic data known to cover this area. Should oil
          companies license this data, SCS will perform the data processing and will
          earn
          associated service revenues and a percentage of the license fees.
Development
          of SCS NuData(TM) Management System.
In
          September 2002, we acquired the copyrights and all rights to the source
          code of
          the ONYX and ONYXII related conversion and transcription software. The
          software
          is instrumental in providing the technical capabilities to handle virtually
          any
          type of tape transcription and data conversion service. The ONYX software
          establishes a major competitive advantage for us as a primary component
          for our
          SCS NuData Management System. The ONYX software has been developed over
          the last
          five years and we are in the process of completing the latest version of
          the
          software to take full advantage of Microsoft's 32 bit Operating Systems
          such as
          Windows XP and future 64 bit operating systems. ONYX facilitates over 120
          different tape formats including such common formats like SEG A, B, C,
          or D,
          Western Code 4.2 and 1, Geocore 4, and Tempest. These formats are converted
          to
          the more standard SEG-Y format and then consolidated to DVD. Features of
          the
          NuData Management System in addition to the ONYX based conversion capabilities
          include:
-
A
                    custom and unique tape tracking system tightly monitoring and
                    managing the
                    transcription process and database to organize and keep track
                    of all the
                    data associated with a particular line or area of seismic data.
                    Bundled
                    services to scan well logs, maps and other related information
                    to PDF
                    format and consolidate such related data on the same disk or
                    DVD as the
                    converted seismic data.
-
Strong
                    quality assurance procedures. Data sets are catalogued in the
                    NuData
                    database and then compared to client's database and reconciled
                    to NuData
                    database.
-
Once
                    consolidated on DVD, there are many different data management
                    and backup
                    solutions available, for example, online virtual private network
                    (VPN)
                    access established privately or high speed transmission from
                    Hyperdynamics
                    transcription facility to remote sites across high bandwidth
                    capacity
                    connection.
-
While
                    we maintain the ability to service third party companies, the
                    primary
                    benefit of our NuData capability is to make our exploration activities
                    significantly more efficient.
When
          coupled with our extensive industry experience, the NuData Management System
          allows us to consolidate our seismic data in ways that save substantial
          amounts
          in future data maintenance expenses. We can dramatically enhance our
          accessibility and utility of our seismic data, thereby enhancing our ability
          to
          find new oil and gas reserves faster and at a lower cost. In summary, the
          NuData
          Management System makes the data we manage more secure, accessible, manageable,
          and portable all while saving us significant time and money.
Domestic
          Oil Field Service and Production.
In
          April
          2004, we acquired our new subsidiary, HYD Resources Corporation. It is
          our
          second operating subsidiary with corporate offices located at our home
          office
          in Sugar Land, Texas and one field office located in La Salle Parish
          in Louisiana. HYD Resources Corporation had approximately $375,000 worth
          of
          assets, the bulk of which was oil field equipment. At the time of its
          acquisition, HYD Resources Corporation also had no prior history of operations.
          HYD Resources Corporation drills oil wells in proven areas within the United
          States. Thus far, all of our drilling activity is in Louisiana.
In
          January 2005, Hyperdynamics acquired an inactive company from the
          former owners of HYD Resources Corporation named Trendsetter Production
          Company ("TPC"). TPC is an authorized operator in the state of Louisiana. This
          immediately made us an oil and gas operator.
We
          evaluate the performance of these two companies (HYD Resources Corporation
          and
          Trendsetter Production Company) as a single business unit through our business
          segment named HYD Resources ("HYDR").
One
          of
          HYDR's activities is the acquisition and repair of oil field equipment.
          We can
          then use this equipment to drill for our own oil and gas production, establish
          production facilities, and maintain our producing wells. Because of our
          capabilities to drill and operate, we acquired the working interest on
          614 acres
          in Louisiana. We intend to continue to acquire oil leases in known producing
          areas and drill these leases to increase our own production revenues. We
          can
          acquire onshore producing leases with a very low risk and we can enhance
          the
          production of wells by working over existing wells. We typically sell a
          portion
          of the working interest in our onshore wells.
32
Since
          2005, we have drilled or reworked 16 oil wells on three separate leases.
          While
          drilling our first lease known as the J. W. Norris lease, it was determined
          that
          significant amounts of high pressure gas existed on the lease. As each
          well
          drilled continued to hit additional gas zones, the first twelve wells were
          left
          basically shut-in and it was determined that we would need to install a
          gas
          gathering system, contract with a pipeline transmission company and then
          execute
          a contract with a company to buy our gas. This process to establish a means
          to
          sell our gas began in June 2005 and we signed a contract with Tennessee
          Gas on
          September 2, 2005. We subsequently delivered our contract to sell our gas
          with
          British Petroleum in September 2005. This has enabled us to install a gas
          gathering system and metering equipment to begin selling our natural gas
          reserves. We have not yet sold commercial quantities of gas. We began drilling
          oil wells on the Kelly lease. The first well drilled, Kelly #1 began initially
          with flow rates of approximately 30 barrels per day in July 2005. This
          increased
          to approximately 70 barrels per day in early August and is expected to
          level out
          at around 50 barrels per day. We drilled Kelly # 2 which was completed
          at the
          end of August 2005. While drilling Kelly #1 and Kelly #2, we discovered
          new gas
          zones as well. Since the gas metering equipment for the Norris lease will
          actually be located on the Kelly lease, we believe that drilling additional
          gas
          wells to increase gas production will be much easier and faster once the
          gas
          system is completed.
During
          the 12 months ended June 30, 2006, we sold approximately 15,450 barrels
          of oil
          (not adjusted to reflect the royalty interest or our fractional ownership
          of the
          working interest.
Employees
          and Independent Contractors.
We
          currently have
22
full
          time
          employees and
one
part
          time
          employee of which
13
          people
are
          a
          part of corporate overhead
and
          three
are
          directly associated with SCS and attributable to the exploration and seismic
          data management effort
.
          Seven
          people
are
          focused on
our
          d
omestic
          oil field production
of which
          one person is a manager and 6 people a
re
          hourly
          employees working on oil field workover, production, and shop work. 
Additionally, we use independent contractors to minimize fixed overhead.
          No
          employees are represented by a union and we believe that our labor relations
          are
          good.
Alliance
          Partnerships, Key Vendors and Technical Certifications.
Hyperdynamics
          maintains certifications with Microsoft as a Microsoft Solution Provider
          and
          Great Plains Software as an eEnterprise reseller. Our technical capabilities
          are
          focused on software development such as our new version of ONYX software
          that is
          the part of our NuData (sm) end-to-end seismic data services.
Our
          oil
          industry vendors include the following:
Spectrum
          Geophysical Processing Company ("Spectrum") provides us with professional data
          processing services. Spectrum is a member of a UK registered group of companies
          providing seismic data processing, nonexclusive surveys and electronic
          data
          management services to a wide range of international clients. Spectrum
          has its
          headquarters in Woking, England, with operational centers in Houston and
          Cairo.
Petroleum
          Geophysical Services ("PGS") provides us with seismic acquisition and
          independent data interpretation services. PGS provides a broad range of
          seismic
          and reservoir services, including data acquisition, processing, interpretation,
          and field evaluation. PGS also owns and operates four floating production,
          storage and offloading units (FPSOs). PGS operates on a worldwide basis
          with
          headquarters in Oslo, Norway.
TDI-Brooks
          International ("TDI") provides us with geochemical core analysis of our
          concession.  TDI is the recognized leader in offshore surface geochemical
          exploration and heat flow measurement.
Competition.
A
          large
          number of companies and individuals engage in drilling for gas and oil,
          and
          there is competition for the most desirable prospects. We will encounter
          intense
          competition from other companies and other entities in the sale of our
          oil and
          gas. We could be competing with numerous gas and oil companies which may
          have
          financial resources significantly greater than ours. The quantities of
          oil and
          gas that we may produce and deliver may be affected by factors beyond our
          control, such as the inability of the wells to deliver at the necessary
          quality and pressure, premature exhaustion of reserves, changes in governmental
          regulations affecting allowable production and priority allocations, and
          price
          limitations imposed by Federal and state regulatory agencies.
Key
          Customers.
Oil
          production from our Louisiana properties is purchased by one customer,
          Plains Marketing LLC.
Research
          and Development.
We
          do not
          expend a material amount on research and development.
Cost
          of Compliance with Environmental Laws.
Because
          we are engaged in extracting natural resources, our business is subject
          to
          various Federal, state and local provisions regarding the environment.
          Compliance with environmental laws may necessitate significant capital
          outlays, affect our earnings potential, and cause material changes in our
          current and proposed business activities. At the present time, however,
          the
          environmental laws do not materially hinder nor adversely affect our business.
          Capital expenditures relating to environmental control facilities have
          not been
          material to our operations since our inception. In 2005, we did one oil
          well
          clean up. The cost of the clean up was less than $5,000. We have abided
          by and
          are in compliance with the environmental law. There were no clean ups in
          2006.
33
Recent
          Events.
In
          August
          2005, we hired Mr. Famourou Kourouma as our new Vice President of Guinea
          Affairs. His task is primarily to interface with the Guinea government.
          Famourou
          Kourouma will receive compensation from us in the amount of $2,000 per
          month and
          he may also receive between 200,000 and 400,000 options base upon our relations
          with the government of Guinea.
In
          October 2005, we established SCS Guinea SARL (SCSG"), a Guinea limited liability
          company located in Conakry, Guinea. We own 65% of SCSG, which was formed
          to
          manage the business associated with SCS's farmed out 2002 Oil and Gas Production
          and Sharing Agreement with the government of the Republic of Guinea. Mr.
          Baba
          Kourouma is the General Manager of SCSG. Baba Kourouma is the brother of
          Famourou Kourouma. Baba Kourouma is a citizen of Guinea who is an electrical
          engineer educated in Czechoslovakia. He has owned and managed a trucking
          business that dealt extensively with the government. He currently holds
          and
          manages the contract to manufacture the footwear for the Armed Forces of
          Guinea.
DESCRIPTION
          OF PROPERTY
Description
          of Oil and Gas Properties--Foreign.
We
          are
          engaged in oil and gas operations. In West Africa, offshore Guinea, we
          are engaged in oil and gas geophysical exploration. We have not yet done
          any
          drilling off the coast of Guinea.
[Graphic
          of Map of Offshore Guinea Oil and Gas Leases]
In
          2002,
          SCS management, in association with USOil began to evaluate the viability
          of USOil's oil and gas concession off the coast of Guinea. After SCS's
          review of
          older seismic data collected from that concession, we decided that the
          concession provided a good business opportunity. Thus, we negotiated an
          agreement with USOil to revitalize the then dormant 1995 Production and
          Sharing Agreement that USOil still had in effect with Guinea. We proposed
          to
          perform a regional seismic data acquisition across the concession using
          modern
          digital technology. USOil agreed to the proposal and the Government of
          Guinea
          was amenable to our proposal and issued permits. SCS proceeded in 2002
          to
          acquire one thousand kilometers of regional two dimensional ("2D") seismic
          lines. In 2002 USOil negotiated a new Production and Sharing Agreement
          ("2002
          PSA") with Guinea. USOil farmed out 100% of the rights and obligations of this
          agreement to SCS. This 2002 PSA gives exclusive rights for exploration
          and
          production across the concession of 16 million acres.
In
          2003,
          SCS acquired another four thousand kilometers of 2D seismic. The 2003 seismic
          data was processed by Spectrum Energy Information and Technology. In 2004,
          we
          engaged Petroleum Geo Services to perform an independent evaluation of
          our
          seismic data. In we hired TDI Brooks to perform a seabed coring program
          and in
          November of 2004, we employed Infoterra to conduct a satellite seep study
          offshore Guinea. In January of 2005, we deployed PrimeView to further analyze
          our seismic data through a technique known as attribute analysis. The
          culmination of all of this effort and expense was evident when in 2005
          we sent a
          request for a drilling permit to Guinea, through USOil Corporation. The
          request
          was to obtain a permit to drill as many as 4 wells offshore Guinea.
The
          minimum remaining term of our Guinea farmout is described as follows: If a
          well is not drilled by December 2, 2005, then SCS Corporation will be granted
          an
          extension until December 2, 2006 to drill a well. If a well is not drilled
          by
          December 2, 2006, then SCS will relinquish our entire concession of 16
          million
          acres. If a well is drilled by December 2, 2006, then SCS will have until
          December 2, 2011 to drill additional wells and evaluate areas for exploitation.
          Once we determine an area to be capable of commercial production, SCS can
          secure
          it as an "Exploitation Area" of a simple geometrical shape of 50 km x 50 km with
          a payment of one million dollars to the Republic of Guinea. The Exploitation
          Area is held for 35 years for each well drilled in its boundaries. SCS
          can have
          multiple Exploitation Areas. After December 2, 2011, SCS will surrender
          all
          acreage to the Republic of Guinea with the exception of the Exploitation
          Areas.
The
          above
          would be the case if there had been no interruption to the work. However,
          a
          dispute arose when we asked Guinea for a drilling permit. If we take a
          legal
          position with respect to the dispute, regarding the timing of the work,
          part of
          our claim will include that we have been prevented from performing our
          work and
          thus the time to perform will need to be adjusted and extended accordingly
          once
          we are allowed to continue.
Description
          of Oil and Gas Properties--Domestic.
Beginning
          in 2004, in Louisiana (onshore), we started drilling for and produced oil.
          During that time we also started drilling for gas, sometimes in the
          sa
me
          borehole as was drilled for oil. As of June 26, 2006, we drilled in Louisiana
          an
          aggregate of 8 wells, and reworked 8 shut in wells that predate our acquisition
          of the leases. We finance our Louisiana drilling and production operations
          from
          internal resources and by selling some of the working interest in oil and
          gas
          leases to investors, while retaining a portion of the working interest for
          ourselves.
Our
          domestic energy operations are conducted by our business segment HYD Resources
          (HYDR"). HYDR provides drilling, work over and construction services internally
          and to third parties. It also leases and operates oil properties. HYDR
          has
          approximately 698 acres of land under lease for oil and gas development.
          Of this
          total, leases held by production total approximately 258 acres . We have
          70%
          working interest on the Kelly and Norris leases, and a 100% working interest
          on
          the two
Magee
          Smith
leases
          in
          La Salle Parish, Louisiana that are currently producing oil.
[Graphic
          of Map of Louisiana Oil and Gas Leases]
34
Reserves
          Reported To Other Agencies.
We
          did
          not report any estimates of total, proved net oil or gas reserves to any
          other
          Federal authority or agency.
Production.
The
          average sales price (including transfers) per unit of oil produced in fiscal
          2006 was $53.61 per barrel. We have not yet produced or sold any gas in
          commercial quantities.
Lifting
          Costs.
The
          average production cost (lifting cost) per barrel of oil produced in fiscal
          2006
          was $30.19 per barrel. We expect this cost to decrease as additional production
          is brought online.
Productive
          Crude Oil Wells and Natural Gas Wells.
The
          number of productive crude oil and natural gas wells in which we held an
          interest as of June 30, 2006 was as follows:
2006
(1)
Gross
(2)
Net
Crude
                      Oil Wells:
United
                      States
Onshore
16
12.4
International:
Guinea
Offshore
0
0
Total
16
12.4
___________________________________
(1)
Productive
          wells are producing wells and wells capable of production. A gross well is
          a well in which a working interest is owned. The number of gross wells
          is the
          total number of wells in which a working interest is owned.
(2)
A
          net
          well is deemed to exist when the sum of fractional ownership
          working interests in gross wells equals one. The number of net wells is the
          sum of the fractional working interests owned in gross wells expressed as
          whole numbers and fractions thereof. One or more completions in the same
          borehole are counted as one well in this table.
Acreage.
The
          developed and undeveloped acreage (including both leases and concessions)
          that
          we held as of June 30, 2006 are as follows:
Developed
                    Acreage (1) (2)
Undeveloped
                    Acreage (2) (3)
Location
Gross
                    Acres
Net
                    Acres
Gross
                    Acres
Net
                    Acres
United
                    States
Onshore
Louisiana
258
178
440
365
Foreign
Offshore
Guinea
0
0
16,000,000
13,120,000
Total
258
178
16,000,440
13,120,365
35
_________________________________
(1)
Developed
          acreage is acreage spaced or assignable to productive wells.
(2)
A
          gross
          acre is an acre in which a working interest is owned. A net acre is deemed
          to exist when the sum of fractional ownership working interests in gross
          acres
          equals one. The number of net acres is the sum of the fractional working
          interests owned in gross acres expressed as whole numbers and fractions
          thereof.
          Undeveloped acreage is considered to be those leased acres on which wells
          have
          not been drilled or completed to a point that would permit the production
          of
          commercial quantities of crude oil and natural gas regardless of whether
          or not
          such acreage contains proved reserves.
(3)
Included
          within undeveloped acreage are those leased acres (held by production under
          the terms of a lease) that are not within the spacing unit containing,
          or
          acreage assigned to, the productive well so holding such lease.
Net
          Exploratory and Development Wells.
The
          following table sets forth, as of June 30, 2006, the number of net exploratory
          and development wells we drilled thus far since 2005. An exploratory well
          is a
          well drilled to find and produce crude oil or natural gas in an unproved
          area,
          to find a new reservoir in a field previously found to be
productive
          of crude oil or natural gas in another reservoir, or to extend a known
          reservoir. A development well, for purposes of the following table is a
          well
          drilled within the proved area of a crude oil or natural gas reservoir
          to the
          depth of a stratigraphic horizon known to be productive. The number of
          wells
          drilled refers to the number of wells completed at any time during fiscal
          2006,
          regardless of when drilling was initiated. Completion refers to the installation
          of permanent equipment for the production of crude oil or natura
l
          gas, or
          in the case of a dry hole, to the reporting of abandonment to the appropriate
          agency.
Net
                      Exploratory Wells
Net
                      Development Wells
Productive
                      (1)
Dry
                      (2)
Productive
                      (1)
Dry
                      (2)
Year
                      Ended June 30, 2006
US
Int'l
US
Int'l
US
Int'l
US
Int'l
0
0
1
0
8
0
0
0
____________________________
(1)
A
                    productive well is an exploratory or development well that is
                    not a dry
                    hole.
(2)
A
                    dry hole is an exploratory or development well determined to
                    be incapable
                    of producing either crude oil or natural gas in sufficient quantities
                    to
                    justify completion as an oil or gas
                    well.
Drilling
          In Progress
At
          June
          26, 2006, there was no drilling in progress.
Delivery
          Commitments--Offshore Guinea.
When,
          if
          and as there is production in Guinea that falls under the terms of the
          2002 PSA,
          a 15% royalty will be paid to the Republic of Guinea and 3% will be paid
          to
          USOil subject to our litigation with them.
Delivery
          Commitments--Onshore Louisiana.
We
          have
          no domestic delivery commitments.
Description
          of Physical Facilities--Description of Operations Center in
          Louisiana.
We
          own .7
          acre of highway frontage land containing a metal building of approximately
          7,000
          square feet that we use for our oil and gas operations in Jena, Louisiana.
          In
          December 2005, we paid $52,330 for this property. The property is well
          located
          and well suited to facilitate the organization and mobilization of our
          oil and
          gas drilling and production in Louisiana.
Description
          of Physical Facilities--Description of Administrative Office
          Property.
Our
          executive and administrative offices are located at One Sugar Creek
          Blvd., Suite 125, Sugar Land, Texas 77478 where we lease 6,752 square feet
          of space. The lease term is 65 months beginning on February 1, 2006 or
          our move
          in date. The space is presently being remodeled for us. We will get 5 months
          of
          free rent.  We have prepaid 3 months of rent and given the landlord a
          $75,000 letter of credit for 18 months to secure the cost of the build-out.
          The
          letter of credit will be released after 18 months. The monthly rent is
          $10,972
          per month. As of June 26, 3006, the buildout has not been
          completed.
36
LEGAL
          PROCEEDINGS
Dixon
          Financial Services.
In
          2001,
          we were named as a defendant in a lawsuit styled Dixon Financial Services,
          Ltd.
          v. Fidelity Transfer Company, Erin Oil Exploration, Inc., Bill Knollenberg,
          Ron
          Bearden, R.F. Bearden Associates, Inc., James Chang, Nick H. Johnson, Riley
          L.
          Burnett, Jr., Johnson, Burnett & Chang, L.L.P., Greenberg, Peden, Siegmyer
& Oshman, P.C., George Siegmyer and Hyperdynamics Corporation; Cause No.
          2001-06263; In the 215th Judicial District Court of Harris County,
          Texas.
This
          suit
          alleged breach of contract for failure to deliver share certificates in
          the name
          of Dixon Financial Services for 574,500 shares of our stock which were
          held in a
          nominee name. In 2000, The Erin Oil Exploration parties, including their
          attorneys, brought suit against us, wrongfully claiming that the shares
          were
          subject to their claims against other persons and obtained a temporary
          restraining order preventing the transfer of the shares. Fidelity Transfer,
          as
          our transfer agent, refused to transfer the shares to Dixon because of
          the
          restraining order. We set aside the temporary restraining order as to the
          shares
          and the shares were not subject to a later temporary injunction. However,
          legal
          counsel for the Erin Oil parties wrongfully asserted to Fidelity Transfer
          that
          the shares were subject to the injunction and Fidelity Transfer refused
          to
          transfer the shares to Dixon Financial for a period of at least three months
          during which the share price dropped from more than $6.00 a share to slightly
          more than $1.00 per share. We and Dixon Financial brought claims against
          the
          Erin Oil parties and their legal counsel for their wrongful conduct. The
          Erin
          Oil legal counsel asserted a litigation privilege under Texas law. The Erin
          Oil parties and their legal counsel filed motions for summary judgment
          asserting
          the litigation privilege as a bar to liability. The trial court granted
          all such
          motions for summary judgment.
Fidelity
          Transfer asserted that it was not subject to jurisdiction in Texas and
          we
          determined that Fidelity Transfer was not currently solvent for purposes
          of any
          judgment against it in this matter. Fidelity Transfer is no longer a party
          to
          this lawsuit at this time, but we have a formal agreement allowing us to
          pursue
          recovery against Fidelity Transfer at a later time.
At
          the
          end of April 2005, we and Dixon Financial entered into an agreement to
          settle
          and resolve this litigation. The agreement provides, among other things,
          that
          since the claims of both Dixon Financial and us against the Erin Oil parties
          and
          their legal counsel are similar, that we will bear the cost of appealing
          the
          summary judgments granted to the Erin Oil parties on the litigation privilege
          defense to liability. The agreement further provides that we agree to a
          judgment
          in the amount of $2,015,264 for the failure to deliver the shares into
          the name
          of Dixon Financial. However, Dixon Financial has agreed that it will not
          abstract or otherwise seek to enforce the agreed judgment, except in the
          event
          that the appeal is unsuccessful or the Erin Oil parties are determined
          not to be
          liable for any other reason. If the appeal is unsuccessful, we and Dixon
          Financial have agreed that we will pay the sum of $240,000 payable in the
          amount
          of $10,000 per month for a period of 24 months. This agreement is subject
          to
          court approval. We reasonably believe that our liability, if any, will
          not arise
          prior to January 2007. In the event that the appeal is successful, we will
          not
          be obligated to pay any amount of money other than legal fees and expenses.
          If
          the appeal is successful, we will seek to recover our damages and costs
          from the
          Erin Oil parties and their legal counsel. The Erin Oil parties' legal counsel
          has insurance which has been providing a defense and which may pay for
          any
          liability awarded against the Erin Oil parties' counsel.
The
          proposed agreed judgment described above was submitted to the court in
          May 2005.
 As of June 23, 2006, the judge had not signed the agreed
          judgment.
Wellington,
          LLC.
On
          April
          9, 2001, we were named as a defendant in a lawsuit styled Wellington, LLC
          vs.
          Hyperdynamics Corporation et al. Civil Action# 18811-NC, The Court of Chancery
          of Delaware.
The
          Plaintiff claims that we did not carry out conversion of Series A preferred
          stock to common stock. On August 9, 2002 Plaintiff, Defendant, and their
          respective counsels executed an "Agreement for Transfer of Claims in Delaware
          Action to Georgia. Subsequently, the lawsuit was moved in its entirety
          to
          Atlanta, Georgia to be litigated under the lawsuit discussed below. Under
          the
          agreement, the Plaintiff in the Delaware action, Wellington, LLC. would
          become
          the Defendant in Atlanta. During the fiscal year ended June 30, 2004, the
          Court
          of Chancery of Delaware dismissed the Delaware case.
On
          November 5, 2001, we filed a lawsuit styled Hyperdynamics Corporation,
          Plaintiff, v. J.P. Carey Securities, Inc., J.P. Carey Asset Management
          LLC,
          Joseph C. Canouse, John C. Canouse, James P. Canouse, Jeffrey Canouse,
          Southridge Capital Management LLC, Stephen Hicks a/k/a Steve Hicks, Thomson
          Kernaghan & Co., Limited, Mark Valentine, Talya Davies, Cache Capital (USA),
          L.P., Carpe Diem, Carpe Diem LTD., Wellington, LLC, Minglewood Capital,
          LLC,
          Falcon Securities, LTD, Navigator Management LTD., David Sims, and Citco
          Trustees (Cayman) Limited, Defendants; and Wellington LLC,
          Counterclaim/Third-Party Plaintiff, v. Hyperdynamics Corporation, a Delaware
          corporation, Kent Watts, Michael Watts, Robert Hill, Harry J. Briers, DJX,
          Ltd.,
          a Belize corporation, and Does 1-10, Counterclaim/Third-Party Defendants,
          Civil
          Action File No. 2001CV44988, In The Superior Court of Fulton County, State
          of
          Georgia.
We
          filed
          our First Amended Complaint against Defendants on September 12, 2002 in
          which we
          presented thirteen counts for Causes of Action against defendants including
          "Violations of Georgia Racketeer Influenced and Corrupt Organizations" (RICO)
          Act (O.C.G.A. SS 16-14-1, ET SEO).
We
          believe that more than one of the Defendants worked together to create
          the
          appearance of providing initial long term financing ($3,000,000) and additional
          financing commitments (up to additional $5,000,000), all from reputable
          sources,
          while the Defendants' real plan was to manipulate our stock through
          contractually prohibited short selling and multiple breaches of the
          contractually agreed to selling covenants.
37
We
          are
          subject to counterclaims in this Georgia litigation. The counterclaimants
          allege
          that Hyperdynamics and its Officers and Directors breached their fiduciary
          duties to shareholders and committed other tortuous acts. We intend to
          continue
          to vigorously pursue damages and defend all counterclaims. Discovery is
          being
          primarily focused on jurisdictional issues at this time. During the litigation
          we have made numerous claims of discovery abuse resulting in certain defendants
          and defense attorney's involved being sanctioned by the court. They have
          filed
          for sanctions against us as well. The court dismissed all non-Georgia
          defendants. We have filed a notice of appeal of that ruling.
USOil
          Corporation.
On
          July
          29, 2005, our wholly owned subsidiary filed a lawsuit styled SCS Corporation,
          Plaintiff v. USOil Corporation, Defendant; Cause No. 2005-49205; in the
          333rd
          Judicial District Court of Harris County, Texas. We allege breach of contract,
          fraud, negligent misrepresentation, and we seek a declaratory judgment.
We
          have
          added two defendants, DINESH SHUKLA and
JOSEPH
          R.
          DELAWA.
We have
          also filed a Motion to Compel against US OIL that is currently pending
          requesting additional documents.
We have
          also propounded discovery to Shukla.
Trendsetter
          Investors, LLC
On
          March
          8, 2006, a lawsuit was filed against us styled Trendsetter Investors, LLC,
          Plaintiff vs. Hyperdynamics Corporation, Trendsetter Production Co., Kent
          Watts,
          Michael Watts, Christopher Watts and Harry Briers, Defendants; Civil Action
          No.
          H 06-0746; in the United States District Court for the Southern District
          of
          Texas, Houston Division.
The
          Plaintiff alleges Fraud or Deceit in the Sale of Securities, Common Law
          Fraud,
          Fraud by Omission and Control Person Liability. Plaintiff seeks unspecified
          monetary damages. We deny all their allegations and are vigorously defending
          ourselves. We have filed a motion to dismiss on behalf of all defendants.
          The
          case is currently stayed by the Court pending a ruling on these motions
          to
          dismiss. We believe this plaintiff's shareholders are one and the same
          as the
          members of a control group (the "Manning Group") led by Mr. Jack Manning.
          Manning is a Houston based attorney and has been a supporter of Hyperdynamics
          Corporation in the past. In private equity deals since April of 2003, he
          and his
          group have purchased common stock in the price range of $.15 to $.80 per
          share.
          We believe that the Manning Group through the circumstances surrounding
          the
          Trendsetter LLC working interest investment, has an agenda to unjustly
          enrich
          themselves through our securities. We are considering counter claims against
          Trendsetter LLC and each member of the Manning Group. We have significant
          concerns that they collectively have or have had over 10% of our common
          stock
          and they have been acting in concert, making them an undisclosed affiliate
          group.
Manning,
          Moore, Long
On
          May 5,
          2006 a lawsuit was served styled Jack Manning, Sue Manning, Stephen Moore
          and
          Geoffrey Long, Plaintiffs versus Hyperdynamics Corporation and Kent Watts,
          defendants. The suit was filed in the 189th District Court of Harris County,
          Texas with cause no. 2006-22135. The Plaintiff alleges they had the pre-emptive
          right to invest in Hyperdynamics Corporation's common stock. We deny all
          their
          allegations and will vigorously defend ourselves and are evaluating all
          possible
          counter claim actions. We believe this lawsuit is tied to the Trendsetter
          LLC
          litigation discussed above, and is a part of their groups' concerted attack
          on
          the company as a strategy to receive undue enrichment in the form of our
          common
          stock. We have exchanged the first round of written discovery and intend
          to
          conduct additional discovery, including depositions.
Of
          far
          more importance to us is that this group may have been or is now acting
          together
          in concert since as far back as April 2003 when they funded a bridge loan
          and
          collectively invested and purchased 2,878,969 shares of common stock. At
          that
          time there was approximately 27,000,000 shares of common stock outstanding.
          This
          would have given them greater than 10% of the outstanding common stock
of the
          company. In review of our records, during the period of time between October
          of
          2003 through approximately the end of March of 2004, this group dramatically
          increased their holdings of Hyperdynamics Corporation's common stock. Based
          on
          concerted actions since then, we are seriously evaluating all corroborating
          information concerning the possibility that their group is an undisclosed
          affiliate of Hyperdynamics Corporation.
38
MANAGEMENT'S
          DISCUSSION AND ANALYSIS
CAUTIONARY
          STATEMENT ON FORWARD-LOOKING INFORMATION
We
          are
          including the following cautionary statement to make applicable and take
          advantage of the safe harbor provision of the Private Securities Litigation
          Reform Act of 1995 for any forward-looking statements made by us, or on
          our
          behalf. This prospectus contains forward-looking statements. Forward-looking
          statements include statements concerning plans, objectives, goals, strategies,
          expectations, future events or performance and underlying assumptions and
          other
          statements, which are other than statements of historical facts. Certain
          statements contained herein are forward-looking statements and, accordingly,
          involve risks and uncertainties, which could cause actual results or outcomes
          to
          differ materially from those expressed in the forward-looking statements.
          Our
          expectations, beliefs and projections are expressed in good faith and we
          believe
          them to have a reasonable basis, including without limitations, our examination
          of historical operating trends, data contained in our records and other
          data
          available from third parties, but there can be no assurance that our
          expectations, beliefs or projections will result or be achieved or accomplished.
          In addition to other factors and matters discussed elsewhere herein, the
          following are important factors that, in our view, could cause actual results
          to
          differ materially from those discussed in the forward-looking statements:
          our
          ability to respond to changes in the information system environment,
          competition, the availability of financing, if available, on terms and
          conditions acceptable to us, and the availability of personnel in the future.
          We
          have no obligations to update or revise these forward-looking statements
          to
          reflect future events.
Our
          fiscal year end is June 30.
Results
          of Operations --- Reportable segments.
Hyperdynamics
          has two reportable segments: Our operations in Guinea and our Louisiana
          operations ("HYDR"). SCS is engaged in oil and gas exploration activities
          pertaining to offshore Guinea, West Africa. Additionally, it provides seismic
          data transcription and management services to support its activities and
          to
          external customers. The seismic data work is performed in the USA. HYDR
          is
          engaged in oil and gas exploration and production activities in Louisiana,
          USA.
          HYDR also provides some oilfield services to external customers. Hyperdynamics
          evaluates performance based on profit or loss from operations. The reportable
          segments are managed by separate management teams who are evaluated based
          on
          their segment's performance
By
                    Segment.
Year
                    ended June 30,
Year
                    ended June 30,
2005
2004
%
                    Change
2004
2003
%
                    Change
Revenues
SCS
3,140
18,314
(83
%)
18,314
450,831
(96
%)
HYDR
169,259
9,974
**
                    (2
)
9,974
0
**(1
)
Corporate
300
10,056
(97
%)
10,056
17,191
(42
%)
Total
                    Revenues
$
172,699
$
38,344
350
%
$
38,344
$
468,022
(92
%)
Note:
**  (1)
          There were no adequate results to compare in 2003 for HYDR.
**
          (2)
          Data only reflects two months of operation in 2004 and is not
          comparable.
Based
          on
          the factors discussed for each segment below for the three months ended
          March
          31, 2006, our net loss chargeable to common shareholders for 2006 increased
          $1,708,643 or 154% to ($2,820,084) or ($.06) per basic and diluted loss
          per
          common share. This compares to ($1,111,441) or ($.03) per basic and diluted
          loss
          per common share for the three months ended March 31, 2005. The net loss
          chargeable to common shareholders includes a provision for preferred stock
          dividends of $27,500in 2006 compared to $27,250 in 2005.
During
          the three months ended March 31, 2006, we realized increasing oil production
          revenues of $134,234 with $-0- service revenue compared to $28,002 oil
          production revenue and $-0- in service revenue for the three months ended
          March
          31, 2005. Revenues are not directly comparable as the focus of the company
          over
          the last year has shifted towards building production revenue and away
          from
          service revenue. The increase in net losses for March 31, 2006 is primarily
          attributed to an increase in cost of maintaining and repairing our production
          facilities in preparation for bringing newly anticipated oil and natural
          gas
          production online. Cost of revenues decreased to $241,249 for the three
          months
          ended March 31, 2006 compared to $266,027 for March the three months March
          31,
          2005. This $24,249 or 9% increase due to the billing of recoverable drilling
          costs to our working interest partners. General and administrative expenses
          were
          $1,018,039 and $804,577 for the three months ended March 31, 2006 and March
          31,
          2005, respectively. The increase of $213,462 is primarily due to the
          establishment of a reserve for uncollectible working interest billings
          in the
          amount of $201,784 during the quarter as a result of a lawsuit filed by
          one of
          our working interest holders.
39
The
          following tables summarize balance sheet and income statement data about
          Hyperdynamics' reportable segments and corporate overhead for the three
          months
          ended March 31, 2006 and 2005.
SCS
HYDR
Corporate
Total
As
                    of March 31, 2006:
Segment
                    assets
$
4,274,928
1,226,819
202,981
5,704,728
3
Three
                    months ended March 31, 2006
Revenues
                    from external customers
Revenues
                    from external customers
-
134,234
-
134,234
Depreciation,
                    depletion and amortization
8,019
142,808
8,032
158,859
Loss
                    from operations
(180,965
)
(802,562
)
(662,108
)
(1,645,635
)
Expenditures
                    for long-lived assets
2,629
174,474
3,813
180,916
As
                    of March 31, 2005:
Segment
                    assets
4,074,834
1,480,284
722,152
6,277,270
Three
                    months ended March 31, 2005
Revenues
                    from external customers
-
28,002
-
28,002
Depreciation,
                    depletion and amortization
7,243
12,669
4,465
24,377
Loss
                    from operations
(112,903
)
(329,705
)
(622,118
)
(1,064,726
)
Expenditures
                    for long-lived assets
137,114
427,331
-
564,445
Product
                      and services information
Quarter
                      Ended March 31,
2006
2005
Revenues
                      from:
$
-
$
-
Seismic
                      data management
-
-
Computer-related
                      sales
-
-
Oilfield
                      services
-
-
Oil
                      and gas production
134,234
28,002
Totals
134,234
28,002
Results
          of Operations --- Louisiana Operations ("HYDR")
Comparison
          for Fiscal Year 2005 and 2004
Revenues
.
           Our prior year revenue reflects only two months of operation. Accordingly,
          we are not able to compare the results for this segment. Our revenues in
          2004
          were $9,974 compared to $169,259 in 2005, which includes $52,008 from oil
          production and $117,251 from oilfield service work for 2005. The oilfield
          service work was performed during the six months ended December 31, 2004.
          Since
          that time, our workover crew has been devoted to improving our oil and
          gas
          properties, and we expect them to continue to provide internal services.
          We
          expect to derive our future revenues primarily from oil production and
          not from
          the provision of oilfield services.
In
          2005,
          our cost of revenue comprised of approximately $80,000 of costs associated
          with
          oilfield service work, $271,337 associated with oil production revenues,
          and
          $859,608 of general field expenses. The breakdown for this expense is
          derived from the costs associated with startup costs, repairs and maintenance,
          tools and yard cost, equipment and service contracts of approximately $602,917,
          and $256,691 in operational salaries and contract labor.
40
Additionally,
          we incurred selling, general and administrative expenses of approximately
          $372,666 and $133,357 attributable to administrative payroll costs. Our
          other significant expenditures were professional fees, such as consulting,
          legal
          and accounting of $62,090, workman's compensation and insurance expenses of
          $76,668, bad debt expense of $34,368, office and administrative expenses
          of
          $66,182 and depreciation and amortization of $77,370. Our loss from operations
          for the year ended June 30, 2005 from this segment was ($1,508,093) and
          ($92,232) in 2004 which only reflects two months of operation for this
          segment.
Comparison
          for Fiscal Year 2004 and 2003
Revenues
.
           Our revenues in 2004 were $9,974 and there are no 2003 results for HYDR
          to
          compare.
Selling,
          General and Administrative Expenses.
There
          are no 2003 results for HYDR to compare for this segment.
Loss
          from Operations.
There
          are no 2003 results for HYDR to compare for this segment.
Results
          of Operations --- Guinea And Seismic Data Management
          ("SCS")
Comparison
          for Fiscal Year 2005 and 2004
Revenues.
We
          had revenues of $3,140 from this segment in 2005 and $18,314 in 2004,
          respectively. The lack of revenues is attributable to the decrease of internal
          seismic data processing work sine we have focused on the acquisition of
          seismic
          data for our concession in Guinea. Cost of revenues increased 19% from
          $58,432
          in 2004 to $69,480 in 2005.
We
          have
          processed a portion of some data that we have the right to market in order
          to
          provide samples of the data to our prospects. When we sell the right to
          use this
          data, we will receive a fee and we will also be compensated for processing
          the
          data that we sell.
Selling,
          General and Administrative Expenses.
We
          had an increase of 23%, from $343,256 in 2004 to $423,558 for 2005 for
          selling,
          general and administrative expenses. The selling expenses increased 102%
          from
          $18,556 in 2004 to $37,522 in 2005 due to an addition of staff and 6801%
          increase in general and administrative expenses relating to the purchase
          of
          additional health insurance coverage for new employees from $349 in 2004
          to
          $24,083 in 2005. An increase of 175% on other taxes, particularly the Franchise
          Tax Board assessment, which was $5,000 higher than 2004. Utility use also
          rose
          31% from $35,926 in 2004 to $47,170 in 2005 due to a higher electric
          consumption. The office expenses increased 38% from $17,369 in 2004 to
          $24,051
          in 2005 due to more conference participation by personnel. Our travel expenses
          increased 40% from $48,406 in 2004 to $67,793 in 2005 due to multiple trips
          to
          London and Africa in connection with the Guinea concession.
Our
          other
          significant expenditures include professional fees which reflect an increase
          of
          305% due to accounting costs related to the fairness opinion for a preferred
          stock paydown matter. Our depreciation and amortization increased 18% from
          $24,248 in 2004 to $28,499 for year ended 2005.
Loss
          from Operations
.
          Based
          on the factors discussed above, our loss from operations from this segment
          increased 30% from ($407,622) in 2004 to ($528,617) in 2005.
Comparison
          for Fiscal Year 2004 and 2003
Revenues.
Our
          revenues in 2004 and 2003, were $18,314 and $450,831, respectively. The
          change
          is primarily due to a decrease in internal seismic data processing work.
          We have
          focused on the acquisition of seismic data for our Guinea concession. Our
          cost
          of revenues decreased 636% from $371,666 in June 2003 to $58,432 in June
          2004.
          The decrease is primarily due to decline in high contribution margin
          transcription work and the necessity to maintain level of operational
          personnel.
Selling,
          General and Administrative Expenses.
We had
          an increased of $20,698 in 2004, from $322,557 in 2003. The change is primarily
          due to the increase in travel expenses associated with our Guinea
          concession.
We
          experienced impairment losses of $350,000 on goodwill during 2003 and no
          impairment in 2004. Our depreciation and amortization increased 61% from
          $15,080
          in 2003 to $24,248 in 2004 due to the increased cost basis on our
          asset.
Interest
          Expense.
Our
          interest expense increased $231,802 in 2004 from $0 in 2003, due to accretion
          of
          interest on the mandatorily redeemable preferred stock.
Loss
          form Operations
.
          Based
          on the factors discussed above, our loss from operations from this segment
          in
          2004 and 2003 is ($407,622) and ($609,821) respectively. This represents
          a
          decrease of $202,199.
Results
          of Operations --- Corporate Overhead
Comparison
          for Fiscal Year 2005 and 2004
Revenues.
We
          continue to receive occasional revenues from our prior value added reselling
          and
          computer consulting business. When this occurs, we classify the revenue
          to
          corporate overhead. This revenue was $300 for the year ended June 30, 2005
          and
          $10,056 for the year ended June 2004, thus a 97% decline in revenues for
          2005.
          We do not actively pursue revenues of this nature and they occur very
          irregularly.
Our
          cost
          of revenues decreased from $81,356 in 2004 to $68,104 in 2005. We classify
          certain computer expenditures and our system engineer's payroll costs as
          cost of
          revenues attributable to corporate overhead. The 15% difference in cost
          of
          revenues is attributable to the cost of the computer equipment purchased
          and
          resold in June 2005.
Selling,
          General and Administrative Expenses.
Selling,
          general and administrative expenses increased by $392,750, from $2,410,441
          in
          2004 to $2,803,191 in 2005. This represents an increase of 16% and is due
          to
          equity-based compensation costs.
Equity-based compensation costs
          were approximately $300,000 higher in the year ended June 30, 2005 than
          in the
          comparable period of 2004. This year's expense related to equity-based
          compensation to four consultants of $1,833,086 derives from the vesting
          of
          800,000 warrants to purchase common stock at an exercise price of $0.50
          per
          share. During the year ended June 30, 2004, 2,000,000 warrants were granted
          to
          four consultants and 800,000 warrants vested during that year. Additionally,
          800,000 warrants vested during fiscal 2005. 200,000 warrants are scheduled
          to
          vest during fiscal 2006. We record the expense associated with these warrants
          using the fair value of the warrants as of the date they vest as estimated
          by
          the Black-Scholes option pricing model. Thus, provided that the agreements
          are
          not terminated (which would result in the forfeiture of the unvested warrants),
          we will incur expense related to these warrants each quarter for the next
          three
          quarters and the expense will vary based upon the market price of our common
          stock in each quarter. Equity-based compensation does not impact our liquidity
          or net worth because the consulting expense is offset by an increase to
          additional paid-in capital.
Additional
          factors affecting the increase of selling, general and administrative expenses
          is attributable to the purchase of added coverage for the Directors and
          Officers
          indemnity insurance, an increase of $99,865 from $14,962 in 2004. The insurance
          policy has been in force since April 2004. Our general office expenses
          increased
          from $49,319 in 2004 to $158,327 in 2005 due to American Stock Exchange
          listing
          fees of $65,000 and higher expenses for the annual shareholder meeting.
          Based on
          the factors discussed above, the loss from operations attributable to
          corporate overhead increased from ($2,617,060) in 2004 to
          ($2,863,195) in 2005.
Other
          Items
Interest
          Expense.
Interest
          expense decreased from $474,463 in the year ended June 30, 2004 to $316,034
          in
          the year ended June 30, 2005. The interest expense during fiscal 2004 consisted
          of approximately $250,000 attributable to the Notes Payable, due December
          31,
          2007 and $230,000 of accretion on mandatorily redeemable preferred stock.
          These
          notes payable were converted during the year ended June 30, 2004. The interest
          expense during 2005 consisted of accretion of interest on mandatorily redeemable
          preferred stock and a loss on the retirement of the preferred
          stock.
41
Net
          Loss.
Based
          on the factors discussed for each segment, the Net Loss chargeable to common
          shareholders increased $1,666,748, or 45% from ($3,677,822), or( $.12)
          per share
          in 2004 to ($5,344,570), or ($.13) per share in 2005. The net loss chargeable
          to
          common shareholders includes a provision for preferred stock dividends
          of
          $186,779 in 2004 and $128,445 in 2005. The negative results are due to
          the
          factors discussed above.
Comparison
          for Fiscal Year 2004 and 2003
Revenue.
The
          revenue for 2004 and 2003 was $10,056 and $17,191, respectively. Our cost
          of
          revenues decreased by $16,135, from $97,491 in 2003 to $81,356 in
          2004.
Selling,
          General and Administrative Expenses.
Selling,
          general and administrative expenses increased by $1,262,423, from $1,532,565
          in
          2003 to $2,794,988 in 2004. This represents an increase of 82%. This occurred
          because effective
October 1, 2003, Hyperdynamics adopted the fail value
          recognition provisions of FASB statement 123, Accounting for Stock-Based
          Compensation. We adopted FASB Statement 123 using the retroactive restatement
          method as described in SFAS 148, Accounting for Stock-Based Compensation
          -
          Transition and Disclosure. In accordance with that statement, we have
          retroactively restated all periods presented so that stock option expense
          is
          reflected in accordance with SFAS 123. Consequently, amounts previously
          marked
          to market of $2,147,000 during the year ended June 2003, in accordance
          with APB
          25 and related interpretations, have been restated and these financial
          statements reflect instead the fair value of the employee options earned
          in that
          year $415,412.
The
          major
          factor involved in the change in Selling, General and Administrative Expenses
          was approximately $1,500,000 of consulting cost incurred in 2004 when 800,000
          warrants issued to consultants for Investor Relations/Public Relations
          services
          became vested. The cost of warrants issued to consultants in 2003 was $85,000.
          An additional 200,000 warrants vested at the end of each quarter through
          December 2005. At each vesting date, Hyperdynamics will estimate and record
          the
          fair value of the warrants that vest using the Black-Scholes option pricing
          model; thus this cost continued through December 2005. Our other expense
          associated with warrants issued to our Officers decreased $147,046 or 36%
          from
          $412,766 in 2003 to $265,720 in 2004. This occurred because warrants were
          forfeited when one of our Officers resigned during fiscal 2003. A one-time
          debt
          renegotiation cost of $100,000 is included in 2003 results and a gain on
          a
          settlement with a vendor of $92,066 is included in 2004 results. Our other
          consulting, legal and professional costs decreased $189,818 or 53%, from
          $357,220 in 2003 to $167,402 in 2004.
In
          addition to increased Selling, General and Administrative Expense, we
          experienced impairment losses of $704,061 on leasehold improvements during
          2003.
          There was no impairment in 2004. The cost basis of our asset decreased
          as of
          July 1, 2004 due to that impairment and our depreciation expense decreased
          significantly from $161,857 in 2003 to $17,663 in 2004.
Other
          Items.
Interest
          Expense.
Interest
          expense increased 339% from $55,407 in 2003 to $474,463 in 2004. The increase
          was primarily due to Notes Payable due December 31, 2007, which were converted
          during the year ended June 30, 2004.
Net
          Loss.
Based
          on the factors discussed for each segment, our net loss chargeable to common
          shareholders was ($3,677,822), or ($0.12) per share in 2004 and compared
          to
          ($2,645,316), or ($0.12) per share in 2003.
CRITICAL
          ACCOUNTING POLICIES
Property
          and Equipment and Unproved Oil and Gas Properties:
We
          have
          capitalized $4,072,503 in oil and gas properties as of June 30, 2005. The
          $4,072,503 in oil and gas properties is subject to impairment review as
          of June
          30, 2005. The oil and gas properties were determined to be unimpaired because
          the Government of Guinea is currently working diligently to give us our
          permits
          and permission to continue our work. Additionally, we expect various strategies
          to raise funds, as discussed in the liquidity and capital resources section,
          to
          raise sufficient funds to satisfy our obligations with regard to the Guinea
          project.
Off-Balance
          Sheet Arrangements.
We
          have a
          contractual arrangement that has resulted in a lawsuit against USOil
          Corporation. The original agreements provide for us to pay USOil $1,600,000
          if
          SCS obtains third party financing for the Guinea development project. Also
          USOil
          will receive a 3% royalty if oil and gas is produced on this project and
          depending on the outcome of our legal claims against them. We also have
          a
          contingent $350,000 note payable that is only payable with 25% of the profits
          of
          SCS Corporation. We have the right to pay this note off using common stock.
This
          contingent payable will, if paid, increase the cost of the Unproved Oil
          and Gas
          properties at the time of payment. As such, it will increase the cost of
          sales
          over the oil and gas production period as part of the periodic amortization
          of
          the proved properties, or, if the development of the properties does not
          culminate in oil and gas production, the cost will be charged to expense
          as an
          impairment.
In
          conjunction with our purchase of HYD Resources Corporation, we entered
          into
three
          notes payable to two individuals totaling $856,000. The notes are to be
paid
          quarterly over the five years ended June 30, 2009. Payments will be due
only
          if
          HYD has net income. Payment amount will be 25% of the net income
for
          the
          period, unless there was a net loss in previous period(s). If there is
          a
net
          loss,
          subsequent net income must completely offset the losses before any
amounts
          are due. After the loss is offset, payment of 25% of the remaining net
income
          will be due. Upon the resignation of Sam Spears Jr. $350,000 of this
contingent
          amount was foregone by agreement.
42
Disclosure
          of Contractual Obligations as of June 23, 2006
Payments
                    due by period ($)
Contractual
Obligations
Total
Less
                    than 1 year
1-3
                    years
3-5
                    years
More
                    than 5 years
Long-Term
                    Debt Obligations
0
0
0
0
0
Capital
                    Lease Obligations
0
0
0
0
0
Operating
                    Lease Obligations
0
0
0
0
0
Purchase
                    Obligations
0
0
0
0
0
Other
                    Long-Term Liabilities
$
4,000,000
2,100,000
1,900,000
0
0
Total
$
4,000,000
2,100,000
1,900,000
0
0
FISCAL
          QUARTER ENDED MARCH 31, 2006
By
          Segment.
Nine
                      months ended March 31,
Nine
                      months ended March 31,
2006
2005
%
                      Change
2005
2004
%
                      Change
Revenues
SCS
0
3,140
(100
%)
3,140
0
100
%
HYDR
329,052
145,253
126
%
145,253
0
100
%
Corporate
0
300
(100
%)
300
0
100
%
Total
                      Revenues
$
329,052
$
148,693
121
%
$
148,693
$
0
(100
%)
Geographical
          Information
All
          revenues are currently derived from domestic sources. All long-lived assets
          are
          located in the USA, except for our oil and gas exploration and exploitation
          rights, which are located offshore Guinea, West Africa.
A
          breakdown of our operations by segments is as follows:
43
SCS
HYDR
Corporate
Total
As
                    of March 31, 2006:
Segment
                    assets
$
4,274,928
$
1,226,819
$
202,981
$
5,704,728
Nine
                    months ended March 31, 2006
Revenues
                    from external customers
-
329,052
-
329,052
Depreciation,
                    depletion and amortization
21,739
192,217
17,044
231,000
Loss
                    from operations
(517,094
)
(1,997,523
)
(1,887,956
)
(4,402,573
)
Expenditures
                    for long-lived assets
76,106
524,971
8,249
609,326
Three
                    months ended March 31, 2006
Revenues
                    from external customers
0
134,234
-
134,234
Depreciation,
                    depletion and amortization
8,019
142,808
8,032
158,859
Loss
                    from operations
(180,965
)
(802,562
)
(662,108
)
(1,645,635
)
Expenditures
                    for long-lived assets
2,629
174,474
3,813
180,916
As
                    of March 31, 2005:
Segment
                    assets
4,074,834
1,480,284
722,152
6,277,270
Nine
                    months ended March 31, 2005
Revenues
                    from external customers
3,140
145,253
300
148,693
Depreciation,
                    depletion and amortization
21,270
45,643
13,689
80,602
Loss
                    from operations
(430,418
)
(752,018
)
(2,099,787
)
(3,282,223
)
Expenditures
                    for long-lived assets
849,502
611,981
3,564
1,465,047
Three
                    months ended March 31, 2005
Revenues
                    from external customers
-
28,002
-
28,002
Depreciation,
                    depletion and amortization
7,243
12,669
4,465
24,377
Loss
                    from operations
(112,903
)
(329,705
)
(622,118
)
(1,064,726
)
Expenditures
                    for long-lived assets
137,114
427,331
-
564,445
Product
                    and services information
Quarter
                    Ended March 31,
Nine
                    Months Ended March 31,
2006
2005
2006
2005
Revenues
                    from:
Seismic
                    data management
$
-
$
-
$
-
$
3,140
Computer-related
-
-
300
Oilfield
                    services
-
-
117,251
Oil
                    and gas production
134,234
28,002
329,052
28,002
Totals
$
134,234
$
28,002
$
329,052
$
148,693
Guinea
          and Seismic Data Management ("SCS")
We
          had no
          revenues from this segment during the three months ended March 31, 2006
          and
          2005, respectively, and negligible revenues from this segment during the
          nine
          months ended March 31, 2006 and 2005, respectively. The lack of revenues
          is
          attributable to the amount of internal seismic data processing work performed
          during these periods as we focused our resources on the acquisition of
          seismic
          data for our concession in Guinea.
44
We
          have
          processed a portion of some data that we have the right to market in order
          to
          provide samples of the data to our prospects. When we sell the right to
          use this
          data, we will receive a fee and we will also be compensated for processing
          the
          data that we sell.
Our
          depreciation and amortization was $8,019 and $7,243 for the three months
          ended
          March 31, 2006 and 2005, respectively; and $21,739 and $21,270 for the
          nine
          months ended March 31, 2006 and 2005, respectively. These amounts are comparable
          between the periods.
Our
          loss
          from operations for this segment increased by $68,062, from ($112,903)
          for the
          three months ended March 31, 2005 to ($180,965)for the three months ended
          March
          31, 2006. Our loss from operations for this segment increased by $86,676
          from
          ($430,418) for the nine months ended March 31, 2005 to ($517,094)for the
          nine
          months ended March 31, 2006. The increased losses for both periods of time
          is
          due the increased costs associated with our efforts to secure our Guinea
          concession, as noted at the beginning of this section.
Expenditures
          for long lived assets were $2,629 and $137,114 for the three months ended
          March
          31, 2006 and 2005, respectively. Expenditures for long lived assets were
          $76,106
          and $849,502 for the nine months ended March 31, 2006 and 2005, respectively.
          The decreases of $134,485 and $773,396 during the three and nine month
          periods
          noted is primarily due to reductions in geophysical and other related consulting
          services.
Louisiana
          Operations ("HYDR")
Revenue
          for the three months ended March 31, 2006 and 2005 was $134,234 and $28,002,
          respectively. The increase of $106,232 is due to the increasing production
          trend
          noted above. We recorded oil and gas revenues of $329,052 and $145,253
          during
          the nine months ended March 31, 2006 and 2005, respectively. This increase
          of
          $183,799 is also due to the increasing production trend noted
          above.
Depreciation,
          depletion and amortization was $142,808 and $12,669 for the three months
          ended
          March 31, 2006 and 2005, respectively. The increase of $130,139 is due
          to the
          aforementioned production increases. Depreciation, depletion and amortization
          were $192,217 and $45,643 for the nine months ended March 31, 2006 and
          2005,
          respectively. The increase of $146,574 is due to the aforementioned production
          increases.
Our
          loss
          from operations for this segment increased by $472,857, from ($329,705)
          for the
          three months ended March 31, 2005 to ($802,562)for the three months ended
          March
          31, 2006. Our loss from operations for this segment increased by $1,245,505
          from
          ($752,018) for the nine months ended March 31, 2005 to ($1,997,523)for
          the nine
          months ended March 31, 2005. The increased losses during the quarter are
          due
          primarily to the loss in the amount of ($361,193) incurred upon the buyback
          of
          working interests in our oil and gas properties during the period and increased
          costs associated with bringing our oil production on line. The increase
          in the
          loss for the nine month period is also due to these same factors.
Our
          expenditures for long lived assets in this segment decreased by $252,857,
          from
          $427,331 during the three months ended March 31, 2005 to $174,474 during
          the
          three months ended March 31, 2006 due to the substantial completion of
          the
          capital improvements in our gas production and gathering systems. Our
          expenditures for long lived assets in this segment decreased by $87,010,
          from
          $611,981 during the nine months ended March 31, 2005 to $524,971 during
          the nine
          months ended March 31, 2006 due to the slow down in work on our gas production
          and gathering systems as they neared completion.
45
Corporate
          Overhead
Revenue
          was zero for the three months ended March 31, 2006 and 2005, respectively.
          We
          recorded negligible revenues in this segment during the nine months ended
          March
          31, 2006 and 2005. We do not actively pursue revenues in this
          segment.
The
          loss
          from operations attributable to corporate overhead was ($662,108) and ($622,118)
          for the three months ended March 31, 2006 and 2005, respectively. The increase
          of $39,990 is due to increased shareholder meeting costs and the cost of
          registration statement preparation and filings. The loss from operations
          attributable to corporate overhead was ($1,887,956) and ($2,099,787) for
          the
          nine months ended March 31, 2006 and 2005, respectively. The decrease in
          the
          loss of $211,831 was due to 1) reduction in rent expense of approximately
          $128,000 as the result of the settlement of a dispute with our former landlord,
          2) a payroll tax refund of $46,000, and efforts to reduce overhead.
Our
          expenditures for long lived assets were negligible during the three and
          nine
          months ended March 31, 2006 and 2005 respectively and consisted of office
          equipment.
HYD
          Resources Corporation has made continuous progress towards increased production
          on the Norris/Kelly leases. As a result we have been able to steadily solve
          problems and have realized a stepped increase in oil production from
          approximately 620 barrels of monthly production for December 2005, to
          approximately 720 barrels for both January and February, 1,670 barrels
          for March
          2006 and 1,770 barrels in April 2006. Management remains optimistic that
          this
          trend can continue and we can soon maximize our oil production out of the
          current wells on these leases. At that point we plan to evaluate how to
          enhance
          this production further through additional work-over, as well as re-focusing
          on
          our potential natural gas production using the gas gathering system recently
          installed. Once we get to the point of determining the optimum production
          levels
          from our production facilities installed, we will then reevaluate our drilling
          programs going forward. As part of this, we anticipate the search and hiring
          of
          a professional drilling and production manager to continue our growth of
          production from low volume, low cost wells in proven zones.
We
          recorded oil and gas revenues of $134,234 and $28,002 during the three
          months
          ended March 31, 2006 and 2005, respectively. The increase of $106,232 is
          due to
          the increasing production trend noted above. We recorded oil and gas revenues
          of
          $329,052 and $148,693 during the nine months ended March 31, 2006 and 2005,
          respectively. This increase of $180,359 is also due to the increasing production
          trend noted above. Our seismic data management, computer-related sales,
          and
          oilfield service revenues declined from $3,140, $300, and $117,251,
          respectively, during the nine months ended March 31, 2005 to zero during
          the
          nine months ended March 31, 2006 due to our continued emphasis on expanding
          and
          increasing our oil and gas production. We did not recognize any revenues
          from
          these activities in the three months ended March 31, 2006 and 2005.
Our
          cost
          of revenues were $241,778 and $266,027 for the three months ended March
          31, 2006
          and 2005, respectively, and $1,515,185 and $693,389 for the nine months
          ended
          March 31, 2006 and 2005, respectively. The decrease of $24,249 during the
          quarter is due to the billing of recoverable drilling costs to our working
          interest partners. The increase of $821,796 during the nine months period
          is due
          to an increase in the cost of maintaining and repairing our production
          facilities in preparation for bringing our oil and gas production
          online.
46
Selling,
          general and administrative expenses were $1,018,039 and $804,577 for the
          three
          months ended March 31, 2006 and March 31, 2005, respectively. The increase
          of
          $213,462 is primarily due to the establishment of a reserve for uncollectible
          working interest billings in the amount of $201,784 during the quarter
          as a
          result of a lawsuit filed by one of our working interest holders. Selling,
          general and administrative expenses were $2,624,047 and $2,639,766 during
          the
          nine months ended March 31, 2006 and 2005, respectively. The decrease of
          $15,719
          was primarily due to the following factors: 1) an increase in bad debt
          expense
          of $201,784, noted above, 2) reduction in rent expense of approximately
          $128,000
          as a result of the settlement of a dispute with our former landlord, 3)
          a
          payroll tax refund of $46,000, and 4) $45,000 due to increased shareholder
          meeting costs, travel to Guinea and the cost of registration statement
          preparation and filings.
We
          recorded a loss on the buyback of working interests of $361,193 during
          the three
          and nine months ended March 31, 2006 as a result of the repurchase of working
          interests in our Louisiana properties that were previously sold to investors
          in
          2005.
Depreciation
          and amortization was $158,859 and $24,377 for the three months ended March
          31,
          2006 and 2005, respectively. The increase of $134,482 was primarily due
          to
          depletion of $117,913 on wells that came on line in late 2005. Depreciation
          and
          amortization was $231,000 and $80,602 for the nine months ended March 31,
          2006
          and 2005, respectively. The increase of $150,398 is due to depletion on
          wells
          that came on line in late 2005.
Interest
          expense was $1,148,944 and $23,144 for the three months ended March 31,
          2006 and
          2005, respectively. The increase of $1,290,692 was due to the expensing
          of
          previously unamortized debt discount related to our 2005 financings that
          were
          converted to common shares during the third quarter. Interest expense was
          $1,313,837 and $314,300 during the nine months ended March 31, 2006 and
          2005,
          respectively. The increase of $999,537 was due in large part to the expensing
          of
          the unamortized debt discount on the 2005 notes as they were repaid during
          the
          period.
Liquidity
          and Capital Resources
Our
          ratio
          of current assets to current liabilities (current ratio) was .12 to 1 at
          March
          31, 2006 and .27 to 1 at March 31, 2005. A deeper analysis of the current
          ratio
          reveals several current obligations that reduce the current ratio but for
          which
          there is no requirement to use cash to satisfy them or for which the payment
          is
          deferred until we receive cash inflows sufficient to pay the obligation.
          These
          items include Deferred gain, Accounts payable Seismic Data, Dividends payable,
          and Dividends payable to related party. While the company continues to
          work
          toward generating positive cash flow from domestic operations altogether,
          including corporate overhead, it is expecting to report positive cash flow
          from
          its HYDR operations very soon.
We
          believe that are now prepared financially to begin an exploration well
          offshore
          Guinea. As discussed hereunder we expect our liquidity ratios to improve
          directly from our equity financing and with the success of putting our
          drilling
          operations back online in Guinea, we expect to have plenty of financial
          partnering opportunities that will allow us to far exceed minimum exploration
          and drilling requirements. This will allow us to drill more wells faster
          in
          quality locations. The more we drill in quality locations, the more chances
          we
          have to realize a viable commercial discovery for Guinea and for us. Once
          the
          March 17th protocol letter is fulfilled by the Government of Guinea, we
          will be
          able to implement our additional strategy to bring on working interest
          partners
          to share in the risk on some of our more expensive wells to be drilled
          sooner
          rather than later.
C
urrently,
          in anticipation of receiving our permits to drill in Guinea, we are prepared
          and
          our financing is in place to drill at least one well offshore Guinea using
          fund
          from an equity line of credit and the recent Cornell financing. Partners
          that
          have contacted us with verbal indications of interest could provide the
          ability
          for us to drill many more wells and at a very fast pace.
With
          our
          financing in place, management is highly confident in our ability to proceed
          and
          perform under either scenario of a new PSA or continuing under the 2002
          PSA.
          Also, under the old agreement, the second exploration period expires sometime
          during the later part of this decade depending on initial periods and extension
          provisions. Although we have several years to complete this work, we wish
          to
          initiate a drilling program as soon as possible. If all outstanding options
          and
          warrants were exercised, we would raise approximately
          $8,000,000.
47
We
          are
          considering all of our options or any combination of these options to:
          a)
          increase revenues from operations; b) raise additional capital to support
          at
          least the minimum required drilling program; c) negotiate one or more
          transactions with oil company partners who share in the required work and
          financing risk; and d) negotiate work program related deals with oil industry
          vendors such as seismic acquisition companies. We believe that our ability
          to
          manage and affect one or more of these options will determine our
          significant
current
          ratio and financial position in the future.
Our
          cash
          from operations was a deficit in 2005. We have taken steps to reduce overhead
          and reduce non-operational costs. We continue to spend most of the capital
          we
          raise on enhancing the value of our offshore oil and gas concession. These
          expenditures, however, do not improve cash flow from operations. In order
          to
          improve our operating cash flow situation for future periods, we have started
          to
          build up our production revenues for HYDR in Louisiana.
In
          April
          2005, we sold a 35% working interest in two of our leases in Louisiana.
          Since
          this time, with the belief we could solve operational problems that we
          encountered and that we could gradually increase our production, we decided
          to
          offer a buy-back of the working interest from the non-operators that invested
          in
          these leases. In 2006 non-operators owning 5% of the working interest accepted
          our offer and we issued 197,416 shares of common stock to them in exchange
          for
          their working interest. No new working interest sales are planned at this
          time.
          We will continue to assess our progress with the oil production from our
          current
          leases and perhaps increase drilling activity in the near future. We believe
          that there is significant attainable production to go after on a profitable
          basis and will continue towards its goal of profitable operations from
          its
          domestic operations. We believe it has the financing in place to invest
          in
          necessary improvements, production facilities and new drilling programs
          to
          continue to build this domestic production.
In
          January 2006, we entered into a new lease for office space with a term
          of five
years.
          The new lease will become effective upon the completion of tenant
improvements
          specified in the lease agreement. As of now it appears this will be
sometime
          in August 2006. This lease will cost us $15,000 per month
less
          in
          rent and approximately $5,000 less in electricity than our previous lease
          at
          another location. Currently we are also in nearby temporary space that
          is being
          provided by our landlord at no cost to the Company while our new space
          is being
          readied for occupancy. Once the new lease begins, the base monthly rent
          is $0
          for months 1-6, and we have paid three months of rent in advance so once
          we move
          into the new space we will not be required to pay rent for nine months.
          We have
          put up a $75,000 Letter of Credit to secure our build-out costs. The letter
          of
          credit will be released back to us in 18 months.
On
          June
          23, 2006, we closed a private financing transaction with
Cornell
          Capital Partners, LP
.
          The
          financing included a subscription for 3 convertible debentures in the aggregate
          amount of $6,000,000 of which we received the net amount of $1,800,000
          on June
          23, 2006. We received $1,820,000 in connection with the second debenture
          prior
          to filing the registration statement. We expect to receive another $1,820,000
          when this registration statement is ordered effective by the Commission.
          Since
          only the Commission can order a registration statement effective, we do
          not know
          for certain when or if the registration statement will become
          effective.
We
          have
          an equity line of credit. We have made 5 puts on the equity line of credit
          since
          February 2006 in the aggregate amount of $967,0.At June 23, 2006, the remaining
          amount available for us to draw down on the equity line of credit is
          $19,032,900. The equity line of credit expires in February 2009, after
          which we
          may no longer utilize the equity line of credit.
Although
          we plan to continue to improve on our current ratio, we have a contractual
          requirement during the second exploration period in the Guinea concession
          to
          invest an estimated $10,000,000 in drilling at least one exploratory well
          offshore Guinea. The second exploration period expires sometime during
          the later
          part of this decade depending on initial periods and extension provisions.
          Although we have several years to complete this work, we wish to initiate
          a
          drilling program as soon as possible. Thus, we are considering all of our
          options or any combination of these options to: (a) increase revenues from
          operations; (b) raise additional capital to support at least the minimum
          required drilling program; (c) negotiate one or more transactions with
          oil
          company partners who share in the required work and financing risk; and,
          (d)
          negotiate work program related deals with oil industry vendors such as
          seismic
          acquisition companies. We believe that our ability to manage and effect
          one or
          more of these options will determine our significant current ratio and
          financial
          position in the future.
Because
          SCS has significant work requirements to accomplish a 3D seismic acquisition
          program, processing, and analysis thereof, and to drill exploration wells,
          we
          are beginning to look at more than one option to raise additional funds.
          We are
          confident in our ability to raise additional capital under more conventional
          financing structures such as an underwritten secondary financing, but also
          believes we will be able to secure oil and gas working interest partners
          to fund
          and carry significant portions of the capital investment
          burden.
48
We
          have
          been successful in raising our necessary capital through private placements.
          Based on our relatively low overhead in comparison to the rather large
          task at
          hand, most of our capital going to improve our drilling prospects.
We
          expect
          to exploit our leases in Louisiana by operating numerous low volume wells
          that
          produce 20 barrels a day or less. We believe the relatively high price
          of oil
          will help make these wells more economically viable. Because
of
          the geological features of the Louisiana leases and our oil production
          to date,
          we consider this an attractive prospect for oil and gas investors.
As
          a
          public company, the health of the market for our common stock is paramount
          to be
          able to raise capital. In May 2005, we began trading on the American Stock
          Exchange. We believe this will directly and indirectly help to strengthen
          and
          provide more stability to the price of our common stock and that financing
          options for us will expand as a result.
We
          are
          obligated on a contingent $350,000 note payable that is only payable with
          25% of
          the profits of SCS Corporation. We have the right to pay this note off
          using
          common stock.
In
          conjunction with our purchase of HYD, we entered into three notes payable
          to two
          individuals totaling $856,000. The notes are to be paid quarterly over
          the five
          years ending June 30, 2009. Payments will be due only if HYD has a net
          income
          according to accounting principles generally accepted in the United States
          of
          America. Payment amount will be 25% of the net income for the period, unless
          there was a net loss in previous period(s). If there is a net loss, subsequent
          net income must completely offset the losses before any amounts are due.
          After
          the loss is offset, payment of 25% of the remaining net income will be
          due.
We
          could
          obtain additional capital also upon the exercise of outstanding warrants
          and
          options for common stock.
49
FINANCIAL
          STATEMENTS
Our
          financial statements begin on page F-1.
MARKET
          RISK
Our
          functional currency is the US dollar. Our revenue is directly related to
          the
          price of oil and gas. Assuming that we sell one barrel of oil, then a one
          dollar
          decrease in the price that we get for that barrel of oil will lower our
          revenue
          by one dollar, and correspondingly so for a one dollar increase in price.
          The
          same is true for changes in the price of natural gas. We intend to sell
          oil and
          gas immediately upon lifting to the wellhead. We do not contemplate retaining
          any oil and gas inventory. We do not hedge any market risk. Although the
          prices
          of oil and gas have recently increased substantially, there is no assurance
          that
          the price of oil and gas will not fall dramatically in the future.
MARKET
          FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Price
          Range of Common Stock.
Our
          common stock is traded on the American Stock Exchange under the trading
          symbol
""HDY". The following table sets forth the quarterly high and low bid prices
          per
          share for the common stock, as reported by the OTCBB (our previous trading
          market) or the AMEX as the case may be. The bid prices reflect inter-dealer
          quotations, do not include retail markup, markdown, or commission and do
          not
          necessarily reflect actual transactions.
High
                    Bid
Low
                    Bid
Fiscal
                    2004
First
                    Quarter
$
2.1400
$
0.7300
Second
                    Quarter
2.2500
1.4100
Third
                    Quarter
3.7200
1.5100
Fourth
                    Quarter
3.0200
2.2700
Fiscal
                    2005
First
                    Quarter
$
2.7200
$
1.7600
Second
                    Quarter
3.5000
2.1700
Third
                    Quarter
3.4000
1.7500
Fourth
                    Quarter
3.2000
1.9900
Fiscal
                    2006
First
                    Quarter
$
2.57
$
0.8700
Second
                    Quarter
2.37
1.09
Third
                    Quarter
$
3.42
1.68
Fourth
                    Quarter through June 23, 2006
$
3.42
$
2.09
On June
          23, 2006, the last price for our common stock as reported by the AMEX was
          $2.21
          per share. On June 23, 2006, there were approximately 200 stockholders of
          record of the common stock.
We
          have
          not paid, and we do not currently intend to pay in the foreseeable future,
          cash
          dividends on our common stock. The current policy of our Board of Directors
          is
          to retain all earnings, if any, to provide funds for operation and expansion
          of
          our business. The declaration of dividends, if any, will be subject to
          the
          discretion of the Board of Directors, which may consider such factors as
          our
          results of operations, financial condition, capital needs and acquisition
          strategy, among others.
DIRECTORS,
          EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Executive
          Officers and Directors.
The
          following table sets forth the names and positions of each of our Executive
          Officers and Directors.
Name
Position
Age
Kent
                    Watts
Director,
                    Chief Executive Officer, Chairman and President
47
Harry
                    J. Briers
Director
                    and Executive Vice President
42
Harold
                    A. Poling
Director
79
Albert
                    F. Young
Director
68
Steven
                    Plumb
Chief
                    Financial Officer
47
L.
                    Gene Stohler
Director
77
50
Directors
          are elected annually and hold office until the next annual meeting of our
          stockholders or until their successors are elected and qualified. We have
          no
          standing committees of the Board of Directors. Officers are elected annually
          and
          serve at the discretion of the Board of Directors. There is no family
          relationship between or among any of the Directors and our Executive Officers.
          Board vacancies are filled by a majority vote of the Board. We have determined
          that our Vice-President for Guinea Affairs,
Famourou
          Kourouma, is not an executive officer. We have a corporate Secretary who
          we have
          also determined is not an executive officer.
Kent
          Watts, age 47, became Chairman of the Board of Directors and was named
          our President Chief Executive Officer (CEO) on June 4, 1997. Mr.
          Watts has been a certified public accountant in Texas since 1985 and a
          licensed
          real estate broker since 1979. He received a Bachelor of Business Administration
          Degree from the University of Houston in 1983. Mr. Watts founded MicroData
          Systems, Inc., our former subsidiary, in 1988 and was MicroData's CEO until
          he
          became President and Chief Executive Officer of Hyperdynamics Corporation.
          He
          has extensive experience designing and working with integrated communications
          network systems and management information systems; additionally he designed
          our
          Integrated Technology Center. As our CEO and Chairman of the Board, he
          remains primarily responsible for managing our strategic direction and
          focus on
          the vertical oil and gas industry.
Harry
          James Briers, age 42, has been a Director since March 2, 2000. He began
          as our
          Director of Integrated Information Systems when he joined us in May 1998.
          He was
          elected as Vice President of Operations for Hyperdynamics Corporation in
          1999
          and named the Chief Operating Officer in 1999. He became our Executive
          Vice
          President in October 2002, which is the only position and title he now
          holds.
          From 1988 until May 1998, Mr. Briers owned and operated Perfect Solutions,
          a
          software consulting firm in Houston, Texas. He has extensive experience
          in the
          sale and implementation of mission critical software applications. Prior
          work
          experience included consulting for Ernst & Young in its Entrepreneurial
          Services Group. Mr. Briers has a B.S. in Accounting and an MBA from the
          University of Houston-Clear Lake. As Executive Vice President he is responsible
          for managing the daily operations of the organization. He holds no other
          directorships.
51
Mr.
          Harold A. Poling, age 79, was elected as our fourth Director on June 2,
          2004. He
          is a former Chairman of the Board and CEO of Ford Motor Co. After finishing
          his
          MBA in accounting, he took a job with Ford in 1951. Ford of Europe had
          record
          earnings during his tenure as head of that subsidiary. He moved to Ford's
          North
          American Operations prior to being named President and COO, then Vice-chairman
          and CEO of , and later Chairman and CEO of Ford Motor Co., the world's
          second
          largest auto maker. He served as a member of Ford's Board of Directors
          from May
          1979 until January 1994, and was elected Chairman in March 1990. He became
          a
          member of the Office of the Chief Executive of Ford in November 1984. He
          retired
          from Ford in January 1994. Currently, Mr. Poling serves as the Chairman
          of The
          PGA Tournament Players Club of Michigan and is also the chairman for
          Eclipse Aviation Corp. He is a Director of Flint Ink Corp., Monmouth, IL.
          College Senate, and William Beaumont Hospital where he is also a trustee.
          He is
          also a member of the Board of Trustees of Spring Arbor University. In the
          past,
          Mr. Poling served on the Boards of ArvinMeritor, Royal Dutch Shell, Kellogg,
          and
          is past Director of the Professional Golf Association's (PGA) Tour Policy
          Board.
Albert
          F.
          Young, age 68, was elected to the Board of Directors on October 18, 2004.
          He
          currently owns and operates Al Young Sales and Consulting. He retired from
          Venture Industries, where he had spent the preceding 14 years, in 2003.
          Currently, he continues to consult with Venture and is the Executive Assistant
          to its Chairman. During his tenure at Venture, Mr. Young was responsible
          for
          building his division's sales to approximately $500 million annually.
          Additionally, Mr. Young was instrumental in formulating and orchestrating
          several acquisitions and joint ventures including Venture's purchase of
          a Ford
          plastic plant, design center and two (2) tool shops in Melbourne, Australia.
          These acquisitions made Venture a supplier of automotive design projects.
          Additionally, Mr. Young helped Venture acquire Bailey Corporation and a
          third
          tool shop in Michigan and became a joint venture partner with Visteon in
          the
          purchase of Atlantic Automotive in Benton Harbor, Michigan. He holds no
          other
          public company directorships.
Steven
          Plumb, age 47, has been our CFO since November 2005. He is a CPA licensed
          to
          practice in Texas. Mr. Plumb is a financial manager and senior executive
          experienced in operations, finance and marketing. He has Big 4 CPA experience,
          a
          background in IT, biotech, Fortune 500 firms, medical and utility companies,
          distribution, real estate, construction, governmental entities, and non-profit
          organizations. During 1981-1982, Mr. Plumb was a staff accountant at
          PriceWaterhouseCoopers. During 1982-1984, Mr. Plumb was a staff accountant
          at
          Kalman Phillips & Leon, P.C. During 1984-1987, Mr. Plumb was a supervising
          senior accountant at KPMG. During 1987-1990, Mr. Plumb was the controller
          of
          Memorial Hermann Rehabilitation Hospital. During 1990-1992, Mr. Plumb was
          the
          CFO of DePelchin Children's Center. During 1992-present, Mr. Plumb was
          the
          President of Steven M. Plumb, P.C. During 1997-2001, Mr. Plumb was the
          President
          of Orchard Consulting Group, Inc. During 2002-2004, Mr. Plumb was the CFO
          of
          ADVENTRX Pharmaceuticals, Inc. During 2003-present, Mr. Plumb was the President
          of Clear Financial Solutions, Inc. Mr. Plumb is also the CFO of Bluegate
          Corporation, a public company. Mr. Plumb is a member of: American Institute
          of
          Certified Public Accountants; Texas Society of Certified Public Accountants;
          Houston Chapter of Texas Society of Certified Public Accountants; Houston
          Technology Center; and Association for Corporate Growth. Mr. Plumb is active
          in
          BioHouston and the Rice Alliance. Mr. Plumb has a Bachelor of Business
          Administration degree from the University of Texas at Austin, Austin, Texas,
          1981. There is no family relationship between Mr. Plumb and any of our
          officers
          or directors. We have a one year contract with Clear Financial Solutions,
          Inc.,
          a company owned by Mr. Plumb, which has agreed to provide us with a so
          called
"contract" CFO, namely Mr. Plumb. We will pay a fee directly to Clear
          Financial Solutions, Inc. in the estimated amount of approximately $3,300
          to
          $4,950 per month for Mr. Plumb's services as our CFO and some additional
          services provided to us by Clear Financial Solutions, Inc.
L.
          Gene
          Stohler, age 77, is a Director. One of Mr. Stohler's early activities in
          1959
          was supporting the inventor of the cruise control system for automobiles.
          Mr.
          Stohler provided marketing, sales and manufacturing support assistance
          to the
          inventor. In 1970, Mr. Stohler began working for Rockwell International
          as the
          General Manager of the Service Parts Group of Rockwell. In 1978, Mr. Stohler
          was
          promoted to Director of Marketing for Rockwell. In 1983, Mr. Stohler joined
          ITT
          Automotive. His activities at ITT Automotive included sales management
          for the
          Anti-Lock Brake System sales to the automotive industry. In 1989, Mr. Stohler
          joined Masco Corporation as the Vice President--Marketing and Planning
          for the
          Masco Tech Automotive Group which had $750 million in sales, including
          projects
          such as engineering and building the Ford Mustang Convertible from a basic
          chassis. Mr. Stohler retired from MascoTech in 2003 and joined Bankers
          Integration Group, a startup company at that time, as the VP--Business
          Development, reporting to the Chairman. Bankers Integration Group, Inc.
          is a
          technology and software development company that provides decision support
          tools
          and services to the automotive industry for the purpose of assisting automobile
          dealers and financial institutions with interpretation of credit data,
          and
          matching buyers with available loan programs. Mr. Stohler is a past member
          of
          the Board of Oakland University and a member of the Board of Breed Technologies
          which is a supplier of safety equipment to the automotive industry.
Information
          Concerning the Board of Directors and its Committees.
We
          have
          no compensation committee and no nominating committee. Decisions concerning
          nominees for Director and Executive Officer compensation for fiscal 2004
          were
          made by the full Board of Directors. The Board has not adopted formal policies
          with regard to the process to be used for identifying and evaluating nominees
          for Director and determining executive compensation. However, we are currently
          in the process of developing these policies and procedures. At this time,
          the
          consideration of candidates nominated by Directors and the
compensation
          of our Officers are in the Board's discretion. We believe this is adequate
          based
          on our size and each current Board member's qualifications.
We
          have
          an Audit Committee. The Audit Committee was created during October 2004.Mr.
          Poling and Mr. Young are the members of the Audit Committee. Both committee
          members are independent. Mr. Poling is the financial expert.
The
          Board
          has not adopted formal policies with regard to shareholder communications
          with
          individual Board members. However, we are currently in the process of developing
          these policies and procedures.
The
          Board
          of Directors held special meetings on four occasions during the fiscal
          year
          ended June 30, 2005. The Board of Directors also took action by written
          consent
          on 16 occasions during the fiscal year ended June 30, 2005, in which all
          present
          Directors took part.
Section
          16(a) Beneficial Ownership Reporting Compliance.
All
          persons required to file We have reviewed the Forms 3, 4 and 5 submitted
          to us
          relating to fiscal 2005. We have found that Harry Briers, Harold Poling,
          Albert
          F. Young, DJX Ltd, and Kent Watts have filed all required Forms 3, 4 and
          5
          during fiscal 2005.
52
The
            following table summarizes the results of our review.
Name
Form
                    Type
Number
                    of forms filed late
Number
                    of transactions reported late
Harry
                    Briers
4
1
3
DJX
                    Ltd
4
1
1
Kent
                    Watts
4
0
0
Harold
                    Poling
4
0
0
Albert
                    F. Young
4
0
0
Code
          of Ethics.
We
          have
          adopted a Code of Ethics for our senior Executive Officers and Financial
          Officers, which was filed in our 10-KSB Amendment on May 16, 2005.
Board
          Committee Meetings.
The
          Board
          of Directors held special meetings on four occasions during the fiscal
          year
          ended June 30, 2005. The Board of Directors also took action by written
          consent
          on 16 occasions during the fiscal year ended June 30, 2005, in which all
          present
          Directors took part. The Audit Committee has a written charter, which was
          included in our proxy statement filed on December 28, 2004. During the
          year
          ended June 30, 2005, the Audit Committee met five times and took action
          by
          Unanimous Consent one time
.
EXECUTIVE
          COMPENSATION
Summary
          Compensation Table
The
          following table reflects all forms of compensation for the fiscal years
          ended
          June 30, 2003, 2004, and 2005 for services provided by our named Executive
          Officers.
Annual
                    Compensation Awards
Long
                    Term Compensation Payouts
Compensation
Name
                    and Principal Position
Year
Salary
Bonus
Other
                    Annual Compensation
Restricted
                    Stock Awards
Securities
                    Underlying
Options SARS
LTIP
                    Payouts
All
                    Other Compensation
Kent
                      Watts
2005
$
100,000
(1)
-0-
-0-
-0-
-0-
-0-
-0-
Chief
                    Executive Officer
2004
$
100,000
-0-
$
171,062
(3)
-0-
-0-
-0-
-0-
2003
$
100,000
-0-
$
147,314
(2)
-0-
1,100,000
(2)
-0-
-0-
Harry
                      Briers
2005
$
95,000
-0-
-0-
-0-
-0-
-0-
-0-
Executive
                      Vice President
2004
$
95,000
-0-
$
132,861
(3)
-0-
-0-
-0-
-0-
2003
$
87,100
-0-
147,314
(2)
-0-
1,100,000
(2)
-0-
-0-
(1)
          On
          July 21, 1999, our Board of Directors unanimously agreed to the terms of
          an
"Executive Employment Agreement" for Kent Watts. The Agreement was duly executed
          on July 21, 1999 which establishes Mr. Watts as our President, Chief Executive
          Officer (CEO). The contract provides for a base salary of $100,000 annually
          with
          a performance based incentive salary based on 5% of adjusted net income,
          up to
          an additional $100,000 in salary. Therefore, maximum salary under the Agreement
          is $200,000 annually. This Agreement has been renewed on a year-by-year
          basis
          under the same terms.
(2)
          On
          August 26, 2002, the strike price of the warrants described in Note (2)
          was
          reduced to $0.23. The repricing of the warrants was valued as a new grant
          in
          fiscal 2003. This table reflects the $122,857 original fair value of the
          400,000
          warrants earned during 2003 and $24,457 fair value attributable to the
          repricing
          of 1,100,000 warrants for a total of $147,314.
(3)
          For
          the year ended June 30, 2004, an additional 400,000 warrants were earned.
          The
          original fair value of these warrants, $129,686, and $3,175 attributable
          to the
          repricing of these warrants is included in 2004 bonus income.
53
Option/SAR
          Grants.
We
          did
          not grant any options or SARS to any of our Directors or Officers during
          the
          year ended June 30, 2005.
Aggregate
                    Options Exercised In Last Fiscal Year And Fiscal Year End Option
                    Values
                    (*)
Name
Shares
                    Acquired on Exercise
Value
                    Realized
Number
                    of Unexercised Securities Underlying Options at FYE
                    Exercisable/Unexercisable (*)
Value
                    of Unexercised in the Money Options at FYE
                    Exercisable/Unexercisable
Kent
                    Watts
Chief
                    Executive Officer
-0-
-0-
400,000/0
$
1,032,000/0
Harry
                    Briers
Executive
                    Vice President
-0-
-0-
400,000/0
$
1,032,000/0
________________________________
(*)
These
                    are all of the remaining warrants that were in the money at fiscal
                    year
                    end 2005. Mr. Watts and Mr. Briers each hold 400,000 warrants for
                    restricted common stock each that are vested but have not been
                    exercised.
Option/SAR
          Repricings.
There
          were no option repricings during fiscal 2005.
Long-term
          Incentive Plan Awards.
There
          were no long-term incentive plan awards to any of our Officers during the
          year
          ended June 30, 2005.
Director
          Compensation.
On
          January 21, 2005 the Board of Directors approved compensation for Directors
          of
          $4,000 per quarter to be paid in the form of our common stock and $1,000
          per
          quarter for our Secretary. On January 21, 2005, compensation of $8,000
          each was
          paid to Kent Watts, Harold Poling, Harry Briers and $4,000 to Albert Young
          for Director services for the first two quarters of the fiscal year. The
          stock was issued at a price of $3.17 per share and thus 2,524 shares each
          were
          issued to Kent Watts, Harold Poling, and Harry Briers; 262 shares were
          issued to Albert Young. On May 9, 2005, the third quarter 2005 Director
          compensation of $4,000 was paid to each of the Directors by issuing 1,527
          shares of common stock based on the average closing bid price for the quarter
          of
          $2.62 per share. As of September 5, 2005, the fourth quarter Director's
          compensation accrued is $4,000 each for Kent Watts, Harold Poling, Harry
          Briers,
          and Albert Young.
There
          was
          no other compensation granted by the Board for services rendered during
          the
          fiscal year ended 2005. There have been no Director meeting expense
          reimbursements for 2005 and 2004.
Employment
          contracts and termination of employment and change-in-control
          arrangements.
We
          have
          an employment contract with Kent Watts, CEO. The contract provides for
          a base
          salary of $100,000 annually with a performance based incentive salary based
          on
          5% of adjusted net income, up to an additional $100,000 in salary. The
          maximum
          salary under the contract is $200,000 annually. This contract has been
          renewed
          on a year-by-year basis under the same terms.
We
          have a
          one year contract (expiring in November 2006) with Clear Financial Solutions,
          Inc., a company owned by Mr. Plumb, which has agreed to provide us with
          a so
          called "contract" CFO, namely Mr. Plumb. We will pay a fee directly to
          Clear Financial Solutions, Inc. in the estimated amount of approximately
          $3,300
          to $4,950 per month for Mr. Plumb's services as our CFO and some additional
          services provided to us by Clear Financial Solutions, Inc.
The CFO
          contract terminates in November 2006 unless otherwise extended.
In
          August
          2005, we hired Mr. Famourou Kourouma as our new Vice President of Guinea
          Affairs. Famourou Kourouma will receive compensation from us in the amount
          of
          $2,000 per month and he may also receive between 200,000 and 400,000 options
          based upon our relations with the government of Guinea.
SECURITY
          OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Related
          Stockholder Matters.
Securities
          authorized for issuance under equity compensation plans as of
June
          30, 2005
.
54
Equity
                    Compensation Plan Information
Number
                    of Securities to be Issued Upon Exercise of Outstanding Options,
                    Warrants,
                    and Rights
Weighted-Average
                    Exercise Price Price of Outstanding Options, Warrants and
                    Rights
Number
                    of Securities Remaining Available for Future Issuance Under Equity
                    Compensation Plans (Excluding Securities Reflected in Column
                    (a))
Plan
                    Category
(a)
(b)
(c)
Equity
                    compensation plans approved by security holders
-0-
N/A
4,879,075
Equity
                    compensation plans not approved by security holders
2,902,000
$
0.42
-0-
Total
2,902,000
$
0.42
4,879,075
The
          Stock
          and Stock Option Plan (the "Plan") of Hyperdynamics was adopted May 7, 1997 and
          amended on December 3, 2001. On June 30, 2004, we had 44,453 shares available
          to
          be issued or granted pursuant to the Plan. On January 21, 2005, the shareholders
          approved an increase in the Plan for an additional 4,880,000 shares to
          a total
          of 10,000,000 shares under the Plan. We issued 45,378 shares under the
          Plan this
          fiscal year, leaving us with 4,879,075 shares available to be issued or
          granted
          pursuant to the Plan as of June 30, 2005.
Under
          the
          Plan, options will vest over a five year or other negotiated period and
          will
          have a strike price set at the time of grant based on the then current
          market
          value of the stock. Our President has the authority as given by the Board
          of
          Directors to negotiate stock option agreements with corporate consultants
          as
          well.
We
          presently have warrants to purchase 2,902,000 shares of common stock which
          are
          currently outstanding and were issued pursuant to the Plan at a weighted
          average
          price of $0.42 per share.
The
          purpose of the Plan is to further our interest, and the interest of our
          subsidiaries and our stockholders by providing incentives in the form of
          stock
          or stock options to key employees, consultants and Directors who contribute
          materially to our success and profitability. We believe that our future
          success
          will depend in part on our continued ability to attract and retain highly
          qualified personnel as employees, independent consultants and attorneys.
          The issuance of stock and grants of options and warrants will recognize
          and
          reward outstanding individual performances and contributions and will give
          such
          persons a proprietary interest in us, thus enhancing their personal interest
          in
          our continued success and progress. We pay wages, salaries, and consulting
          rates
          that we believe are competitive. We use the Plan and individual compensation
          arrangements to augment our compensation packages.
55
TABLE
          OF SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT
The
          following table sets forth certain information at June 23, 2006, with respect
          to
          the beneficial ownership of shares of Common Stock by (1) each person known
          to
          us that owns beneficially more than 5% of the outstanding shares of Common
          Stock, (2) each of our Directors, (3) each of our Executive Officers, and
          (4)
          all of our Executive Officers, Directors as a group.
Name
                    and Address of Beneficial Owner
Number
                    of Shares of Common Stock Beneficially Owned
Percent
                    of Class
Kent
                    Watts
One
                    Sugar Creek Boulevard. Suite 125
Sugar
                    Land, TX 77478
23,121,903
(1)
35
%
Harry
                    Briers
One
                    Sugar Creek Boulevard. Suite 125
Sugar
                    Land, TX 77478
1,929,418
(2)
4
%
Harold
                    Poling
Fairlane
                    Plaza North
290
                    Town Center Drive, Suite 322
Dearborn,
                    Michigan 48126
474,753
(3)
1
%
Albert
                    F. Young
2417
                    Fox Chase Blvd
Troy,
                    Michigan 48098-5626
52,601
0.1
%
DJX
                    Ltd.
4438
                    West 10th Avenue
Vancouver,
                    BC V6R4R8
20,272,900
(4)
30
%
Steven
                    Plumb
5300
                    N. Braeswood, #370
Houston,
                    TX 77096-3317
100,000
(6)
0.1
%
L.
                    Gene Stohler
One
                    Sugar Creek Boulevard. Suite 125
Sugar
                    Land, TX 77478
5077
(5)
0.1
%
All
                    Directors, Director Nominees and Executive Officers as a group (6
                    persons)
25,683,752
38
%
_______________________________
(1)
This
                    amount includes 2,449,003 shares of common stock; currently exercisable
                    warrants to purchase 400,000 shares at $0.23; 20,185,185 shares
                    deemed as
                    indirectly owned by Kent P. Watts based on his relationship with
                    DJX Ltd.,
                    whose shares he presently has the authority to vote and which
                    are one-half
                    owned by his minor children; and 87,715 common stock shares owned
                    by DJX
                    Ltd. and deemed owned by Kent P.
                    Watts.
56
(2)
This
                    amount includes 1,529,418 shares of common stock and currently
                    exercisable
                    warrants to purchase 400,000 shares at
                    $0.23.
(3)
This
                    amount includes 349,753 shares of common stock and currently
                    exercisable
                    warrants to purchase 125,000 shares at
                    $0.25.
(4)
In
                    May 2001, we entered into a stock exchange agreement whereby
                    we acquires
                    SCS Corporation as our wholly owned subsidiary. We issued 2,725
                    shares of
                    Series B Preferred Stock to pay for the acquisition. Each share
                    of Series
                    B Preferred Stock carries a $1,000 per share face value and is
                    convertible
                    into common stock at the lesser of $0.135 per share or 50% of
                    the closing
                    bid price on conversion. On June 26, 2006 the closing price was
                    $2.13 per
                    share, and if all of the Series B Preferred Stock was converted
                    at the
                    lesser conversion price, $0.135 per share, we would issue to
                    DJX Ltd.
                    20,185,185 shares of common stock. DJX Ltd. is a foreign corporation
                    whose
                    shareholders are the grandchildren of Ernest M. Watts, the father
                    of Kent
                    P. Watts, our Chairman, CEO. Kent Watts currently exercises voting
                    rights
                    of DJX shares. DJX also owns 87,715 shares of Common Stock issued
                    in
                    payment of accrued dividends so the total attributed to DJX is
                    20,272,900
                    shares.
(5)
No
                    warrants, options or preferred
                    stock.
(6)
Includes
                    100,000 immediately exercisable
                    options.
We
          are
          not aware of any arrangements that could result in a change of
          control.
CERTAIN
          RELATIONSHIPS AND RELATED TRANSACTIONS
In
          connection with Michael E. Watts.
In
          November 2003, a Master Public Relations Consulting Agreement (the "Agreement")
          was signed with Michael E. Watts, the brother of Kent Watts, our Chairman
          and CEO. The Agreement affirmed and established Michael Watts as the primary
          consultant with the responsibility to help manage public relations, general
          investor relations and shareholder communications. In the Agreement, Michael
          Watts was authorized and required to communicate publicly known information
          to
          shareholders and potential shareholders and to help in all reasonable ways
          to
          convey the history and story of Hyperdynamics with the goal to increase
          the
          interest of all investors in investing in Hyperdynamics publicly traded
          stock.
          The agreement additionally authorized Michael Watts to subcontract public
          relations services to other firms and consultants. It was contemplated
          that
          these subcontracts would include but not necessarily be limited to setting
          up
          public relations agents in different parts of the country. The total
          compensation for the Agreement and all underlying subcontracts is a total
          of
          2,000,000 warrants with a strike price of $0.50 per share of restricted
          common
          stock. During January and April 2004, Hyperdynamics granted an aggregate
          of
          1,200,000 of the warrants (of which 900,000 were vested as of June 30,
          2005)
          under the Agreement to a company whose president is Michael Watts. We granted
          800,000 warrants (of which 600,000 were vested as of June 30, 2005) under
          the
          Agreement to unrelated third parties. This compensation was designed to
          encourage the long term commitment to the market developing work being
          performed
          in the maintenance of our informed and orderly market. As such, it is believed
          that significant incentive is in place for all public relations consultants,
          agents, and subcontractors to continually work in communicating the
          Hyperdynamics story and opportunity. This agreement with Michael Watts
          may be
          canceled by us at any time by giving a 30 day written notice.
During
          the year ended June 30, 2004, Michael Watts received payment of $699,951
          cash to
          pay for offering costs on private subscription agreements and exercised
          warrants. Additional offering costs will also be paid on 3,732,403 outstanding
          warrants purchased by private investors should they be exercised in the
          future.
          If all of these warrants are exercised, Mr. Watts would receive approximately
          $712,000 to pay these additional costs.
57
On
          February 9, 2005, the Audit Committee of Hyperdynamics Corporation preapproved
          a
          contract (the "Contract") with Geoserve Marketing, an assumed name for Michael
          E. Watts, the brother of our Chief Executive Officer. The Contract was
          executed by and between Trendsetter Production Company (our wholly owned
          subsidiary) and Geoserve Marketing. Under the Contract, Geoserve Marketing
          was
          to sell up to 49% of the working interest in certain oil and gas properties
          owned by Trendsetter. At $55,000 per point, this was to bring in proceeds
          of
          $2,695,000 once sold out. Geoserve Marketing was given the responsibilities
          to
          sell working interest in our oil and gas leases; obtain executed documents
          for
          such sales as required by us; help prepare the marketing materials for
          working
          interest sales; obtain investor nondisclosure agreements and other
          representations from all prospective nonoperators; obtain a check or wired
          funds
          from and signatures of nonoperators on all pertinent operating agreement
          forms;
          pay expenses for working interest promotion including but not limited to
          any
          brokerage fees and referral fees. Trendsetter agreed to pay 20% of the
          proceeds
          to Geoserve Marketing in return for these services. On June 30, 2005, the
          Audit
          Committee preapproved an extension of the working interest sales contract
          through July 30, 2005. As of June 30, 2005, 18.5% or $1,017,500 of a total
          of
          49% planned had been sold and Geoserve Marketing had been paid promotion
          fees of
          $203,500.  On July 29, 2005 the Audit Committee preapproved that
          Trendsetter Production Company may extend the term of the contract with
          Geoserve
          Marketing until sales of working interests total $2,695,000 or we have
          determined that we are have positive cash flow or we otherwise reach a
          cash
          position net of current liabilities equal to at least $1,500,000 with projected
          cash surplus to last a minimum of one year based on current operations.
          As of
          September 26, 2005, 32.5% of the working interest has been sold for proceeds
          of
          $1,787,500 and a total of $357,500 has been paid to Geoserve
          Marketing.
On
          May 9,
          2005, Harry James Briers, Executive Vice President, requested and obtained
          preapproval from the Audit Committee to rehire Mr. Jeremy Driver (son-in-law
          of
          Michael E. Watts, brother of the Chief Executive Officer), a past employee
          of
          Hyperdynamics Corporation, to work as General Manager for HYD. Mr. Driver
          had
          just been honorably discharged from the United States Air Force with the
          rank of
          Lieutenant. The Audit Committee approved the request and Mr. Driver was
          hired by
          Mr. Briers at an initial salary of $45,000 annually.
In
          connection with HYD and Trendsetter Production Company.
In
          April
          2004, we purchased 100% of the stock of HYD for $375,000 to be paid in
          Hyperdynamics common stock in four quarterly installments between April
          2004 and
          January 2005. At the time of acquisition, HYD had no operations and consisted
          solely of assets donated to it by its initial shareholders. As of June
          30, 2005,
          the entire purchase price has been paid. The final purchase price allocation
          was:
Inventory
$
15,400
Field
                    equipment
359,600
Total
                    assets
$
375,000
Liabilities
0
$
375,000
58
The
          initial employment agreements with the previous owners of HYD provided
          for
          bonuses in the form of three contingent notes payable, of up to $856,000
          that
          may be paid based upon HYD's net income over the next five years. The payments
          will be 25% of the net income for each quarter, if there is net income
          after
          offsetting any losses from previous quarters. As of June 30, 2005, HYD
          had a
          cumulative net loss of approximately $1,381,524. This amount would need
          to be
          earned as net income in current and future periods prior to having to pay
          the
          contingent note with 25% of net income in excess of the recovery
          amount.
In
          conjunction with our purchase of HYD, we entered into two employment agreements
          with HYD's prior owners whereby we agreed to pay two employees $3,500 per
          month.
          Under the contracts, we may terminate the employment agreements for cause,
          or if HYD experiences a cumulative net loss any time after the first nine
          months
          of operation. Both employees have been terminated.
The
          previous owners of HYD had also previously owned Trendsetter Production
          Company
          ("TPC"). In January 2005, we acquired all of the equity of Trendsetter at a de
          minimis cost. We purchased TPC so that we could acquire and drill oil and
          gas
          leases under the name of TPC, which is a licensed oil and gas operator
          in the
          state of Louisiana. At the time of the purchase, Trendsetter owned one
          oil and
          gas lease, which it had acquired in September 2004 for nominal consideration,
          and it had no liabilities. This transaction involved entities under common
          control, and Trendsetter's asset was recorded at historical cost.
In
          connection with Steven Plumb.
Steven
          Plumb is our CFO. Mr. Plumb became our CFO in November 2005. We have a
          one year contract with Clear Financial Solutions, Inc., a company owned
          by Mr.
          Plumb, which has agreed to provide us with a so called "contract"
CFO, namely Mr. Plumb. We will pay a fee directly to Clear Financial
          Solutions, Inc. in the estimated amount of approximately $3,300 to$ 4,950
          per
          month for Mr. Plumb's services as our CFO and some additional services
          provided
          to us by Clear Financial Solutions, Inc.
DESCRIPTION
          OF SECURITIES
Common
          Stock.
The
          holders of shares of our common stock are entitled to one vote per share
          on each
          matter submitted to a vote of stockholders. If we are required to go into
          liquidation, holders of common stock are entitled to share ratably in the
          distribution of assets remaining after payment of liabilities and preferred
          stock. Holders of common stock have no cumulative voting rights. Holders
          of
          common stock have no preemptive rights. Holders of common stock are entitled
          to
          dividends as declared by the Board of Directors out of funds legally available.
          The outstanding common stock is validly issued and nonassessable. At June
          29, 2006, we have outstanding 46,308,573 shares of common stock.
Preferred
          Stock.
Series
          A
          Convertible Preferred Stock was issued in January 2000 in the amount of
          1,945
          shares. The stated value is $1,000 per share and par value is $.001. It
          is
          convertible into Hyperdynamics' common stock at a price of the lower of the
          trading price when purchased at $5.25 or 80% of the then current 5 day
          trading
          average. All or any of the stock may be converted at any time at the holder's
          option, and all shares outstanding as of January 30, 2002 were to be
          automatically converted. This Series is nonvoting and pays dividends of
          4%,
          payable at conversion in either cash or shares of common stock, at
          Hyperdynamics' option. 1,055 shares were converted to common stock in 2000
          and
          2001. Hyperdynamics has not converted any of the Series A shares since
          fiscal
          2001 because of claims filed in November 2001 in our lawsuit with the Series
          A
          shareholders. Since the outcome is not known and no conversion has been
          effected, Hyperdynamics has continued to accrue the dividend through September
          30, 2004. We evaluated the accrual as of September 30, 2004 and consider
          the
          accrual at that date to be adequate to cover the liability, if any, pursuant
          to
          the lawsuit.
Series
          B
          Convertible Preferred Stock was issued on May 31, 2001 in the amount of
          2,725
          shares of Series B Convertible Preferred Stock for the acquisition of SCS
          Corporation. The stated value is $1,000 per share and the par value is
          $.001.
          Each Series B share may vote 7,408 common shares for a total of 20,186,800
          votes. The shares are convertible to common stock at the lesser of $.135
          or 50%
          of the then current 5 day average trading price. Series B stockholders
          are
          entitled to a 4% cumulative dividend on the stated value, which is payable
          only
          upon conversion of the Series B Convertible Preferred Stock. Dividends
          may be
          paid in stock or cash at our option.
Cornell
            Warrants
We
            granted Cornell 3 warrants to purchase up to 2,1000,000 shares of common
            stock.
            The Cornell warrants expire in June 2011 and are in
three
            tranches consisting of:
(A)
one
                      warrant to purchase 955,000 shares of common stock at an exercise
                      price of $2.50 per share
(B)
one
                      warrant to purchase 715,000 shares of common stock at an exercise
                      price of $3.50 per share
(C)
one
                      warrant to purchase 430,000 shares of common stock at an exercise
                      price of $4.00 per share
.
Other
            Options and Warrants.
At
            June
            23, 2006, we have outstanding an aggregate of 6,088,778 other warrants that
            were issued for investors, employees and consultant compensation.
59
SELLING
          STOCKHOLDERS
The
          following table sets forth the name of each Selling Stockholder, the number
          of
          shares of common stock offered by each Selling Stockholder, the number
          of shares
          of common stock to be owned by each Selling Stockholder if all shares were
          to be
          sold in this offering and the percentage of our common stock that will be
          owned by each Selling Stockholder if all shares are sold in this offering.
          The
          shares of common stock being offered hereby are being registered to permit
          public secondary trading and the Selling Stockholders may offer all, none
          or a
          portion of the shares for resale from time to time.
Name
                    of Selling Stockholder
Shares
                    Owned Before Offering
Shares
                    Offered For Sale
Shares
                    Owned After If All Offered Shares Are Sold
Percentage
                    Owned After Offering If All Offered Shares Are
                    Sold
(1)
(2)
(2B)
(3)
(3)
2,310,796
                    (2A)
Cornell
                    Capital Partners, LP
(4)
-0-
5,100,000
-0-
-0-%
_______________________________
(1)
To
                      the best of our knowledge, no Selling Stockholder has a short
                      position in
                      our common stock. To the best of our knowledge, no Selling
                      Stockholder
                      that is a beneficial owner of any of these shares is a broker-dealer
                      or an
                      affiliate of a broker-dealer (a broker-dealer may be a record
                      holder). No
                      Selling Stockholder has held any position or office, or has
                      had any
                      material relationship with us or any of our affiliates within
                      the past
                      three years. Cornell has entered into a agreements to provide
                      us with
                      financing.
(2)
Cornell's
                      beneficial ownership of our common stock is contractually capped
                      at 4.99%
                      of the shares outstanding at any particular time. Cornell cannot
                      convert
                      the debentures nor exercise the warrants so as to exceed the
                      4.99% common
                      stock beneficial ownership contractual limit.
(2A)
Represents
                      4.99% of our outstanding common stock as of the filing date
                      of the
                      registration statement.
(2B)
Includes
                      3,000,000 shares underlying debentures and 2,100,000 shares
                      underlying
                      warrants.
(3)
Assumes
                      no sales are transacted by the Selling Stockholder during the
                      offering
                      period.
(4)
The
                      General Partner of Cornell Capital Partners, LP is Yorkville
                      Advisors,
                      LLC. Mark Angelo is the control person of Yorkville Advisors,
                      LLC
.
                      Cornell became contractually obligated to purchase the three
                      debentures
                      and the three warrants.
60
PLAN
          OF DISTRIBUTION
The
          Selling Stockholders (of record ownership and of beneficial ownership)
          and any
          of their pledges, assignees, and successors-in-interest may, from time
          to time,
          sell any or all of their shares of common stock on any stock exchange,
          market or
          trading facility on which the shares are traded or in private transactions.
          These sales may be at fixed or negotiated prices. The Selling Stockholders
          are
          not required to sell any shares in this offering. There is no assurance
          that the
          Selling Stockholders will sell any or all of the common stock in this offering.
          The Selling Stockholders may use any one or more of the following methods
          when
          selling shares:
-
Ordinary
                    brokerage transactions and transactions in which the broker-dealer
                    solicits purchasers;
-
Block
                    trades in which the broker-dealer will attempt to sell the shares
                    as agent
                    but may position and resell a portion of the block as principal
                    to
                    facilitate the transaction;
-
Purchases
                    by a broker-dealer as principal and resale by the broker-dealer
                    for its
                    own account;
-
An
                    exchange distribution following the rules of the applicable
                    exchange;
-
Privately
                    negotiated transactions;
-
An
                    agreement between a broker-dealer and a Selling Stockholder to
                    sell a
                    specified number of such shares at a stipulated price per
                    share;
-
A
                    combination of any such methods of
                    sale;
-
Any
                    other lawful method.
The
          Selling Stockholder may also engage in:
-
Buying
                    puts, which is a contract whereby the person buying the contract
                    may sell
                    shares at a specified price by a specified
                    date;
-
Selling
                    calls, which is a contract giving the person buying the contract
                    the right
                    to buy shares at a specified price by a specified
                    date;
-
Selling
                    under Rule 144 under the Securities Act, if available, rather
                    than under
                    this prospectus;
-
Other
                    transactions in our securities or in derivatives of our securities
                    and the
                    subsequent sale or delivery of shares by the stock
                    holder;
-
Pledging
                    shares to their brokers under the margin provisions of customer
                    agreements. If a Selling Stockholder defaults on a margin loan,
                    the broker
                    may, from time to time, offer and sell the pledged
                    shares.
61
Broker-dealers
          engaged by the Selling Stockholders may arrange for other broker-dealers
          to
          participate in sales. Broker-dealers may receive commissions or discounts
          from
          the Selling Stockholder in amounts to be negotiated. If any broker-dealer
          acts
          as agent for the purchaser of shares, the broker-dealer may receive commissions
          from the purchaser in amounts to be negotiated. We do not expect these
          commissions and discounts to exceed what is customary in the types of
          transactions involved.
We
          are
          required to pay all fees and expenses incident to the registration of the
          shares
          in this offering. However, we will not pay any commissions or any other
          fees in
          connection with the resale of the common stock in this offering.
If
          we are
          notified by a Selling Stockholder that they have a material arrangement
          with a
          broker-dealer for the resale of the common stock, then we would be required
          to
          amend the registration statement of which this prospectus is a part, and
          file a
          prospectus supplement to describe the agreements between the Selling Stockholder
          and the broker-dealer.
Our
          offering expenses are estimated to be:
Amount
                    Paid or be Paid (1)
SEC
                    registration fee
$
1,210.00
Printing
                    and engraving cost
1,000.00
Attorneys'
                    fees
25,000.00
Accounting
                    fees
10,000.00
Transfer
                    agent and registrar cost
1,000.00
Edgar
                    service provider cost
3,000.00
Miscellaneous
1,000.00
Total
$
42,210.00
(1)
          The
          amounts set forth are all estimates.
CHANGES
          IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
          DISCLOSURE
None.
INTEREST
          OF NAMED EXPERTS AND COUNSEL
Joel
          Seidner, Esq., Attorney At Law, 880 Tully Road, Suite 50, Houston,
          Texas 77079, tel. (281) 493-1311, has acted as our legal counsel for this
          offering. The validity of the shares offered by this prospectus has been
          passed
          upon for us by Mr. Seidner. Mr. Seidner owns 4,000 shares of our common
          stock.
Our
          consolidated balance sheets as of June 30, 2005 and 2004, and the consolidated
          statements of operations, stockholders' deficit, and cash flows, for each
          of the
          three years in the period ended June 30, 2005 have been included in the
          registration statement on Form S-1 of which this prospectus forms a part,
          in
          reliance on the report of Malone & Bailey, PC, Independent Registered Public
          Accounting Firm, given on the authority of that firm as experts in auditing
          and
          accounting.
DISCLOSURE
          OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
The
          Delaware General Corporation Law Code provides for indemnification as
          follows:
§
          145.  Indemnification of officers, directors, employees and agents;
          insurance.
(a)
          A
          corporation shall have power to indemnify any person who was or is a party
          or is
          threatened to be made a party to any threatened, pending or completed action,
          suit or proceeding, whether civil, criminal, administrative or investigative
          (other than an action by or in the right of the corporation) by reason
          of the
          fact that the person is or was a director, officer, employee or agent of
          the
          corporation, or is or was serving at the request of the corporation as
          a
          director, officer, employee or agent of another corporation, partnership,
          joint
          venture, trust or other enterprise, against expenses (including attorneys'
          fees), judgments, fines and amounts paid in settlement actually and reasonably
          incurred by the person in connection with such action, suit or proceeding
          if the
          person acted in good faith and in a manner the person reasonably believed
          to be
          in or not opposed to the best interests of the corporation, and, with respect
          to
          any criminal action or proceeding, had no reasonable cause to believe the
          person's conduct was unlawful. The termination of any action, suit or proceeding
          by judgment, order, settlement, conviction, or upon a plea of nolo contendere
          or
          its equivalent, shall not, of itself, create a presumption that the person
          did
          not act in good faith and in a manner which the person reasonably believed
          to be
          in or not opposed to the best interests of the corporation, and, with respect
          to
          any criminal action or proceeding, had reasonable cause to believe that
          the
          person's conduct was unlawful.
(b)
          A
          corporation shall have power to indemnify any person who was or is a party
          or is
          threatened to be made a party to any threatened, pending or completed action
          or
          suit by or in the right of the corporation to procure a judgment in its
          favor by
          reason of the fact that the person is or was a director, officer, employee
          or
          agent of the corporation, or is or was serving at the request of the corporation
          as a director, officer, employee or agent of another corporation, partnership,
          joint venture, trust or other enterprise against expenses (including attorneys'
          fees) actually and reasonably incurred by the person in connection with
          the
          defense or settlement of such action or suit if the person acted in good
          faith
          and in a manner the person reasonably believed to be in or not opposed
          to the
          best interests of the corporation and except that no indemnification shall
          be
          made in respect of any claim, issue or matter as to which such person shall
          have
          been adjudged to be liable to the corporation unless and only to the extent
          that
          the Court of Chancery or the court in which such action or suit was brought
          shall determine upon application that, despite the adjudication of liability
          but
          in view of all the circumstances of the case, such person is fairly and
          reasonably entitled to indemnity for such expenses which the Court of Chancery
          or such other court shall deem proper.
62
(c)
          To
          the extent that a present or former director or officer of a corporation
          has
          been successful on the merits or otherwise in defense of any action, suit
          or
          proceeding referred to in subsections (a) and (b) of this section, or in
          defense
          of any claim, issue or matter therein, such person shall be indemnified
          against
          expenses (including attorneys' fees) actually and reasonably incurred by
          such
          person in connection therewith.
(d)
          Any
          indemnification under subsections (a) and (b) of this section (unless ordered
          by
          a court) shall be made by the corporation only as authorized in the specific
          case upon a determination that indemnification of the present or former
          director, officer, employee or agent is proper in the circumstances because
          the
          person has met the applicable standard of conduct set forth in subsections
          (a)
          and (b) of this section. Such determination shall be made, with respect
          to a
          person who is a director or officer at the time of such determination,
          (1) by a
          majority vote of the directors who are not parties to such action, suit
          or
          proceeding, even though less than a quorum, or (2) by a committee of such
          directors designated by majority vote of such directors, even though less
          than a
          quorum, or (3) if there are no such directors, or if such directors so
          direct,
          by independent legal counsel in a written opinion, or (4) by the
          stockholders.
(e)
          Expenses (including attorneys' fees) incurred by an officer or director
          in
          defending any civil, criminal, administrative or investigative action,
          suit or
          proceeding may be paid by the corporation in advance of the final disposition
          of
          such action, suit or proceeding upon receipt of an undertaking by or on
          behalf
          of such director or officer to repay such amount if it shall ultimately
          be
          determined that such person is not entitled to be indemnified by the corporation
          as authorized in this section. Such expenses (including attorneys' fees)
          incurred by former directors and officers or other employees and agents
          may be
          so paid upon such terms and conditions, if any, as the corporation deems
          appropriate.
(f)
          The
          indemnification and advancement of expenses provided by, or granted pursuant
          to,
          the other subsections of this section shall not be deemed exclusive of
          any other
          rights to which those seeking indemnification or advancement of expenses
          may be
          entitled under any bylaw, agreement, vote of stockholders or disinterested
          directors or otherwise, both as to action in such person's official capacity
          and
          as to action in another capacity while holding such office.
(g)
          A
          corporation shall have power to purchase and maintain insurance on behalf
          of any
          person who is or was a director, officer, employee or agent of the corporation,
          or is or was serving at the request of the corporation as a director, officer,
          employee or agent of another corporation, partnership, joint venture, trust
          or
          other enterprise against any liability asserted against such person and
          incurred
          by such person in any such capacity, or arising out of such person's status
          as
          such, whether or not the corporation would have the power to indemnify
          such
          person against such liability under this section.
(h)
          For
          purposes of this section, references to "the corporation" shall include, in
          addition to the resulting corporation, any constituent corporation (including
          any constituent of a constituent) absorbed in a consolidation or merger
          which,
          if its separate existence had continued, would have had power and authority
          to
          indemnify its directors, officers, and employees or agents, so that any
          person
          who is or was a director, officer, employee or agent of such constituent
          corporation, or is or was serving at the request of such constituent corporation
          as a director, officer, employee or agent of another corporation, partnership,
          joint venture, trust or other enterprise, shall stand in the same position
          under
          this section with respect to the resulting or surviving corporation as
          such
          person would have with respect to such constituent corporation if its separate
          existence had continued.
63
i)
          For
          purposes of this section, references to "other enterprises" shall include
          employee benefit plans; references to "fines" shall include any excise taxes
          assessed on a person with respect to any employee benefit plan; and references
          to "serving at the request of the corporation" shall include any service as a
          director, officer, employee or agent of the corporation which imposes duties
          on,
          or involves services by, such director, officer, employee or agent with
          respect
          to an employee benefit plan, its participants or beneficiaries; and a person
          who
          acted in good faith and in a manner such person reasonably believed to
          be in the
          interest of the participants and beneficiaries of an employee benefit plan
          shall
          be deemed to have acted in a manner "not opposed to the best interests of the
          corporation" as referred to in this section.
(j)
          The
          indemnification and advancement of expenses provided by, or granted pursuant
          to,
          this section shall, unless otherwise provided when authorized or ratified,
          continue as to a person who has ceased to be a director, officer, employee
          or
          agent and shall inure to the benefit of the heirs, executors and administrators
          of such a person.
(k)
          The
          Court of Chancery is hereby vested with exclusive jurisdiction to hear
          and
          determine all actions for advancement of expenses or indemnification brought
          under this section or under any bylaw, agreement, vote of stockholders
          or
          disinterested directors, or otherwise. The Court of Chancery may summarily
          determine a corporation's obligation to advance expenses (including attorneys'
          fees).
Our
          Bylaws provide for indemnification. Our Bylaws--ARTICLE IV, as
          follows:
1.
INDEMNIFICATION. 
                    This corporation shall, to the maximum extent permitted from
                    time to time
                    under the law of the State of Delaware, indemnify and upon request
                    shall advance expenses to any person who is or was a party or
                    is
                    threatened to be made a party to any threatened, pending or completed
                    action, suit, proceeding or claim, whether civil, criminal, administrative
                    or investigative, by reason of the fact that such person is or
                    was or has
                    agreed to be a director or officer of this corporation or any
                    of its
                    direct or indirect subsidiaries or while such a director or officer
                    is or
                    was serving at the request of this corporation as a director,
                    officer,
                    partner, trustee, employee or agent of any corporation, partnership,
                    joint
                    venture, trust or other enterprise, including service with respect
                    to
                    employee benefit plans, against expenses (including attorney's
                    fees and
                    expenses), judgments, fines, penalties and amounts paid in settlement
                    incurred in connection with the investigation, preparation to
                    defend or
                    defense of such action, suit, proceeding or claim: provided,
                    however, that
                    the foregoing shall not require this corporation to indemnify
                    or advance
                    expenses to any person in connection with any action, suit, proceeding,
                    claim or counterclaim initiated by or on behalf of such person.
                    Such
                    indemnification shall not be exclusive of other indemnification
                    rights
                    arising under any bylaws, agreement, vote of directors or stockholders
                    or
                    otherwise and shall inure to the benefit of the heirs and legal
                    representatives of such person. Any person seeking indemnification
                    under
                    this Article IV shall be deemed to have met the standard of conduct
                    required for such indemnification unless the contrary shall be
                    established.
2.
INSURANCE.
                     The corporation may purchase and maintain insurance on behalf
                    of any
                    person who is or was a director, officer, employee or agent of
                    the
                    corporation, or is or was serving at the request of the corporation
                    as a
                    director, officer, employee or agent of another corporation,
                    partnership,
                    joint venture, trust or other enterprise against any liability
                    asserted
                    against him and incurred by him in any such capacity, or arising
                    out of
                    his status as such, whether or not the corporation would have
                    the power to
                    indemnify him against such liability under the provisions of
                    this Article
                    IV of the by-laws.
3.
DEFINITIONS.
                     For purposes of this Article IV, reference to the "corporation"
                    shall include, in addition to the resulting corporation, any
                    constituent
                    corporation (including any constituent of a constituent) absorbed
                    in a
                    consolidation or merger which, if its separate existence has
                    continued,
                    would have had power and authority to indemnify its directors,
                    officers
                    and employees or agents, so that any person who is or was a director,
                    officer, employee or agent of such constituent corporation, or
                    is or was
                    serving at the request of such constituent corporation as a director,
                    officer, employee or agent of another corporation, partnership,
                    joint
                    venture, trust or other enterprise, shall stand in the same position
                    under
                    the provisions of this Article IV with respect to the resulting
                    or
                    surviving corporation as he would have with respect to such constituent
                    corporation if its separate existence had continued. For purposes
                    of this
                    Article IV, references to "other enterprises" shall include employee
                    benefit plans; references to "fines" shall include any excise taxes
                    assessed on a person with respect to any employee benefit plan;
                    and
                    references to "serving at the request of the corporation" shall include
                    any service as a director, officer, employee or agent of the
                    corporation
                    which imposes duties on. or involves services by. such director,
                    officer,
                    employee, or agent with respect to an employee benefit plan,
                    its
                    participants, or beneficiaries; and a person who acted in good
                    faith and
                    in a manner he reasonably believed to be in the interest of the
                    participants and beneficiaries of an employee benefit plan shall
                    be deemed
                    to have acted in a manner "not opposed to the best interests of the
                    corporation" as referred to in this Article
                    IV.
Insofar
          as indemnification for liabilities arising under the Securities Act of
          1933 may
          be permitted to directors, officers and controlling persons of the registrant
          pursuant to the foregoing provisions, or otherwise, the registrant has
          been
          advised that in the opinion of the Securities and Exchange Commission such
          indemnification is against public policy as expressed in the Act and is,
          therefore, unenforceable. In the event that a claim for indemnification
          against
          such liabilities (other than the payment by the registrant of expenses
          incurred
          or paid by a director, officer or controlling person of the registrant
          in the
          successful defense of any action, suit or proceeding) is asserted by such
          director, officer or controlling person in connection with the securities
          being
          registered, the registrant will, unless in the opinion of its counsel the
          matter
          has been settled by controlling precedent, submit to a court of appropriate
          jurisdiction the question whether such indemnification by it is against
          public
          policy as expressed in the Act and will be governed by the final adjudication
          of
          such issue.
64
HYPERDYNAMICS
                        CORPORATION
Index
                        To Financial Statements
Page
Report
                        Of Independent Registered Public Accounting Firm
F-2
Consolidated
                        Balance Sheets as of June 30, 2005 and 2004
F-3
Consolidated
                        Statements of Operations for the years ended  June 30, 2005, 2004 and
                        2003
F-4
Consolidated
                        Statements of Changes in Stockholders' Equity for the years ended
                        June 30, 2005, 2004 and 2003
F-5
Consolidated
                        Statements of Cash Flows for the years ended June 30, 2005, 2004 and
                        2003
F-7
Notes
                        to Consolidated Financial Statements
F-9
Consolidated
                        Balance Sheet at March 31, 2006 (unaudited)
FF-1
Consolidated
                        Statements of Operations for the three and nine months ended
                        March 31,
                        2006 and 2005 (unaudited)
FF-2
Consolidated
                        Statements of Cash Flows for the nine months ended March
                        31, 2006
                        (unaudited)
FF-3
Notes
                        to Consolidated Financial Statements (unaudited)
FF-4
F-1
REPORT
              OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
              the
              Board of Directors and Stockholders
Hyperdynamics
              Corporation
Houston,
              Texas
We
              have
              audited the accompanying consolidated balance sheets of Hyperdynamics
              Corporation and subsidiaries as of June 30, 2005 and 2004, and the
              related
              consolidated statements of operations, changes in stockholders' equity,
              and cash
              flows for each of the three years in the period ended June 30, 2005. These
              financial statements are the responsibility of Hyperdynamics' management.
              Our
              responsibility is to express an opinion on these financial statements
              based on
              our audits.
We
              conducted our audits in accordance with standards of Public Company
              Accounting
              Oversight Board (United States). Those standards require that we plan
              and
              perform the audits to obtain reasonable assurance about whether the
              financial
              statements are free from material misstatement. An audit includes examining,
              on
              a test basis, evidence supporting the amounts and disclosures in the
              financial
              statements. An audit also includes assessing the accounting principles
              used and
              significant estimates made by management, as well as evaluating the
              overall
              financial statement presentation. We believe that our audits provide
              a
              reasonable basis for our opinion.
In
              our
              opinion, the consolidated financial statements referred to above present
              fairly,
              in all material respects, the financial position of Hyperdynamics Corporation
              as
              of June 30, 2005 and 2004, and the results of its operations and its
              cash flows
              for each of the three years in the period ended June 30, 2005, in
              conformity with accounting principles generally accepted in the United
              States of
              America.
MALONE &
              BAILEY, PC
www.malone-bailey.com
Houston,
              Texas
September
              21, 2005
F-2
HYPERDYNAMICS
              CORPORATION
CONSOLIDATED
              BALANCE SHEETS
As
              of
              June 30, 2005 and 2004
2005
2004
ASSETS
Current
                        Assets
Cash
$
259,448
$
3,149,441
Restricted
                        certificate of deposit
65,445
129,750
Accounts
                        receivable, net of allowance for doubtful accounts of $31,242
                        and $16,451,
                        respectively
19,635
28,244
Inventory
3,637
83,730
Prepaid
                        expense
167,250
130,384
Other
                        current assets
-0-
167
Total
                        Current Assets
515,415
3,521,716
Property
                        and equipment, net of accumulated depreciation of $314,171
                        and $207,667,
                        respectively
599,092
406,821
Investment
                        in Oil and Gas Properties, using Full Cost Method of
                        Accounting
4,072,503
3,191,565
Restricted
                        certificate of deposit
-0-
65,445
Deposit
22,312
21,632
Customer
                        list, net of accumulated amortization of $4,441 in 2004
-0-
75,483
TOTAL
                        ASSETS
$
5,209,322
$
7,282,662
LIABILITIES
                        AND STOCKHOLDERS' EQUITY
Current
                        Liabilities
Current
                        portion of installment notes payable
247,750
$
126,670
Accounts
                        payable and accrued expenses
558,314
319,231
Accounts
                        payable seismic data
650,000
650,000
Deferred
                        Gain
73,464
-0-
Customer
                        deposits
-0-
3,264
Note
                        payable
-0-
281,250
Dividends
                        payable
372,398
352,953
Dividends
                        payable to related party
27,250
163,500
Total
                        Current Liabilities
1,929,176
1,896,868
Deferred
                        Rent
134,697
141,482
Long-term
                        portion of installment notes payable
-0-
43,372
Mandatorily
                        redeemable preferred stock, net of $25,750 unamortized offering
                        costs and
                        $206,000 unamortized discount in 2004
-0-
540,750
Total
                        Liabilities
2,063,873
2,622,472
Commitments
                        and Contingencies
0
Stockholders'
                        Equity
Convertible
                        preferred stock, par value $.001; stated value $1,000; 20,000,000
                        authorized; Series A - 1,945 shares issued and outstanding
2
2
Series
                        B - 2,725 shares issued and outstanding
3
3
Common
                        Stock, par value $.001; 50,000,000 shares authorized; 42,168,410
                        and
                        41,206,953 shares issued and outstanding
42,168
41,207
Additional
                        paid in capital
22,915,690
19,086,822
Accumulated
                        deficit
(19,812,414
)
(14,467,844
)
Total
                        Stockholders' Equity
3,145,449
4,660,190
TOTAL
                        LIABILITIES AND STOCKHOLDERS' EQUITY
$
5,209,322
$
7,282,662
See
                        accompanying summary of accounting policies and notes to
                        financial
                        statements.
F-3
HYPERDYNAMICS
              CORPORATION
CONSOLIDATED
              STATEMENTS OF OPERATIONS
Years
              Ended June 30, 2005, 2004 and 2003
2005
2004
2003
Revenues
$
172,699
$
38,344
468,022
Operating
                        Expenses
Cost
                        of revenues
1,348,529
207,200
469,158
Selling
63,225
48,568
38,745
General
                        and administrative
3,536,190
2,838,486
1,493,820
Impairment
704,061
Depreciation
                        and amortization
124,660
61,004
176,938
Total
                        Operating Expenses
5,072,604
3,155,258
2,882,722
LOSS
                        FROM OPERATIONS
(4,899,905
)
(3,116,914
)
(2,414,700
)
Other
                        Income (Expense)
Interest
                        expense
(239,187
)
(474,463
)
(55,407
)
Interest
                        income
16,973
8,268
6,139
(Gain)
                        loss on retirement and sale of assets
17,159
0
(5,431
)
Loss
                        on retirement of mandatorily redeemable preferred stock
(76,847
)
0
0
Gain
                        on debt payoff
0
92,066
Total
                        Other Income (Expense)
(316,220
)
(374,129
)
(43,837
)
NET
                        LOSS
(5,216,125
)
(3,491,043
)
(2,458,537
)
Preferred
                        dividend requirement
(128,445
)
(186,779
)
(186,779
)
NET
                        LOSS CHARGEABLE TO COMMON SHAREHOLDERS
$
(5,344,570
)
$
(3,677,822
)
(2,645,316
)
Basic
                        and diluted loss per common share
$
(.13
)
$
(.12
)
(.12
)
Weighted
                        average shares outstanding
41,646,844
31,938,926
22,580,526
See
                        accompanying summary of accounting policies and notes to
                        financial
                        statements.
F-4
HYPERDYNAMICS
              CORPORATION
CONSOLIDATED
              STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Years
              Ended June 30, 2005, 2004 and 2003
Preferred
Common
Shares
Amount
Shares
Amount
Balances,
                        June 30, 2002
4,670
$
5
21,033,791
$
21,034
Common
                        stock issued for:
-
                        cash
4,371,811
4,372
-
                        exercise of options
573,821
574
-
                        services
405,526
405
-
                        accounts payable
383,643
384
Issuance
                        of stock options and warrants
Preferred
                        stock dividends
Funds
                        raised from sale of warrants to purchase Hyperdynamics Corporation
                        stock
                        in association with SCS Corp. units
Beneficial
                        conversion feature associated with convertible notes payable
                        to
                        officers
Payment
                        of preferred stock dividends in common shares
862,915
863
Net
                        loss
Balances,
                        June 30, 2003
4,670
5
27,631,507
27,632
Common
                        stock issued for:
-
                        cash, net
8,575,543
8,576
-
                        exercise of options for cash, net
179,000
179
-
                        cashless exercise of options, net of 257,070 shares
                        returned
2,976,263
2,976
-
                        services
181,250
181
-
                        accounts payable
35,489
35
-
                        conversion of notes payable
1,595,573
1,596
-
                        acquisition of HYD Resources
32,328
32
Issuance
                        of stock options and warrants
Preferred
                        stock dividends
Funds
                        raised from sale of warrants to purchase Hyperdynamics Corporation
                        stock
                        in association with SCS Corp. units
Net
                        loss
Balances,
                        June 30, 2004
4,670
5
41,206,953
41,207
Common
                        stock issued for:
-
                        exercise of options
321,500
321
-
                        services
155,756
156
-
                        conversion of mandatorily redeemable preferred stock
269,634
270
-
                        accounts payable
25,372
25
-
                        acquisition of HYD Resources
101,480
101
Issuance
                        of stock options and warrants
Preferred
                        stock dividends
Payment
                        of preferred stock dividends in common shares
87,715
88
Net
                        loss
Balances,
                        June 30, 2005
4,670
$
5
42,168,410
$
42,168
See
                        accompanying summary of accounting policies and notes to
                        consolidated
                        financial statements.
F-5
HYPERDYNAMICS
              CORPORATION
CONSOLIDATED
              STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Years
              Ended June 30, 2005, 2004 and 2003
(Continued)
Additional
                        Paid in Capital
Accumulated
                        Deficit
Totals
Balances,
                        June 30, 2002
$
8,491,055
$
(8,144,706
)
$
367,388
Common
                        stock issued for:
-
                        cash
668,628
673,000
-
                        exercise of options
116,065
116,639
-
                        services
112,216
112,621
-
                        accounts payable
105,336
105,720
Issuance
                        of stock options and warrants
500,427
500,427
Preferred
                        stock dividends
(186,779
)
(186,779
)
Funds
                        raised from sale of warrants to purchase Hyperdynamics Corporation
                        stock
                        in association with SCS Corp. units
35,903
35,903
Beneficial
                        conversion feature associated with convertible notes payable
                        to
                        officers
243,934
243,934
Payment
                        of preferred stock dividends in common shares
171,720
172,583
Net
                        loss
(2,458,537
)
(2,458,537
)
Balances,
                        June 30, 2003
10,445,284
(10,790,022
)
(317,101
)
Common
                        stock issued for:
-
                        cash, net
5,870,237
5,878,813
-
                        exercise of options for cash, net
67,071
67,250
-
                        cashless exercise of options, net of 257,070 shares
                        returned
(27,948
)
(24,972
)
-
                        services
393,557
393,738
-
                        accounts payable
76,204
76,239
-
                        conversion of notes payable
266,460
268,056
-
                        acquisition of HYD Resources
93,718
93,750
Issuance
                        of stock options and warrants
1,783,642
1,783,642
Preferred
                        stock dividends
(186,779
)
(186,779
)
Funds
                        raised from sale of warrants to purchase Hyperdynamics
Corporation
                        stock in association with SCS Corp. units
118,597
118,597
Net
                        loss
(3,491,043
)
(3,491,043
)
Balances,
                        June 30, 2004
19,086,822
(14,467,844
)
4,660,190
Common
                        stock issued for:
-
                        exercise of options
167,304
167,625
-
                        services
389,904
390,060
-
                        conversion of mandatorily redeemable preferred stock
849,077
849,347
-
                        accounts payable
63,187
63,212
-
                        acquisition of HYD Resources
281,149
281,250
Issuance
                        of stock options and warrants
1,833,085
1,833,085
Preferred
                        stock dividends
(128,445
)
(128,445
)
Payment
                        of preferred stock dividends in common shares
245,162
245,250
Net
                        loss
(5,216,125
)
(5,216,125
)
$
22,915,690
$
(19,812,414
)
$
3,145,449
See
                        accompanying summary of accounting policies and notes to
                        consolidated
                        financial statements.
F-6
HYPERDYNAMICS
                        CORPORATION
CONSOLIDATED
                        STATEMENTS OF CASH FLOWS
Years
                        Ended June 30, 2005, 2004 and 2003
2005
2004
2003
CASH
                        FLOWS FROM OPERATING ACTIVITIES
Net
                        loss
$
(5,216,125
)
$
(3,491,043
)
$
(2,458,537
)
Adjustments
                        to reconcile net loss to cash used in operating
                        activities:
Depreciation
                        and amortization
124,659
61,004
176,938
Stock
                        issued for services
48,010
-0-
112,621
Options
                        and warrants issued
1,833,085
1,783,642
500,427
Beneficial
                        conversion feature associated with convertible notes payable
                        to
                        officers
-0-
249,066
18,990
(Gain)/loss
                        on disposition of assets
17,160
-0-
(5,431
)
Impairment
-0-
-0-
704,061
Bad
                        debt expense
14,791
(216
)
11,671
Accretion
                        of interest and amortization of offering costs of mandatorily
                        redeemable
                        Preferred stock
231,750
231,750
-0-
Loss
                        on retirement of mandatorily redeemable Preferred stock
76,847
-0-
-0-
Shares
                        withheld from cashless exercise of Options
--
(24,972
)
-0-
Changes
                        in assets and liabilities
Accounts
                        receivable
(6,182
)
(20,853
)
8,765
Inventory
46,016
(28,261
)
1,034
Other
                        current assets
(36,699
)
234
5,324
Accounts
                        payable and accrued expenses
302,291
(98,358
)
345,050
Accrued
                        officer salaries
-0-
-0-
110,330
Customer
                        deposits
(3,264
)
-0-
(36,878
)
Change
                        in deferred rent
(6,786
)
9,577
9,576
NET
                        CASH USED IN OPERATING ACTIVITIES
(2,574,447
)
(1,328,430
)
(496,059
)
CASH
                        FLOWS FROM INVESTING ACTIVITIES
Purchases
                        of property and equipment
(266,956
)
(129,112
)
(35,932
)
Decrease
                        in restricted cash
129,750
86,391
82,724
Proceeds
                        from sale of assets
13,413
-0-
39,356
Investment
                        in unproved property
(1,250,406
)
(1,900,990
)
(321,233
)
Return
                        of deposit
(680
)
1,800
-0-
NET
                        CASH USED IN INVESTING ACTIVITIES
(1,374,879
)
(1,941,911
)
(235,085
)
CASH
                        FLOWS FROM FINANCING ACTIVITIES
Proceeds
                        from sale of common stock, net
-0-
5,878,813
673,000
Proceeds
                        from exercise of options, net
167,625
67,250
116,639
Proceeds
                        from sale of units consisting of warrants in Hyperdynamics
                        and preferred
                        stock in subsidiary, net of $39,500 and $12,000 offering
                        cost,
                        respectively
-0-
355,500
108,000
Proceeds
                        from sale of working interest in oil and gas properties,
                        net
814,000
-0-
-0-
Proceeds
                        from installment debt
227,454
-0-
-0-
Payments
                        on installment debt
(149,746
)
(57,798
)
(19,493
)
NET
                        CASH PROVIDED BY FINANCING ACTIVITIES
1,059,333
6,243,765
878,146
See
                        accompanying summary of accounting policies and notes to
                        financial
                        statements.
F-7
HYPERDYNAMICS
                        CORPORATION
CONSOLIDATED
                        STATEMENTS OF CASH FLOWS
Years
                        Ended June 30, 2005, 2004 and 2003
(Continued)
2005
2004
2003
Net
                          Change In Cash
(2,889,993
)
2,973,424
147,002
CASH
                          AT BEGINNING OF PERIOD
3,149,441
176,017
29,015
CASH
                          AT END OF PERIOD
$
259,448
$
3,149,441
$
176,017
SUPPLEMENTAL
                          DISCLOSURES
Interest
                          paid in cash
$
7,437
$
10,100
$
21,107
Income
                          taxes paid in cash
-0-
-0-
-0-
NON-CASH
                          TRANSACTIONS
Issuance
                          of common stock for accounts payable
$
63,212
$
76,239
$
105,720
Payment
                          of preferred stock dividends in common shares
245,250
-0-
172,583
Conversion
                          of accrued officer salary to convertible notes payable
                          to officers net of
                          amortized discount
-0-
-0-
224,944
Conversion
                          of notes payable to common stock
-0-
268,056
-0-
Conversion
                          of mandatorily redeemable preferred stock
849,347
-0-
-0-
Issuance
                          of stock for oil and gas properties
342,050
393,738
-0-
Purchase
                          of HYD Resources for stock and note payable
-0-
375,000
-0-
Stock
                          issued for note payable
281,250
-0-
-0-
See
              accompanying summary of accounting policies and notes to financial
              statements.
F-8
Hyperdynamics
              Corporation
Notes
              To
              Consolidated Financial Statements
Note
              1 - Significant Accounting Policies
Nature
              of
              business. Hyperdynamics Corporation (Hyperdynamics) is a Delaware corporation
              formed in March 1996. Hyperdynamics utilizes its integrated technology
              infrastructure to provide support to its wholly-owned subsidiaries,
              SCS
              Corporation (SCS), HYD Resources Corporation (HYD), and Trendsetter
              Production
              Company (Trendsetter). Through SCS, Hyperdynamics focuses on oil and
              gas
              exploration offshore Guinea. SCS began operations in oil and gas exploration,
              seismic data acquisition, processing, and interpretation in late fiscal
              2002. In
              April 2004, Hyperdynamics acquired HYD, and in January 2005, Hyperdynamics
              acquired Trendsetter, an oil and gas operator in Louisiana that had
              been under
              common ownership with HYD. Trendsetter owns oil and gas leases. It
              contracts
              with its sister company, HYD, which drills new wells in shallow, proven
              areas
              and implements production facilities on Trendsetter leases to produce
              oil and
              gas. The fiscal year-end is June 30. Basis of presentation. The consolidated
              financial statements include the accounts of Hyperdynamics and its
              wholly-owned
              subsidiaries, SCS, HYD Resources Corporation, and Trendsetter Production
              Company. Significant inter-company accounts and transactions have been
              eliminated. Estimates and assumptions. Preparing financial statements
              in
              conformity with accounting principles generally accepted in the United
              States of
              America requires management to make estimates and assumptions that
              affect the
              reported amounts of assets, liabilities, revenue and expenses at the
              balance
              sheet date and for the period then ended. Actual results could differ
              from these
              estimates. Cash and cash equivalents include all highly liquid investments
              purchased with original maturity of three months or less. Restricted
              cash is a
              certificate of deposit at a bank that uses the letter of credit as
              collateral
              for supporting Hyperdynamics' lease commitment. The CD matures on May
              9, 2006
              and accrues interest at 1.3% annually. The restriction on the CD will
              be lifted
              on November 1, 2005. Revenue recognition. Revenue, if any, from tape
              conversions, consulting and oil field services, is recognized when
              services are
              rendered. Revenues for oil and gas sales are recognized at the point
              when title
              to the oil or gas passes to the customer. For oil sales, this occurs
              when the
              customer's truck takes delivery of oil from Trendsetter's storage tanks.
              Property and equipment. Hyperdynamics follows the full cost accounting
              method to
              account for the costs incurred in the acquisition, exploration, development
              and
              production of oil and gas reserves. Under this method, all costs including
              internal costs that are directly related to acquisition, exploration,
              and
              development activities are capitalizable as oil and gas property
              costs.
Amortization
              of unproved property costs begins when the properties become proved
              or their
              values become impaired. Hyperdynamics assesses the realizability of
              unproved
              properties at least annually or when there has been an indication that
              an
              impairment in value may have occurred. Impairment of unproved properties
              is
              assessed based on management's intention with regard to future exploration
              and
              development of individually significant properties and the ability
              of
              Hyperdynamics to obtain funds to finance such exploration and development.
              If
              the results of an assessment indicate that the properties are impaired,
              the
              amount of the impairment is added to the capitalized costs to be amortized.
              Under full cost accounting rules for each cost center, capitalized
              costs of
              proved properties, less accumulated amortization and related deferred
              income
              taxes, shall not exceed an amount (the "cost ceiling") equal to the sum of (a)
              the present value of future net cash flows from estimated production
              of proved
              oil and gas reserves, based on current economic and operating conditions,
              discounted at 10 percent, plus (b) the cost of properties not being
              amortized,
              plus (c) the lower of cost or estimated fair value of any unproved
              properties
              included in the costs being amortized, less (d) any income tax effects
              related
              to differences between the book and tax basis of the properties involved.
              If
              capitalized costs exceed this limit, the excess is charged as an impairment
              expense. Accounts receivable are written down to reflect management's
              best
              estimate based upon known specific analysis, historical experience,
              and other
              currently available evidence of the net collectible amount. Inventory
              consists
              of oil field equipment and is stated at the lower of cost or market
              using the
              first-in first-out basis (FIFO). Long-lived assets. Property, equipment
              and a
              building are stated on the basis of historical cost less accumulated
              depreciation. Depreciation is provided using the straight-line method
              over the
              estimated useful lives of the assets of 3 - 15 years. The Company follows
              Statement of Financial Accounting Standards No. 144, Accounting for
              the
              Impairment or Disposal of Long-Lived Assets, by reviewing such assets
              for
              impairment whenever events or changes in circumstances indicate that
              the
              carrying amount of an asset may not be recoverable. Impairment loss
              recognized
              is the excess of the carrying amount over the fair value of the asset.
              Accounts
              payable and accrued expenses as of June 30, 2005 and 2004 consist of
              the
              following:
2005
2004
Accounts
                        payable
$
332,635
$
252,601
Accrued
                        payroll expenses
112,249
17,378
Accrued
                        insurance
110,494
-0-
Taxes
                        payable
2,258
29,945
Accrued
                        warranty
678
1,831
Current
                        portion of deferred rent
-0-
17,476
Total
$
558,314
$
319,231
Deferred
              rent represents the difference between the rent expense per month as
              calculated
              based on the total contractual payments specified over the 10 year
              period of the
              lease and the actual monthly rent paid. It arises because the initial
              6 months
              of the lease were free and because the rent payment increases after
              the 60th
              month of the lease. The deferral reverses beginning in the year ended
              June 30,
              2005. Income taxes are computed using the tax liability method of accounting,
              whereby deferred income taxes are determined based on differences between
              financial reporting and tax bases of assets and liabilities and are
              measured
              using the enacted tax rates that will be in effect when the differences
              reverse.
              Hyperdynamics accounts for stock options issued to employees under
              the
              recognition and measurement principles of FASB Statement No. 123, Accounting
              for
              Stock-Based Compensation. No options are outstanding as of June 30,
              2005 and
              2004. The basic net loss per common share is computed by dividing the
              net loss
              chargeable to common stockholders by the weighted average number of
              common
              shares outstanding. Diluted net loss per common share is computed by
              dividing
              the net loss applicable to common stockholders, adjusted on an "as if converted"
basis, by the weighted average number of common shares outstanding
              plus
              potential dilutive securities. For the years ended June 30, 2005, 2004
              and 2003,
              potential dilutive securities had an anti-dilutive effect and were
              not included
              in the calculation of diluted net loss per common share. Recently issued
              accounting pronouncements. Hyperdynamics does not expect the adoption
              of
              recently issued accounting pronouncements to have a significant impact
              on
              Hyperdynamics' results of operations, financial position or cash flow.
              Reclassifications.  Certain prior year amounts have been reclassified to
              conform with the current year presentation.
Note
              2 - HYD Resources Corporation and Trendsetter Production
              Company
In
              April
              2004, Hyperdynamics purchased 100% of the stock of HYD for $375,000
              to be paid
              in Hyperdynamics common stock in four quarterly installments to be
              paid between
              April 2004 and January 2005. At the time of acquisition, HYD had no
              operations
              and consisted solely of assets donated to the company by its initial
              shareholders. As of June 30, 2005, the entire purchase price has been
              paid. The
              final purchase price allocation is:
Inventory
$
15,400
Field
                        equipment
359,600
Total
                        assets
$
375,000
Liabilities
0
Net
                        Assets
$
375,000
F-9
HYD
              is a
              dealer of used equipment and it provides oil field services, such as
              well
              workovers, drilling services, and the repair and leasing of equipment
              to oil
              field operators. In conjunction with the purchase of HYD, Hyperdynamics
              entered
              into two employment agreements with HYD's prior owners under which
              Hyperdynamics
              agreed to pay two employees $3,500 per month. Under the contracts,
              Hyperdynamics
              may terminate the employment agreements for cause, or if HYD experiences
              a
              cumulative net loss any time after the first nine months of operation.
              One of
              the employees was terminated early in 2005 and the other remains as
              the primary
              operating officer. The initial employment agreements stipulated that
              bonuses, in
              the form of three contingent notes payable, of up to $856,000 will
              be paid based
              upon HYD's net income over the next five years. The payments will be
              25% of the
              net income for each quarter, if there is net income after offsetting
              any losses
              from previous quarters. As of June 30, 2005, HYD had a cumulative net
              loss of
              approximately $1,381,524. This amount would need to be earned as net
              income in
              current and future periods prior to having to pay the contingent note
              with 25%
              of net income in excess of the recovery amount. The previous owners
              of HYD also
              previously owned Trendsetter Production Company (Trendsetter), a Louisiana
              oil
              and gas operator. In January 2005, Hyperdynamics acquired Trendsetter.
              Trendsetter at that time had no operations and one oil lease of nominal
              cost.
              This transaction involved entities under common control; accordingly,
              Trendsetter's asset was recorded at historical cost. The reporting
              segment for
              the HYD and Trendsetter Production Company is designated as "HYDR".
Note
              3 - Property and Equipment
A
              summary
              of property and equipment as of June 30, 2005 and 2004 is as
              follows:
2005
2004
Computer
                        equipment and software
3
                        years
$
153,689
$
193,400
Office
                        equipment and furniture
5
                        years
13,892
13,892
Oil
                        field equipment
3
                        years
64,252
-0-
Oil
                        field equipment
5
                        years
551,038
-0-
Other
                        equipment
5
                        years
80,392
407,196
Building
15
                        years
25,000
-0-
Land
N/A
25,000
-0-
Total
                        cost
913,263
614,488
Less:
                        accumulated depreciation and amortization
(314,171
)
(207,667
)
Net
                        carrying value
$
599,092
$
406,821
Hyperdynamics
              reviews assets for impairment whenever events or changes in circumstances
              indicate that the carrying amount of an asset may not be recoverable.
              During the
              years ended June 30, 2005 and 2004, there was no impairment of
              Hyperdynamics' assets. During the year ended June 30, 2003, Hyperdynamics
              had a goodwill impairment of $380,000 and an asset impairment of
              $354,061.
Note
              4 - Investment in Oil and Gas Properties
Investment
              in Oil and Gas Properties consist of Hyperdynamics' concession in offshore
              Guinea, as previously disclosed, and leaseholds in Louisiana, USA.
              Proved Oil
              and Gas Properties relate to three leases in Louisiana, USA. The following
              table
              provides detail of costs to date by country as of June 30, 2005 and
              2004:
Republic
                        of Guinea
USA
Total
As
                        of June 30, 2005
Lease
                        acquisition costs
Proved
$
-0-
$
4,269
$
4,269
Unproved
290,452
13,329
303,781
Exploration
                        costs - unproved properties
Geological
                        and geophysical costs
3,782,051
-0-
3,782,051
Drilling
-0-
50,773
50,773
Development
                        costs
-0-
607,175
607,175
Purchased
                        proved reserves
-0-
64,990
64,990
Cost
                        recovery (sale of working Interest)
-0-
(740,536
)
(740,536
)
$
4,072,503
$
0
$
4,072,503
As
                        of June 30, 2004
Lease
                        acquisition costs
Unproved
$
290,452
$
-0-
$
290,452
Exploration
                        costs - unproved properties
Geological
                        and geophysical costs
2,901,113
-0-
2,901,113
$
3,191,565
$
-0-
$
3,191,565
F-10
Sale
              of working interest
During
              March 2005, Hyperdynamics began to market working interest units in
              one lease in
              Louisiana, USA. The working interest units were priced at $55,000 for
              each one
              percent working interest. 49 units were available for sale. Marketing
              costs
              related to these units are 20%. As of June 30, 2005, 18.5 units had
              been sold,
              resulting in net proceeds of $814,000. The proceeds reduced the full
              cost pool
              related to the USA by $740,536. By the terms of the agreement, Hyperdynamics
              must drill an additional four wells to the casing point at its own
              expense.
              Because Hyperdynamics has this obligation to the working interest investors
              as
              of June 30, 2005, there will be no gain computed on the sale of these units
              until the obligation is fulfilled. Therefore, the balance of the net
              proceeds,
              $73,464, is reflected as deferred gain as of June 30, 2005.
Republic
              of Guinea Production Sharing Agreement (PSA)
Under
              the
              PSA, SCS had the following obligations:
a.
Pursuant
                        to the PSA, a payment to the Government of Guinea of $250,000
                        was made in
                        June 2003. The PSA specifies royalties and production sharing
                        if oil and
                        gas is discovered offshore Guinea . The PSA was filed in
                        a Form 8-K filed
                        on July 29, 2005,
b.
SCS
                        must perform 2-D seismic and other work on 4,000 kilometers
                        of seismic
                        acquired in 2003, as well as additional work on pre-acquired
                        seismic,
                        exceeding the work requirement obligation of the PSA for
                        the First
                        Exploration Period which ended in December 2003. SCS has
                        continued its
                        work in 2004 and 2005 and contracted with third parties for
                        a satellite
                        seeps study and a coring analysis as well as obtaining an
                        independent
                        interpretation of its data from an internationally known
                        vendor,
                        PGS.
c.
During
                        the second exploration period, SCS is required to drill at
                        least one
                        exploratory well at an estimated cost of $10 million. The
                        time frame SCS
                        has to complete this requirement is at least four years.
                        Because of events
                        as explained below, management believes the time frames are
                        frozen as a
                        case for Force Majeure has occurred pursuant to the
                        PSA.
If
              SCS
              were to continue to perform under the 2002 PSA as farmed out from USOil,
              SCS
              would pay USOil $1,600,000 conditionally if SCS obtains third party
              financing
              for this Guinea development project from an oil company partner participating
              in
              a working interest purchase or a 3rd party financing company. Also
              under the
              2002 PSA and associated Farmout Agreement with USOil, a 3% royalty
              on oil and
              gas production would also be paid to USOil. With the events surrounding
              the 8-K
              filed in July with regard to a fake termination letter as discussed
              below, the
              ensuing litigation with USOil Corporation may ultimately determine
              any amounts
              at all to be paid pursuant to the original terms of the Farmout Agreement.
              While
              in Guinea, the Vice President and CEO also hired a new in-country general
              manager to facilitate consistent daily communication with the Government.
              On
              June 27, 2005, SCS made a request for a drilling permit to the Guinea
              Government
              through its USOil contact. On July 12, 2005, USOil claimed that the
              Guinea
              Government had cancelled the Royalties and Production Sharing Agreement.
              We
              believe that the PSA is still in full force and effect because none
              of the terms
              regarding disputes with respect to any issues regarding the PSA, including
              proper procedures for termination of the PSA were followed whatsoever.
              The terms
              of the PSA regarding disputes and termination were literally ignored.
              Additionally, the purported termination letter did not specify the
              reason for
              termination and the letter was not signed by the Minister of the private
              office
              of the President of Guinea, or the President himself. Hyperdynamics
              hired
              Famourou Kourouma as its new Vice President for Guinea Affairs in
              August.
Famourou
              Kourouma
and CEO
              Kent Watts traveled to Guinea. They have determined from direct meetings
              with
              the Ministre Secretaire General de la Presidence de la Republique de
              Guinee that
              the termination letter did not originate from his office. For the termination
              letter to be legitimate it would have had to be initiated by his office
              with his
              knowledge. The termination letter was a fake. The Government has represented
              that SCS will be allowed to resume work and the Ministre Secretaire
              General is
              working on this by order of his Excelence President Lansana Conte.
Note
              5 - Accounts Payable Seismic Data
In
              February 2003, SCS agreed to pay $650,000 to Offshore Seismic Surveys,
              Inc.
              (OSS), an offshore seismic company, for OSS agreeing to release GHRC
              from the
              $550,000 due to OSS for the Guinea seismic data. The additional $100,000
              was
              charged to expense in 2003. OSS maintains a lien on the ownership and
              sale of
              1,000 kilometers of the seismic data acquired in 2002, for the $650,000
              less any
              payments made on this amount. Any user license sales proceeds generated
              from
              user licenses of the 2002 acquired data shall first go to pay off the
              $650,000
              liability at a rate of 90 percent of gross user license sales proceeds
              for OSS
              and 10 percent for SCS until the $650,000 is paid in full. Any funding
              arrangement SCS enters into with respect to the Guinea PSA, whereby
              all rights
              and obligations under the PSA are transferred, shall cause the $650,000
              to
              become immediately due upon signing and funding of such agreement.
Note
              6 - Installment Notes Payable
Installment
              notes payable consist of the following as of June 30, 2005 and
              2004:
F-11
2005
2004
Lease
                        payable in approximately 6 equal remaining monthly installments
                        of $1,693
                        including interest at 10% APR, and secured by electrical
                        equipment
$
9,872
$
28,191
Vendor
                        settlement payable in 9 equal remaining monthly installments
                        of $1,000
                        plus a balloon payment of $24,500 due May 1, 2006, no interest
                        and no
                        collateral
33,500
45,500
Lease/Purchase
                        payable for acquisition of oil and gas operations center
                        with 5 equal
                        remaining monthly installments of $6,541 including interest
                        of 12% APR,
                        and secured by a metal building of approximately 7,000 sq.
                        ft. located on
                        about 7/10 of an acre of land
31,725
-0-
Directors
                        and Officers Liability Insurance premium notes payable with
                        $20,994 down
                        and the balance in 9 monthly installments of $9,546 including
                        interest of
                        5.5% APR
104,970
-0-
Equipment
                        floater finance agreement, payable in one remaining
                        installment
800
-0-
Workman's
                        Compensation finance agreement payable with $10,117 down
                        and balance in 9
                        monthly installments of $4,826
49,786
-0-
Auto
                        insurance finance agreement payable with $6,185 down and
                        balance in 9
                        monthly installments of $1,276
17,097
-0-
Insurance
                        premium notes payable in 8 variable monthly installments
                        beginning at
                        about $12,000 and declining per month, including interest
                        at 7.8%
                        APR
-0-
96,351
Subtotal
247,750
170,072
Less
                        current portion
(247,750
)
(126,670
)
Long-term
                        portion
$
-0-
$
43,372
Note
              7 - Letter Of Credit
Hyperdynamics
              renewed its letter of credit for $65,445 with Frost Bank, and it now
              expires on
              October 31, 2005. The purpose of the letter of credit is to guarantee
              the lease
              payments on Hyperdynamics' office space. The letter of credit is guaranteed
              by a
              security interest in a certificate of deposit with Frost Bank that
              may not be
              redeemed until the letter of credit expires. There were no draws against
              this
              letter of credit as of June 30, 2005. The letter will not be renewed
              upon
              expiration and the funds will be free of restriction at that time.
Note
              8 - Mandatorily Redeemable Preferred Stock
As
              of
              June 30, 2004, 5.15 units consisting of 5.15 shares of SCS Series A
              Preferred
              Stock and warrants to purchase 257,500 shares of Hyperdynamics common
              stock at
              $.25 per share had been sold. The portion of the proceeds of these
              units that is
              allocable to the SCS preferred stock is $360,500 less $51,500 paid
              as a cost of
              offering leaving $309,000. The $51,500 was to be amortized until July
              1, 2005,
              the date on which the stock is redeemable at the stockholders' option.
              As of
              June 30, 2004, unamortized offering costs were $25,750. The proceeds
              were
              allocated $360,500 to the warrants and $154,500 to the Preferred Stock
              based on
              their relative fair market values. The warrants' fair market value
              was estimated
              using the Black-Scholes option pricing model. Variables used in the
              Black-Scholes option pricing model include (1) 3.0% risk-free interest
              rate, (2)
              expected warrant life is five years, the actual remaining life of the
              warrant,
              (3) expected volatility is the actual historical stock price fluctuation
              volatility and (4) zero expected dividends. The fair market value of
              the
              preferred stock was estimated as the discounted present value, using
              a discount
              rate of 30%, of the amount redeemable at the option of the holder,
              $150,000, on
              July 1, 2005, which is the first date that the preferred stock is redeemable
              at
              the holder's option. During the year ended June 30, 2005, Hyperdynamics
              retired
              5.15 units of SCS mandatorily redeemable preferred stock. Hyperdynamics
              offered
              payment of this obligation using Hyperdynamics common stock in lieu
              of cash, as
              provided by the original agreement. The investors received one share
              of
              Hyperdynamics common stock for each $1.91 of preferred stock outstanding.
              All
              investors accepted this offer as of March 31, 2005; a total of 269,634
              shares
              were issued to redeem the 5.15 units they owned. A loss of $76,847
              was recorded
              on the redemption.
Note
              9 - Income Taxes
Income
              taxes are not due since Hyperdynamics has had losses since inception.
              Hyperdynamics has net operating loss carryforwards of approximately
              $12,911,000
              at June 30, 2005.
Deferred
                        tax assets
$
4,389,000
Less:
                        valuation allowance
(4,389,000
)
Net
                        deferred taxes
$
0
F-12
Internal
              Revenue Section 382 restricts the ability to use these carryforwards
              whenever an
              ownership change as defined occurs. Hyperdynamics incurred such an
              ownership
              change on January 14, 1998 and again on June 30, 2001, As a result
              of the first
              ownership change, Hyperdynamics' use of net operating losses as of
              January 14,
              1998 of $949,000 are restricted to $151,000 per year. The availability
              of losses
              from that date through June 30, 2001 of $3,313,000 are restricted to
              $784,000
              per year. Losses in fiscal 2002 and beyond are not restricted. The
              net operating
              loss carryforwards expire from 2011 to 2025.
Note
              10 - Preferred Stock
Series
              A
              Convertible Preferred Stock was issued in January 2000 for net proceeds
              of
              $2,604,190. The stated value is $1,000 per share and par value is $.001.
              It is
              convertible into Hyperdynamics' common stock at a price of the lower
              of the
              trading price when purchased at $5.25 or 80% of the current 5-day trading
              average. All or any of the stock may be converted at any time at the
              holder's
              option, and all shares outstanding as of January 30, 2002 were to be
              automatically converted. This Series is non-voting and pays dividends
              of 4%,
              payable at conversion in either cash or shares of common stock, at
              Hyperdynamics' option. 1,055 shares were converted to common in 2000
              and 2001.
              Hyperdynamics has not converted any of the Series A shares since fiscal
              2001
              because of claims filed in November 2001 in the lawsuit with the Series
              A
              shareholders. Since the outcome is not known and no conversion has
              been
              effected, Hyperdynamics has continued to accrue the dividend through
              September
              30, 2004. Management evaluated the accrual as of September 30, 2004,
              and
              considers the accrual at that date to be adequate to cover the liability,
              if
              any, pursuant to the lawsuit. As of June 30, 2004, $352,953 in dividends
              were
              accrued. Dividends of $19,445 have been accrued in 2005, resulting
              in total
              accrued Series A dividends of $372,398 as of June 30, 2005. 2,725 shares
              of
              Series B Convertible Preferred Stock were issued for the acquisition
              of SCS
              Corporation on May 31, 2001. The stated value is $1,000 per share and
              the par
              value is $.001. Each Series B share may vote 7,408 common shares for
              a total of
              20,186,800 votes. The shares are convertible to common stock at the
              lesser of
              $.135 or 50% of the current 5-day average trading price. Series B stockholders
              are entitled to a 4% cumulative dividend on the stated value, which
              is payable
              only upon conversion of the preferred stock. Dividends may be paid
              in stock or
              cash at Hyperdynamics' option. Dividends accrued on the Series B as
              of June 30,
              2004 were $163,500. In 2005 dividends of $81,750 were accrued for the
              first
              three quarters of 2005, resulting in accrued dividends as of March
              31, 2005 of
              $245,250. The Board of Directors approved the issuance of 87,715 shares
              of
              restricted common stock to pay the March 31, 2005 accrued Series B
              dividend.
              Dividends were accrued for the fourth quarter leaving a June 30, 2005
              balance of
              $27,250. Accrued dividends on Series A and Series B stock as of June
              30, 2005
              and 2004 totaled $399,648 and $516,453, respectively. If all Preferred
              Series A
              and B shares were converted as of June 30, 2005, total common shares
              outstanding
              would be approximately 66,225,000 shares.
Note
              11 - Common Stock
During
              the year ended June 30, 2004, Hyperdynamics issued 35,489 shares of
              common stock
              for accounts payable of $76,239. Between November 2003 and March 2004,
              private
              investors purchased 8,575,543 shares of common stock and 3,534,903
              warrants with
              an exercise price of $2.00 per share, expiring in second quarter of
              2006, for
              $6,532,014. Offering costs were $653,201, resulting in net proceeds
              of
              $5,878,813. Additionally, during the year ended June 30, 2004, Hyperdynamics
              issued 181,250 shares for services valued at $393,738. Hyperdynamics'
              Officers
              converted their convertible notes payable during the year ended June
              30, 2004,
              which at that time totaled $268,056 in principal and interest, at a
              price of
              $.168. This resulted in the issuance of 1,595,573 shares. Hyperdynamics
              delivered 1,227,764 shares issued pursuant to the notes payable on
              December 31, 2003 and 367,809 shares, the balance of the shares issued
              pursuant to the notes payable, on January 14, 2004. During the year
              ended June
              30, 2004, 179,000 warrants were exercised for gross proceeds of $74,500;
              after
              offering costs of $7,250, net proceeds were $67,250. During the year
              ended June
              30, 2004, three Hyperdynamics Officers exercised 3,233,333 warrants
              with an
              exercise price of $.23 per share in a cashless exercise when Hyperdynamics
              stock
              fair market value was $2.99. 257,070 shares were deducted from the
              shares issued
              for taxes withheld of $24,976 and the exercise price of $743,667; thus
              the net
              exercise was 2,976,263 shares. Finally, during the year ended June 30,
              2004, Hyperdynamics issued 32,328 shares to pay the first $75,000 installment
              on
              the purchase of HYD Resources Corporation. During the year ended June
              30, 2005,
              Hyperdynamics issued 25,372 shares of common stock for accounts payable
              of
              $63,212; 101,480 shares of common stock were issued for $281,250 note
              payable to
              pay off the purchase price of HYD Resources Corporation; 20,006 shares
              of common
              stock were issued for services totaling $48,010; 135,750 shares of
              common stock
              were issued for $342,050 of oil and gas properties; 269,634 shares
              of common
              stock were issued to redeem $849,347 worth of the SCS Series A preferred
              stock;
              and 87,715 shares of common stock were issued to pay $245,250 of Series
              B
              accrued dividends. Also during 2005, 321,500 shares were issued for
              warrant
              exercises totaling $167,625.
Note
              12 - Stock Options and Warrants
Hyperdynamics'
              Stock Option Plan provides for the grant of non-qualified options to
              Directors,
              employees and consultants, and opportunities for Directors, Officers,
              employees
              and consultants to make purchases of stock in Hyperdynamics. In addition,
              Hyperdynamics issues stock warrants from time to time to employees,
              consultants,
              stockholders and creditors as additional financial incentives. The
              plans and
              warrant issuances are administered by the Board of Directors, which has
              substantial discretion to determine which persons, amounts, time, price,
              exercise terms, and restrictions, if any. Options differ from warrants
              in that
              the options awards are immediately exercisable and are assignable.
              In contrast,
              warrants have employment termination restrictions, vesting periods
              and are
              non-transferable.
F-13
During
              2005, Hyperdynamics did not grant any compensatory warrants or options.
              In 2004
              and 2003 respectively, Hyperdynamics granted 2,360,000 and 150,000
              warrants to
              consultants. The compensation cost recognized for these warrants was
              $1,833,085,
              $1,517,922 and $85,014 for the years ended June 30, 2005, 2004 and
              2003,
              respectively, based on the Black-Scholes option pricing model. During
              2005, 2004
              and 2003, Hyperdynamics issued warrants to employees in the amounts
              of -0- and
              333,333 and 4,510,000 warrants, respectively. There were 800,000 warrants
              forfeited during the year ended 2003 due to termination of employment.
              The
              compensation cost recognized for these warrants was $265,721 for the
              year ended
              June 30, 2004 and $415,412 in 2003, based on the Black-Scholes option
              pricing
              model. In addition to shares issued to consultants and employees, investors
              purchased 3,732,403 warrants in conjunction with purchases of SCS preferred
              stock and Hyperdynamics common stock. The weighted average fair value
              of the
              stock options granted during 2005, 2004 and 2003, was $-0- and $1.31
              and $.32,
              respectively. Variables used in the Black-Scholes option pricing model
              include
              (1) risk-free interest rates ranging from 1% to 5%, depending on the
              grant dates
              and the expected lives of the options, (2) expected option life is
              the actual
              remaining life of the options as of the grant date, (3) expected volatility
              is
              the actual historical stock price fluctuation volatility and (4) zero
              expected
              dividends.
Summary
              information regarding options and warrants is as follows:
Options
Weighted
                        Average Share Price
Warrants
Weighted
                        Average Share Price
Outstanding
                        June 30, 2002
164,636
$
1.15
6,272,500
$
1.16
Granted
5,906,463
.24
Exercised
(573,821
)
.20
Expired
(164,636
)
1.15
(525,000
)
1.21
Cancelled
                        due to repricing
(5,585,142
)
.48
Forfeited
(870,000
)
.28
Outstanding,
                        June 30, 2003
0
$
N/A
4,625,000
$
1.16
Granted
6,425,736
1.31
Exercised
(3,412,333
)
.28
Expired
(355,000
)
.83
Cancelled
                        due to repricing
-0-
-0-
Forfeited
-0-
-0-
Outstanding,
                        June 30, 2004
0
N/A
7,283,403
1.69
Granted
250,000
.55
Exercised
(321,350
)
.52
Expired
                        unused
(600,000
)
6.50
Outstanding,
                        June 30, 2005
0
N/A
6,611,903
$
1.27
F-14
Warrants
              outstanding and exercisable as of June 30, 2005:
Exercise
Price
Outstanding
Number
                        of
Shares
Remaining
life
Exercisable
Number
                        of
Shares
$.23
800,000
2
                        years
800,000
.25
175,000
3
                        years
175,000
.28
10,000
1
                        years
10,000
.50
100,000
1
                        years
100,000
.50
1,992,000
2
                        years
1,392,000
2.00
3,534,903
2
                        years
3,534,903
6,611,903
6,011,903
Note
              13 - Segment Information
Reportable
              segments
Hyperdynamics
              management has two reportable segments: SCS Corporation ("SCS") and its
              Louisiana operations ("HYD"). SCS is engaged in oil and gas exploration
              activities pertaining to offshore Guinea, West Africa. Additionally,
              it provides
              seismic data transcription and management services to support its activities
              and
              to external customers. The seismic data work is performed in the USA.
              HYD is
              engaged in oil and gas exploration and production activities in Louisiana,
              USA;
              it also provides some oilfield services to external customers. Hyperdynamics
              evaluates performance based on profit or loss from operations. The
              reportable
              segments are managed by separate management teams who are evaluated
              based on
              their segment's performance.
The
              following tables summarize certain balance sheet and income statement
              data about
              Hyperdynamics' reportable segments and corporate overhead for the years
              ended
              June 30, 2005, 2004 and 2003:
As
                          of June 30, 2005
SCS
HYD
Corporate
Total
Segment
                          assets
$
4,104,519
$
819,170
$
285,633
$
5,209,322
As
                          of June 30, 2004
SCS
HYD
Corporate
Total
Segment
                          assets
$
3,310,065
$
515,043
$
3,457,553
$
7,282,661
Year
                          ended June 30, 2005:
SCS
HYD
Corporate
Total
Revenues
                          from external customers
$
3,140
$
169,259
$
300
$
172,699
Depreciation,
                          depletion and amortization
28,499
77,370
18,791
124,660
Loss
                          from operations
(528,617
)
(1,508,093
)
(2,863,195
)
(4,899,905
)
Expenditures
                          for long-lived assets
888,630
958,092
16,708
1,863,430
Year
                            ended June 30, 2004:
Revenues
                            from external customers
$
18,314
$
9,974
$
10,056
$
38,344
Depreciation,
                            depletion and amortization
24,248
19,093
17,663
61,004
Loss
                            from operations
(407,622
)
(92,232
)
(2,617,060
)
(3,116,914
)
Expenditures
                            for long-lived assets
2,338,980
359,304
1,244
2,699,528
Year
                          ended June 30, 2003:
Revenues
                          from external customers
$
450,831
$
-0-
$
17,191
$
468,022
Depreciation,
                          depletion and amortization
365,081
-0-
515,919
881,000
Loss
                          from operations
(688,986
)
-0-
(1,719,147
)
(2,408,133
)
Expenditures
                          for long-lived assets
63,115
-0-
927,691
990,806
F-15
Product
              and Service Information
Year
              Ended June 30
2005
2004
2003
Revenues
                        from:
Seismic
                        data management
$
3,140
$
18,314
$
450,831
Computer
                        related sales
300
10,056
17,191
Oilfield
                        services
117,251
9,974
-0-
Oil
                        and gas production
52,008
-0-
-0-
Totals
$
172,699
$
38,344
$
468,022
Geographical
              Information
All
              revenues currently derive from domestic sources. All long-lived assets
              are
              located in the USA, except for rights associated with the Guinea offshore
              territory.
Note
              14 - Commitments and Contingencies
From
              time
              to time, Hyperdynamics and its subsidiaries are involved in a number
              of routine
              business disputes that may occur in the ordinary course of business.
              Hyperdynamics is unable to predict the outcome of such matters when
              they arise.
              Other than disputes currently disclosed under litigation, the company
              is unaware
              of any other disputes that exist and does not believe that the ultimate
              resolution of such matters would have a material adverse effect on
              the financial
              statements of Hyperdynamics.
Hyperdynamics
              leases its office space from AGP Westwood, LTD over a 10 year period.
              The
              company's rent under this lease has increased from $20,774 for months
              7-54, to
              $24,114 for months 55-120. The lease payments began on November 1,
              2000.
              Additional common area maintenance charges are assessed. At June 30,
              2005,
              future minimum payments are $289,364 per year in years 2006-2010, and
              $120,568
              in 2011. Rent expense for the years ended June 30, 2005, 2004 and 2003
              totaled
              $267,290, $274,214 and $268,040, respectively. Hyperdynamics has a
              termination
              option that may be exercised after 60 months of the lease. If the termination
              option is exercised, Hyperdynamics will be released from the lease
              after 69
              months. On May 5, 2005 the Company filed a lawsuit styled Hyperdynamics
              Corporation v. AGB Westwood L.P.; Cause No. 2005-30992; In the 165th
              Judicial
              District Court of Harris County, Texas. The Company alleges that AGB
              Westwood
              L.P. committed fraud and has breached the lease contract with Company.
              The
              Company intends to aggressively pursue damages for its claims and is
              looking to
              cancel the lease and move out in order to mitigate further damages.
In
              addition, Hyperdynamics is involved in a dispute with its Series A
              Preferred
              Stock shareholders over conversion rights to common stock and whether
              monetary damages are due for various claims against the preferred shareholders.
              The economic effects of and the probable outcome of this contingency
              are not
              known.
Hyperdynamics'
              subsidiary, SCS, has $350,000 remaining of a contingent note payable
              due to
              Seacon Computer Systems Inc., the former owners of SCS Corporation's
              assets.
As
              mentioned above, should Hyperdynamics' subsidiary, SCS, continue under
              the 2002
              PSA, Hyperdynamics will owe USOil $1,600,000 if SCS procures third
              party funding
              for the Guinea project (see Note 4).
Hyperdynamics'
              subsidiary, SCS, has arrangements with one individual and one corporation
              to
              provide geological and geophysical services in exchange for Hyperdynamics
              common
              stock. This arrangement was temporarily put on hold beginning in July
              2005.
              Should SCS continue with the 2002 PSA or proceed with rights to explore
              and
              exploit the concession off the coast of Guinea, Hyperdynamics may be
              obligated
              under these agreements to issue 41,250 - 46,250 shares per quarter,
              depending
              upon the price of Hyperdynamics common stock, or it may, at the company's
              option
              renegotiate or cancel such agreements going forward in any
              respect.
F-16
Note
              15 - Related Party Transactions
Related
              party transactions include payments to the CEO's brother, Michael Watts,
              as
              follows: during the year ended June 30, 2004, Michael Watts, the CEO's
              brother,
              received payment of $699,951 cash to pay for offering costs on private
              subscription agreements and warrants exercised. Additional offering
              costs will
              also be paid on 3,732,403 warrants purchased by private investors should
              they be
              exercised in the future. If all of these warrants were exercised, Michael
              Watts
              would receive approximately $712,000 to pay these additional costs.
Additionally,
              1,200,000 warrants with an exercise price of $.50 per share were issued
              to a
              company of which Michael Watts is president for public relations/investor
              relations services. The warrants vest quarterly from January 2004 through
              December 2005 and expire July 18, 2007. As of June 30, 2005, 960,000
              of these
              warrants have vested. The value of the 1,200,000 warrants, as computed
              using the
              Black-Scholes model, was $2,256,592 of which $1,101,493 and $959,895
              was
              recognized in 2005 and 2004, respectively. The balance will be recognized
              in the
              fiscal year ended June 30, 2006, when they vest.
On
              February 9, 2005 the Audit Committee of Hyperdynamics Corporation,
              acting under
              the Audit Committee Charter adopted by the Board of Directors on October
              18,
              2005, pre-approved a contract with Geoserve Marketing, an assumed name
              for
              Michael E. Watts, the brother of the Chief Executive Officer. The contract
              was
              executed by Trendsetter Production Company (a wholly owned subsidiary)
              with
              Geoserve Marketing. Under the Agreement Geoserve Marketing was to sell
              up to 49%
              of the working interest in certain oil and gas properties owned by
              Trendsetter.
              At $55,000 per point, this was to bring in gross revenues of $2,695,000
              once
              sold out. Geoserve Marketing was given the responsibilities to sell
              working
              interest on the company's oil and gas leases; obtain executed documents
              for such
              sales as required by the company; help prepare the marketing materials
              for
              working interest sales; obtain investor non-disclosure agreements and
              other
              representations from all prospective non-operators; obtain a check
              or wired
              funds from and signatures of non-operators on all pertinent operating
              agreement
              forms; pay expenses for working interest promotion including but not
              limited to
              any brokerage fees and referral fees. Trendsetter agreed to pay 20%
              of the
              proceeds to Geoserve Marketing in return for these services. On June
              30, 2005,
              the independent audit committee pre-approved an extension of the working
              interest sales contract through July 30, 2005. As of June 30, 2005, 18.5%
              or $1,017,500 of a total of 49% working interest had been sold and
              Geoserve
              Marketing had been paid promotion fees of $203,500. On July 29, 2005,
              the audit
              committee pre-approved that Trendsetter Production Company may extend
              the term
              of the contract with Geoserve Marketing until a total of gross sales
              of
              $2,695,000 has occurred or it has been determined that HYDR is cash
              flowing, as
              a whole, or the company otherwise reaches a cash position net of current
              liabilities equal to at least $1,500,000 with projected cash surplus
              to last a
              minimum of one year based on current operations. As of September 8,
              2005, 32.5%
              or $1,787,500 had been sold and a total of $357,500 in promotion fees
              has been
              paid to Geoserve Marketing.
On
              May 9,
              2005, Harry James Briers, Executive Vice President, requested and obtained
              pre-approval from the audit committee to rehire Mr. Jeremy Driver (son-in-law
              of
              Michael E. Watts, brother of the Chief Executive Officer), a past employee
              of
              Hyperdynamics Corporation, to work as General Manager for HYD Resources
              Corporation. Mr. Driver had just been honorably discharged from the
              United
              States Air Force with the rank of Lieutenant. Our Audit committee approved
              the
              request and Mr. Driver was hired by Mr. Briers at an initial salary
              of $45,000
              annually.
F-17
Note
              16 - Subsequent Events
On
              July
              12, 2005, Hyperdynamics Corporation received a letter from USOil Corporation
              whereby they claimed that the royalties and production sharing agreement
              between
              them and Guinea had been terminated. Hyperdynamics immediately went
              to work to
              rectify the situation and initially took the position that the Royalties
              and
              Production Sharing Agreement was still in full force and effect since
              the
              contract was ignored with respect to events of default, remedies, notices,
              and
              cures of such defaults. On August 26, 2005, Hyperdynamics hired Famourou
              Kourouma as its new Vice President for Guinea Affairs in August. Both
              Mr.
              Kourouma and the Company's CEO, Kent Watts traveled to Guinea. They
              have
              determined from direct meetings with the Ministre Secretaire General
              de la
              Presidence de la Republique de Guinee that the termination letter did
              not
              originate from his office. For the termination letter to be legitimate
              it would
              have had to be initiated by his office with his knowledge. The termination
              letter was a fake. The Government has represented that SCS will be
              allowed to
              resume work and the Ministre Secretaire General is working on this
              by order of
              his Excelence President Lansana Conte. Mr. Kourouma remains working
              in Guinea at
              this time.
On
              August
              12, 2005, Hyperdynamics closed a private financing transaction with
              Dutchess
              Private Equities Fund II, LP. The financing included a subscription
              for a
              $1,500,000 two (2) year debenture that was funded in the amount of
              $1,000,000
              upon closing and will fund $500,000 upon filing of a registration statement
              which is expected to be filed in October or November 2005. Upon effectiveness
              of
              the ensuing registration, Dutchess may elect to convert the payments
              coming due
              on the debenture at a stock price of the lesser of the fixed floor
              conversion
              price or $1 per share. Hyperdynamics may request another debenture
              with Dutchess
              for an additional $1,500,000 upon the effectiveness of the registration
              statement. Management believes that the registration statement will
              be effective
              within six months. However, since only the Securities and Exchange
              Commission
              can order a registration statement effective, it is not known for certain
              when
              or if the registration statement will become effective. Management
              believes that
              these financings will enable Hyperdynamics to fund its operating activities
              through June 30, 2006.
Hyperdynamics
              also executed an investment agreement with Dutchess and received a
              commitment
              from Dutchess to fund up to $20,000,000 in equity at 95% of the market
              price.
              The company and Dutchess agreed through a global amendment to limit
              the number
              of shares to register under financing to 8,400,000 shares without a
              shareholder
              vote. This insures the number of shares to be issued will not exceed
              20% of the
              outstanding common stock as is required by the rules of the American
              Stock
              Exchange. Thus, the amount ultimately raised by the financing will
              be determined
              strictly by the stock price at each point in time the equity line is
              used.
On
              August
              31, 2005, Trendsetter Production Company (wholly owned by HYD Resources
              Corporation) signed a gas facilities contract with Tennessee Gas Pipeline
              Company. On September 1, 2005, a gas sales and purchase contract was
              signed with
              British Petroleum. The company is now installing the production facilities
              and
              metering equipment to allow it to begin selling its natural gas
              reserves.
F-18
HYPERDYNAMICS
              CORPORATION
Consolidated
              Balance Sheets
(Unaudited)
March
                        31,
2006
ASSETS
Current
                        Assets
Cash
$
161,063
Restricted
                        certificate of deposit
75,000
Accounts
                        receivable, net of allowance for doubtful accounts Of $31,242
                        and
                        $20,145
49,475
Accounts
                        receivable - recovery from working interest, net of allowance
                        of doubtful
                        accounts of $201,784
-
Inventory
-
Prepaid
                        Expenses
85,681
Other
                        Current Assets
1,303
Total
                        Current Assets
372,522
Property
                        and equipment, net of accumulated depreciation of $400,313
                        and
                        $314,171
527,746
Other
                        assets
-
Oil
                        and gas properties, using full cost method of accounting
Proved
                        properties
786,084
Unproved
                        properties
4,133,609
Accumulated
                        depreciation, depletion, amortization &impairment
(117,913
)
Net
                      oil and gas properties
4,801,780
Deposits
2,680
TOTAL
                        ASSETS
$
5,704,728
LIABILITIES
                        AND STOCKHOLDERS' EQUITY
Current
                        Liabilities
Installment
                        notes payable
$
43,667
Convertible
                        notes payable, net of discount of $504,573
135,427
Accounts
                        payable and accrued expenses
896,942
Accounts
                        payable seismic data
650,000
Deferred
                        gain
983,107
Dividends
                        payable
372,398
Dividends
                        payable to related party
109,250
Total
                        Current Liabilities
3,190,791
Deferred
                        rent
-
TOTAL
                        LIABILITIES
3,190,791
Commitments
                        and contingencies
Stockholders'
                        equity
Preferred
                        stock, par value $0.001; 20,000,000 shares authorized
Series
                        A - 1,945 shares issued and outstanding
2
Series
                        B - 2,725 shares issued and outstanding
3
Common
                        stock, $.001 par value, 250,000,000 shares authorized, 45,563,620
                        and
                        42,168,410 shares issued and outstanding, respectively
45,564
Additional
                        paid-in capital
28,074,758
Accumulated
                        deficit
(25,606,390
)
Total
                        stockholders' equity
2,513,937
Total
                        Liabilities and Stockholders' Equity
$
5,704,728
FF-1
HYPERDYNAMICS
              CORPORATION
Consolidated
              Statements of Operations
(Unaudited)
Three
                        Months Ended
Nine
                        Months Ended
March
                        31,
March
                        31,
March
                        31,
March
                        31,
2006
2005
2006
2005
Revenues
$
134,234
$
28,002
$
329,052
$
148,693
Operating
                        Expenses
Cost
                        of revenues
241,778
266,027
1,515,185
693,389
Selling
-
26,748
199
64,098
General
                        and administration
816,255
777,829
2,422,264
2,575,668
Bad
                        Debt expense
201,784
-
201,784
-
(Gain)
                        loss from retirement of assets
-
(2,253
)
-
17,159
Loss
                        on working interest buy back
361,193
-
361,193
-
Depreciation,
                        depletion and amortization
158,859
24,377
231,000
80,602
Total
                        Operating Expenses
1,779,869
1,092,728
4,731,625
3,430,916
LOSS
                        FROM OPERATIONS
(1,645,635
)
(1,064,726
)
(4,402,573
)
(3,282,223
)
Other
                        Income (Expense)
Other
                        Income
1,995
-
1,995
-
Interest
                        income
-
3,679
2,438
16,461
Interest
                        expense
(1,148,944
)
(23,144
)
(1,313,837
)
(314,300
)
NET
                        LOSS
(2,792,584
)
(1,084,191
)
(5,711,977
)
(3,580,062
)
Preferred
                        dividend requirement
(27,500
)
(27,250
)
(82,000
)
(101,194
)
Net
                        loss chargeable to common shareholders
$
(2,820,084
)
$
(1,111,441
)
$
(5,793,977
)
$
(3,681,256
)
Basic
                        and diluted loss per common share
$
(0.06
)
$
(0.03
)
$
(0.14
)
$
(0.09
)
Weighted
                        average shares outstanding
43,880,008
41,839,128
42,468,964
41,498,372
FF-2
HYPERDYNAMICS
              CORPORATION
Consolidated
              Statements of Cash Flows
(Unaudited)
Nine
                        Months
Ended
                        March 31,
2006
2005
Cash
                        flows from operating activities
Net
                        loss
$
(5,711,977
)
$
(3,580,062
)
Adjustments
                        to reconcile net loss to cash used by operating activities
Depreciation
                        and amortization
231,000
80,602
Loss
                        on disposal of assets
-
17,159
Loss
                        on working interest buyback
361,193
-
Options
                        and warrants expense
651,269
1,365,123
Stock
                        issued for services
153,206
-
Loss
                        on retirement of mandatorily redeemable preferred stock
76,847
Accretion
                        of interest and amortization of offering costs of mandatorily
                        redeemable
                        preferred stock
-
231,750
Bad
                        debt expense
201,784
3,694
Amortization
                        of debt discount
1,109,764
-
Changes
                        in:
Accounts
                        receivable
(29,840
)
(33,296
)
Accounts
                        receivable - recovery from working interest
(201,784
)
-
Inventory
3,637
16,239
Other
                        current assets
80,266
100,947
Deposits
                        from customers
-
(3,264
)
Deferred
                        rent
(134,696
)
7,182
Accounts
                        payable and accrued expenses
352,744
71,482
Net
                        cash used in operating activities
(2,933,434
)
(1,645,597
)
Cash
                        flows from investing activities
Decrease
                        in restricted cash
(9,555
)
129,750
Investment
                        in unproved property
(385,347
)
(914,455
)
Purchase
                        of equipment
(62,741
)
(160,530
)
Proceeds
                        from disposal of assets
-
13,413
Change
                        in deposits
19,632
(280
)
Net
                        cash provided by (used in) investing activities
(438,011
)
(932,102
)
Cash
                        flows from financing activities
Proceeds
                        from sale of common stock and warrants
940,000
162,125
Proceeds
                        from installment notes payable
78,177
7,201
Proceeds
                        from convertible notes payable, net
1,980,872
-
Proceeds
                        from sale on working interest, net
726,000
176,000
Payments
                        on convertible notes payable
(186,717
)
-
Payments
                        on installment debt
(265,272
)
(122,119
)
Net
                        cash provided by financing activities
3,273,060
223,207
Net
                        increase (decrease) in cash
(98,385
)
(2,354,492
)
Cash
                        at beginning of period
259,448
3,149,441
Cash
                        at end of period
$
161,063
$
794,949
Supplemental
                        Information:
Cash
                        paid for interest
$
111,876
$
5,703
Cash
                        paid for income taxes
$
-
$
-
Non-cash
                        transactions
Issuance
                        of common stock for accounts payable
$
-
$
42,086
Geological
                        and geophysical work performed on unproved oil and gas properties
                        paid
                        with equity-based compensation
37,200
390,061
Series
                        B preferred shareholder quarterly dividends
82,000
-
Discount
                        related to convertible debt
1,465,245
-
Common
                        stock issued to retire mandatorily redeemable preferred stock
                        in
                        subsidiary
-
849,347
FF-3
HYPERDYNAMICS
              CORPORATION
NOTES
              TO
              CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.
Basis
                        of Presentation
The
              unaudited consolidated financial statements of Hyperdynamics Corporation
              ("Hyperdynamics") have been prepared in accordance with accounting
              principles
              generally accepted in the United States and the rules of the Securities
              and
              Exchange Commission ("SEC"), and should be read in conjunction with
              the audited
              financial statements and notes thereto contained in this registration
              statement.
              In the opinion of management, all adjustments, consisting of normal
              recurring
              adjustments, necessary for a fair presentation of financial position
              and the
              results of operations for the interim periods presented have been reflected
              herein. The results of operations for interim periods are not necessarily
              indicative of the results to be expected for the full year. Notes to
              the
              financial statements which would substantially duplicate the disclosures
              contained in the audited financial statements for the most recent fiscal
              year
              2005 as reported in this registration statement have been omitted.
2.
Convertible
                        Notes payable -
Convertible
              Note Payable
In
              August
              2005, Hyperdynamics closed a private financing convertible note payable
              with
              Dutchess Private Equities Fund II, LP (Dutchess). The proceeds from
              the
              transaction were received in two tranches. The first tranche of $1,000,000
              was
              received at closing and the second tranche of $500,000 was received
              upon the
              filing of a registration statement with the SEC. The registration statement
              was
              filed with the SEC in October 2005. Upon effectiveness of the registration
              statement, Dutchess may elect to receive loan payments in the form
              of stock at a
              conversion price based upon the prevailing market price of Hyperdynamics's
              common stock but in no event less than $1.00 per share. In conjunction
              with the
              transaction, Hyperdynamics issued a detachable warrant to Duchess to
              purchase
              500,000 shares of common stock at $1.00 per share. The relative fair
              value of
              the warrants was $304,631 and the intrinsic value of the conversion
              feature of
              the two tranches was $354,631. Effective February 9, 2006, Hyperdynamics
              has the
              option to enter into another debenture with Dutchess for an additional
              $1,500,000. During the quarter ending March 31, 2006 this note was
              converted
              into common stock.
Short
              Term Note Payable
In
              December 2005, Hyperdynamics issued 127,000 shares of stock with a
              market value
              of $240,030 and a non-interest bearing note to Dutchess in exchange
              for
              $640,000. Upon effectiveness of the aforementioned registration statement,
              Dutchess may elect to receive loan payments in the form of stock at
              a conversion
              price based upon the prevailing market price of Hyperdynamics's common
              stock.
Hyperdynamics
              analyzed its convertible notes payable instruments for derivativeaccounting
              consideration under SFAS 133 and EITF 00-19. Hyperdynamics determinedthe
              conversion feature met the criteria for classification in stockholders'equity
              under SFAS 133 and EITF 00-19. Therefore, derivative accounting is
              notapplicable
              for the convertible instruments.
The
              carrying value of the notes at
March
              31,
              2006 is as follows:
Face
                        value of notes payable
$
2,140,000
Less:  
                        discount related to warrants
(304,631
)
discount
                        related to conversion feature
(1,219,631
)
discount
                        related to financing costs
(90,075
)
conversion
                        to common shares
(1,500,000
)
Add:  
                        amortization of discount
1,109,764
Carrying
                        value of note at March 31, 2006
$
135,427
FF-4
3.
Contingencies
From
              time
              to time, Hyperdynamics is party to various legal proceedings in theordinary
              course of business or otherwise. The following is a description of
              thematerial
              legal proceedings involving Hyperdynamics commenced or pending duringthe
              three
              months ended March 31, 2006. In accordance with SFAS 5, "Accountingfor
              Contingencies," the company makes a provision for a liability when
              it isboth
              probable that a liability has been incurred and the amount of the loss
              canbe
              reasonably estimated. These provisions are reviewed at least quarterly
              andadjusted to reflect the impacts of negotiations, settlements, rulings,
              advice
              oflegal counsel, and other information and events pertaining to a particular
              case.Although Hyperdynamics believes it has adequate provisions for
              the
              followingmatters, litigation is inherently unpredictable and it is
              possible that
              cashflows or results of operations could be materially and adversely
              affected in
              anyparticular period by the unfavorable resolution or disposition of
              one or more
              ofthese contingencies.
TRENDSETTER
              INVESTORS, LLC
On
              March
              8, 2006, Trendsetter Investors, LLC ("Trendsetter") filed a lawsuitagainst
              Hyperdynamics. Trendsetter purchased from Hyperdynamics workinginterests
              in
              certain domestic properties. Trendsetter seeks unspecifiedmonetary
              damages.
              Hyperdynamics has filed a motion todismiss, and the case is currently
              stayed by
              the court pending a ruling on thesemotions to dismiss.
Hyperdynamics
              is considering counter claims against Trendsetter.
4.
Stock
                        Based Compensation
On
              January 1, 2006, Hyperdynamics adopted SFAS No. 123(R),
              "Share-BasedPayment"("SFAS 123(R)"). SFAS 123(R) replaced SFAS No.
              123 and
              supersedes APBOpinion No. 25. SFAS 123(R) requires all share-based
              payments to
              employees,including grants of employee stock options, to be recognized
              in the
              financialstatements based on their fair values. The pro forma disclosures
              previouslypermitted under SFAS 123 are no longer an alternative to
              financial
              statementrecognition. The consolidated financial statements for the
              three months
              endedMarch 31, 2006 and 2005 reflect the impact of adopting SFAS
              123(R).
FF-5
5.
Segment
                        Information
Reportable
              segments
Hyperdynamics
              has two reportable segments: SCS Corporation ("SCS") and its Louisiana
              operations ("HYDR"). SCS is engaged in oil and gas exploration activities
              offshore Guinea, West Africa. Additionally, it provides seismic data
              transcription and management services to support its activities and
              to external
              customers. The seismic data work is performed in the USA. HYDR is engaged
              in oil
              and gas exploration and production activities in Louisiana, USA; it
              also
              provides oilfield services to external customers. Hyperdynamics evaluates
              performance based on profit or loss from operations. The reportable
              segments are
              managed by separate management teams who are evaluated based on their
              segment's
              performance.
The
              following tables summarize certain balance sheet and income statement
              dataabout
              Hyperdynamics' reportable segments and corporate overhead for the threeand
              nine
              months ended March 31, 2006 and 2005:
SCS
HYDR
Corporate
Total
As
                        of March 31, 2006:
Segment
                        assets
$
4,274,928
$
1,226,819
$
202,981
$
5,704,728
Nine
                        months ended March 31, 2006
Revenues
                        from external customers
-
329,052
-
329,052
Depreciation,
                        depletion and amortization
21,739
192,217
17,044
231,000
Loss
                        from operations
(517,094
)
(1,997,523
)
(1,887,956
)
(4,402,573
)
Expenditures
                        for long-lived assets
76,106
524,971
8,249
609,326
Three
                        months ended March 31, 2006
Revenues
                        from external customers
0
134,234
-
134,234
Depreciation,
                        depletion and amortization
8,019
142,808
8,032
158,859
Loss
                        from operations
(180,965
)
(802,562
)
(662,108
)
(1,645,635
)
Expenditures
                        for long-lived assets
2,629
174,474
3,813
180,916
As
                        of March 31, 2005:
Segment
                        assets
4,074,834
1,480,284
722,152
6,277,270
Nine
                        months ended March 31, 2005
Revenues
                        from external customers
3,140
145,253
300
148,693
Depreciation,
                        depletion and amortization
21,270
45,643
13,689
80,602
Loss
                        from operations
(430,418
)
(752,018
)
(2,099,787
)
(3,282,223
)
Expenditures
                        for long-lived assets
849,502
611,981
3,564
1,465,047
Three
                        months ended March 31, 2005
Revenues
                        from external customers
-
28,002
-
28,002
Depreciation,
                        depletion and amortization
7,243
12,669
4,465
24,377
Loss
                        from operations
(112,903
)
(329,705
)
(622,118
)
(1,064,726
)
Expenditures
                        for long-lived assets
137,114
427,331
-
564,445
Product
              and services information
Quarter
                        Ended March 31,
Nine
                        Months Ended March 31,
2006
2005
2006
2005
Revenues
                        from:
Seismic
                        data management
$
-
$
-
$
-
$
3,140
Computer-related
                        sales
-
-
300
Oilfield
                        services
-
-
117,251
Oil
                        and gas production
134,234
28,002
329,052
28,002
Totals
$
134,234
$
28,002
$
329,052
$
148,693
FF-6
6.
Subsequent
                        events
During
              the forth quarter we made 5 puts on our equity line of credit for a
              total of
              $967,000. On June 23, 2006, the remaining amount available for us to
              draw down
              on the equity line of credit is $19,032,900. The equity line of credit
              expires
              in February 2009.
During
              the forth quarter we repaid the outstanding balances on our convertible
              notes
              payable. The carrying value of these notes was $135,427 on March 31,
              2006.
In
              June
              2006 we entered into a financing agreement with Cornell Capital Partners,
              LP.
              Under this agreement we will issue three 10% convertible debentures,
              with a face
              value of $2,000,000 each, for a total of $6,000,000. In June 2006 we
              issued the
              first debenture and we received net proceeds of $1,800,000. Later in June
              2006 we issued the second debenture and we received net proceeds of
              $1,820,000.
              We expect to issue the third debenture when the aforementioned Form
              S-1 is
              declared effective by the SEC. The debentures are to be repaid in monthly
              installments of $175,000 plus accrued interest. After the registration
              statement
              has been declared effective by the SEC, Cornell may elect to convert
              the monthly
              installment payments on the debentures into our common stock at a conversion
              price of $2.00 per share. In connection with the financing we issued
              warrants to
              Cornell to purchase 955,000 shares of our common stock at $2.50 per
              share,
              715,000 shares of our common stock at $3.50 per share and 430,000 shares
              of our
              common stock at $4.00 per share. The warrants expire in 2011.
FF-7
FORM
            S-1
PART
            II
INFORMATION
            NOT REQUIRED IN PROSPECTUS
ITEM
                      13.
OTHER
                      EXPENSES OF ISSUANCE AND
                      DISTRIBUTION
Our
            offering expenses are estimated to be:
Amount
                        Paid or be Paid (1)
SEC
                        registration fee
$
1,210.00
Printing
                        and engraving cost
1,000.00
Attorneys'
                        fees
25,000.00
Accounting
                        fees
10,000.00
Transfer
                        agent and registrar cost
1,000.00
Edgar
                        service provider cost
3,000.00
Miscellaneous
1,000.00
Total
$
42,210.00
(1)
            The
            amounts set forth are all estimates.
_______________
ITEM
                      14.
INDEMNIFICATION
                      OF DIRECTORS AND OFFICERS
The
            Delaware General Corporation Law Code provides for indemnification as
            follows:
§
                      145.
Indemnification
                      of officers, directors, employees and agents;
                      insurance.
(a)
            A
            corporation shall have power to indemnify any person who was or is a
            party or is
            threatened to be made a party to any threatened, pending or completed
            action,
            suit or proceeding, whether civil, criminal, administrative or investigative
            (other than an action by or in the right of the corporation) by reason
            of the
            fact that the person is or was a director, officer, employee or agent
            of the
            corporation, or is or was serving at the request of the corporation as
            a
            director, officer, employee or agent of another corporation, partnership,
            joint
            venture, trust or other enterprise, against expenses (including attorneys'
            fees), judgments, fines and amounts paid in settlement actually and reasonably
            incurred by the person in connection with such action, suit or proceeding
            if the
            person acted in good faith and in a manner the person reasonably believed
            to be
            in or not opposed to the best interests of the corporation, and, with
            respect to
            any criminal action or proceeding, had no reasonable cause to believe
            the
            person's conduct was unlawful. The termination of any action, suit or
            proceeding
            by judgment, order, settlement, conviction, or upon a plea of nolo contendere
            or
            its equivalent, shall not, of itself, create a presumption that the person
            did
            not act in good faith and in a manner which the person reasonably believed
            to be
            in or not opposed to the best interests of the corporation, and, with
            respect to
            any criminal action or proceeding, had reasonable cause to believe that
            the
            person's conduct was unlawful.
(b)
            A
            corporation shall have power to indemnify any person who was or is a
            party or is
            threatened to be made a party to any threatened, pending or completed
            action or
            suit by or in the right of the corporation to procure a judgment in its
            favor by
            reason of the fact that the person is or was a director, officer, employee
            or
            agent of the corporation, or is or was serving at the request of the
            corporation
            as a director, officer, employee or agent of another corporation, partnership,
            joint venture, trust or other enterprise against expenses (including
            attorneys'
            fees) actually and reasonably incurred by the person in connection with
            the
            defense or settlement of such action or suit if the person acted in good
            faith
            and in a manner the person reasonably believed to be in or not opposed
            to the
            best interests of the corporation and except that no indemnification
            shall be
            made in respect of any claim, issue or matter as to which such person
            shall have
            been adjudged to be liable to the corporation unless and only to the
            extent that
            the Court of Chancery or the court in which such action or suit was brought
            shall determine upon application that, despite the adjudication of liability
            but
            in view of all the circumstances of the case, such person is fairly and
            reasonably entitled to indemnity for such expenses which the Court of
            Chancery
            or such other court shall deem proper.
(c)
            To
            the extent that a present or former director or officer of a corporation
            has
            been successful on the merits or otherwise in defense of any action,
            suit or
            proceeding referred to in subsections (a) and (b) of this section, or
            in defense
            of any claim, issue or matter therein, such person shall be indemnified
            against
            expenses (including attorneys' fees) actually and reasonably incurred
            by such
            person in connection therewith.
65
(d)
            Any
            indemnification under subsections (a) and (b) of this section (unless
            ordered by
            a court) shall be made by the corporation only as authorized in the specific
            case upon a determination that indemnification of the present or former
            director, officer, employee or agent is proper in the circumstances because
            the
            person has met the applicable standard of conduct set forth in subsections
            (a)
            and (b) of this section. Such determination shall be made, with respect
            to a
            person who is a director or officer at the time of such determination,
            (1) by a
            majority vote of the directors who are not parties to such action, suit
            or
            proceeding, even though less than a quorum, or (2) by a committee of
            such
            directors designated by majority vote of such directors, even though
            less than a
            quorum, or (3) if there are no such directors, or if such directors so
            direct,
            by independent legal counsel in a written opinion, or (4) by the
            stockholders.
(e)
            Expenses (including attorneys' fees) incurred by an officer or director
            in
            defending any civil, criminal, administrative or investigative action,
            suit or
            proceeding may be paid by the corporation in advance of the final disposition
            of
            such action, suit or proceeding upon receipt of an undertaking by or
            on behalf
            of such director or officer to repay such amount if it shall ultimately
            be
            determined that such person is not entitled to be indemnified by the
            corporation
            as authorized in this section. Such expenses (including attorneys' fees)
            incurred by former directors and officers or other employees and agents
            may be
            so paid upon such terms and conditions, if any, as the corporation deems
            appropriate.
(f)
            The
            indemnification and advancement of expenses provided by, or granted pursuant
            to,
            the other subsections of this section shall not be deemed exclusive of
            any other
            rights to which those seeking indemnification or advancement of expenses
            may be
            entitled under any bylaw, agreement, vote of stockholders or disinterested
            directors or otherwise, both as to action in such person's official capacity
            and
            as to action in another capacity while holding such office.
(g)
            A
            corporation shall have power to purchase and maintain insurance on behalf
            of any
            person who is or was a director, officer, employee or agent of the corporation,
            or is or was serving at the request of the corporation as a director,
            officer,
            employee or agent of another corporation, partnership, joint venture,
            trust or
            other enterprise against any liability asserted against such person and
            incurred
            by such person in any such capacity, or arising out of such person's
            status as
            such, whether or not the corporation would have the power to indemnify
            such
            person against such liability under this section.
(h)
            For
            purposes of this section, references to "the corporation" shall include, in
            addition to the resulting corporation, any constituent corporation (including
            any constituent of a constituent) absorbed in a consolidation or merger
            which,
            if its separate existence had continued, would have had power and authority
            to
            indemnify its directors, officers, and employees or agents, so that any
            person
            who is or was a director, officer, employee or agent of such constituent
            corporation, or is or was serving at the request of such constituent
            corporation
            as a director, officer, employee or agent of another corporation, partnership,
            joint venture, trust or other enterprise, shall stand in the same position
            under
            this section with respect to the resulting or surviving corporation as
            such
            person would have with respect to such constituent corporation if its
            separate
            existence had continued.
(i)
            For
            purposes of this section, references to "other enterprises" shall include
            employee benefit plans; references to "fines" shall include any excise taxes
            assessed on a person with respect to any employee benefit plan; and references
            to "serving at the request of the corporation" shall include any service as a
            director, officer, employee or agent of the corporation which imposes
            duties on,
            or involves services by, such director, officer, employee or agent with
            respect
            to an employee benefit plan, its participants or beneficiaries; and a
            person who
            acted in good faith and in a manner such person reasonably believed to
            be in the
            interest of the participants and beneficiaries of an employee benefit
            plan shall
            be deemed to have acted in a manner "not opposed to the best interests of the
            corporation" as referred to in this section.
(j)
            The
            indemnification and advancement of expenses provided by, or granted pursuant
            to,
            this section shall, unless otherwise provided when authorized or ratified,
            continue as to a person who has ceased to be a director, officer, employee
            or
            agent and shall inure to the benefit of the heirs, executors and administrators
            of such a person.
(k)
            The
            Court of Chancery is hereby vested with exclusive jurisdiction to hear
            and
            determine all actions for advancement of expenses or indemnification
            brought
            under this section or under any bylaw, agreement, vote of stockholders
            or
            disinterested directors, or otherwise. The Court of Chancery may summarily
            determine a corporation's obligation to advance expenses (including attorneys'
            fees).
66
Our
            Bylaws provide for indemnification. Our Bylaws--ARTICLE IV, as
            follows:
1.
             INDEMNIFICATION. This corporation shall, to the maximum extent permitted
            from time to time under the law of the State of Delaware, indemnify and
            upon
            request shall advance expenses to any person who is or was a party or
            is
            threatened to be made a party to any threatened, pending or completed
            action,
            suit, proceeding or claim, whether civil, criminal, administrative or
            investigative, by reason of the fact that such person is or was or has
            agreed to
            be a director or officer of this corporation or any of its direct or
            indirect
            subsidiaries or while such a director or officer is or was serving at
            the
            request of this corporation as a director, officer, partner, trustee,
            employee
            or agent of any corporation, partnership, joint venture, trust or other
            enterprise, including service with respect to employee benefit plans,
            against
            expenses (including attorney's fees and expenses), judgments, fines,
            penalties
            and amounts paid in settlement incurred in connection with the investigation,
            preparation to defend or defense of such action, suit, proceeding or
            claim:
            provided, however, that the foregoing shall not require this corporation
            to
            indemnify or advance expenses to any person in connection with any action,
            suit,
            proceeding, claim or counterclaim initiated by or on behalf of such person.
            Such
            indemnification shall not be exclusive of other indemnification rights
            arising
            under any bylaws, agreement, vote of directors or stockholders or otherwise
            and
            shall inure to the benefit of the heirs and legal representatives of
            such
            person. Any person seeking indemnification under this Article IV shall
            be deemed
            to have met the standard of conduct required for such indemnification
            unless the
            contrary shall be established.
2.
             INSURANCE.  The corporation may purchase and maintain insurance on
            behalf of any person who is or was a director, officer, employee or agent
            of the
            corporation, or is or was serving at the request of the corporation as
            a
            director, officer, employee or agent of another corporation, partnership,
            joint
            venture, trust or other enterprise against any liability asserted against
            him
            and incurred by him in any such capacity, or arising out of his status
            as such,
            whether or not the corporation would have the power to indemnify him
            against
            such liability under the provisions of this Article IV of the
            by-laws.
3.
             DEFINITIONS.  For purposes of this Article IV, reference to the
"corporation" shall include, in addition to the resulting corporation, any
            constituent corporation (including any constituent of a constituent)
            absorbed in
            a consolidation or merger which, if its separate existence has continued,
            would
            have had power and authority to indemnify its directors, officers and
            employees
            or agents, so that any person who is or was a director, officer, employee
            or
            agent of such constituent corporation, or is or was serving at the request
            of
            such constituent corporation as a director, officer, employee or agent
            of
            another corporation, partnership, joint venture, trust or other enterprise,
            shall stand in the same position under the provisions of this Article
            IV with
            respect to the resulting or surviving corporation as he would have with
            respect
            to such constituent corporation if its separate existence had continued.
            For
            purposes of this Article IV, references to "other enterprises" shall include
            employee benefit plans; references to "fines" shall include any excise taxes
            assessed on a person with respect to any employee benefit plan; and references
            to "serving at the request of the corporation" shall include any service as a
            director, officer, employee or agent of the corporation which imposes
            duties on.
            or involves services by. such director, officer, employee, or agent with
            respect
            to an employee benefit plan, its participants, or beneficiaries; and
            a person
            who acted in good faith and in a manner he reasonably believed to be
            in the
            interest of the participants and beneficiaries of an employee benefit
            plan shall
            be deemed to have acted in a manner "not opposed to the best interests of the
            corporation" as referred to in this Article IV.
Insofar
            as indemnification for liabilities arising under the Securities Act of
            1933 may
            be permitted to directors, officers or persons controlling the registrant
            pursuant to the foregoing provisions, the registrant has been informed
            that in
            the opinion of the Securities and Exchange Commission such indemnification
            is
            against public policy as expressed in the Act and is therefore
            unenforceable.
67
ITEM
                      15.
RECENT
                      SALES OF UNREGISTERED
                      SECURITIES
During
            the 3 year period ending June 23, 2006, we issued unregistered securities
            in transactions summarized below. In January-March 2004, we sold 7,376,090,
            shares of common stock to 84 investors for an aggregate of $5,664,614.
            These
            transactions were made in reliance upon exemptions from registration
            under
            Section 4(2) of the Securities Act. Each certificate issued for unregistered
            securities contained a legend stating that the securities have not been
            registered under the Securities Act and setting forth the restrictions
            on the
            transferability and the sale of the securities. No underwriter participated
            in,
            nor did we pay any commissions or fees to any underwriter, in these
            transactions. These transaction did not involve a public offering. The
            investors
            were knowledgeable about our operations and financial condition. The
            investors
            were accredited investors as defined in Regulation D and had knowledge
            and
            experience in financial and business matters that allowed them to evaluate
            the
            merits and risk of receipt of these securities.
In
            February-April 2004, we issued 125,000 shares of common stock to one
            vendor for
            services rendered. We valued these transactions at $252,188. These transactions
            were made in reliance upon exemptions from registration under Section
            4(2) of
            the Securities Act. Each certificate issued for unregistered securities
            contained a legend stating that the securities have not been registered
            under
            the Securities Act and setting forth the restrictions on the transferability
            and
            the sale of the securities. No underwriter participated in, nor did we
            pay any
            commissions or fees to any underwriter, in these transactions. These
            transaction
            did not involve a public offering. The investors were knowledgeable about
            our
            operations and financial condition. The investors were accredited investors
            as
            defined in Regulation D and had knowledge and experience in financial
            and
            business matters that allowed them to evaluate the merits and risk of
            receipt of
            these securities.
In
            April
            2004, we issued 2,333,333 shares of common stock to employees upon cashless
            exercise of options. These transactions were made in reliance upon exemptions
            from registration under Section 4(2) of the Securities Act. Each certificate
            issued for unregistered securities contained a legend stating that the
            securities have not been registered under the Securities Act and setting
            forth
            the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were knowledgeable about our operations and financial
            condition. The investors were accredited investors as defined in Regulation
            D
            and had knowledge and experience in financial and business matters that
            allowed
            them to evaluate the merits and risk of receipt of these
            securities.
In
            April
            2004, we issued 32,328 shares of common stock to person upon the acquisition
            of
            assets. We valued these transaction at $93,750. These transactions were
            made in
            reliance upon exemptions from registration under Section 4(2) of the
            Securities
            Act. Each certificate issued for unregistered securities contained a
            legend
            stating that the securities have not been registered under the Securities
            Act
            and setting forth the restrictions on the transferability and the sale
            of the
            securities. No underwriter participated in, nor did we pay any commissions
            or
            fees to any underwriter, in these transactions. These transaction did
            not
            involve a public offering. The investors were knowledgeable about our
            operations
            and financial condition. The investors were accredited investors as defined
            in
            Regulation D and had knowledge and experience in financial and business
            matters
            that allowed them to evaluate the merits and risk of receipt of these
            securities.
In
            April-June 2004, we issued 70,822 shares of common stock to four vendors
            for
            services rendered. We valued these transactions at $182,789. These transactions
            were made in reliance upon exemptions from registration under Section
            4(2) of
            the Securities Act. Each certificate issued for unregistered securities
            contained a legend stating that the securities have not been registered
            under
            the Securities Act and setting forth the restrictions on the transferability
            and
            the sale of the securities. No underwriter participated in, nor did we
            pay any
            commissions or fees to any underwriter, in these transactions. These
            transaction
            did not involve a public offering. The investors were knowledgeable about
            our
            operations and financial condition. The investors were accredited investors
            as
            defined in Regulation D and had knowledge and experience in financial
            and
            business matters that allowed them to evaluate the merits and risk of
            receipt of
            these securities.
In
            April-June 2004, we issued 55,000 shares of common stock to two investors
            who
            exercised warrants for $15,000. These transactions were made in reliance
            upon
            exemptions from registration under Section 4(2) of the Securities Act.
            Each
            certificate issued for unregistered securities contained a legend stating
            that
            the securities have not been registered under the Securities Act and
            setting
            forth the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were knowledgeable about our operations and financial
            condition. The investors were accredited investors as defined in Regulation
            D
            and had knowledge and experience in financial and business matters that
            allowed
            them to evaluate the merits and risk of receipt of these
            securities.
In
            August-September 2004, we sold 22,50 shares of common stock to two investors
            for
            an aggregate of $8,125. These transactions were made in reliance upon
            exemptions
            from registration under Section 4(2) of the Securities Act. Each certificate
            issued for unregistered securities contained a legend stating that the
            securities have not been registered under the Securities Act and setting
            forth
            the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were knowledgeable about our operations and financial
            condition. The investors were accredited investors as defined in Regulation
            D
            and had knowledge and experience in financial and business matters that
            allowed
            them to evaluate the merits and risk of receipt of these
            securities.
In
            September 2004, we issued 46,250 shares of common stock to two vendors
            for
            services rendered. We valued these transaction at $99,750. These transactions
            were made in reliance upon exemptions from registration under Section
            4(2) of
            the Securities Act. Each certificate issued for unregistered securities
            contained a legend stating that the securities have not been registered
            under
            the Securities Act and setting forth the restrictions on the transferability
            and
            the sale of the securities. No underwriter participated in, nor did we
            pay any
            commissions or fees to any underwriter, in these transactions. These
            transaction
            did not involve a public offering. The investors were knowledgeable about
            our
            operations and financial condition. The investors were accredited investors
            as
            defined in Regulation D and had knowledge and experience in financial
            and
            business matters that allowed them to evaluate the merits and risk of
            receipt of
            these securities.
In
            December 2004, we issue 33,250 shares of common stock to two vendors
            for
            services rendered. We valued these transactions at $136,238. These transactions
            were made in reliance upon exemptions from registration under Section
            4(2) of
            the Securities Act. Each certificate issued for unregistered securities
            contained a legend stating that the securities have not been registered
            under
            the Securities Act and setting forth the restrictions on the transferability
            and
            the sale of the securities. No underwriter participated in, nor did we pay any
            commissions or fees to any underwriter, in these transactions. The investors
            were knowledgeable about our operations and financial condition. The
            investors
            were accredited investors as defined in Regulation D and had knowledge
            and
            experience in financial and business matters that allowed them to evaluate
            the
            merits and risk of receipt of these securities.
68
In
            October-November 2004, we sold 260,000 shares of common stock to two
            investors
            for an aggregate of $140,000. These transactions were made in reliance
            upon
            exemptions from registration under Section 4(2) of the Securities Act.
            Each
            certificate issued for unregistered securities contained a legend stating
            that
            the securities have not been registered under the Securities Act and
            setting
            forth the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were knowledgeable about our operations and financial
            condition. The investors were accredited investors as defined in Regulation
            D
            and had knowledge and experience in financial and business matters that
            allowed
            them to evaluate the merits and risk of receipt of these
            securities.
In
            March
            2005, we issued 101,480 shares of common stock to acquire assets from
            two
            persons. We valued these transactions at $281,250. These transactions
            were made
            in reliance upon exemptions from registration under Section 4(2) of the
            Securities Act. Each certificate issued for unregistered securities contained
            a
            legend stating that the securities have not been registered under the
            Securities
            Act and setting forth the restrictions on the transferability and the
            sale of
            the securities. No underwriter participated in, nor did we pay any commissions
            or fees to any underwriter, in these transactions. These transaction
            did not
            involve a public offering. The investors were knowledgeable about our
            operations
            and financial condition. The investors were accredited investors as defined
            in
            Regulation D and had knowledge and experience in financial and business
            matters
            that allowed them to evaluate the merits and risk of receipt of these
            securities.
In
            March
            2005, we sold 28,000 shares of common stock to two investors for an aggregate
            of
            $14,000. These transactions were made in reliance upon exemptions from
            registration under Section 4(2) of the Securities Act. Each certificate
            issued
            for unregistered securities contained a legend stating that the securities
            have
            not been registered under the Securities Act and setting forth the restrictions
            on the transferability and the sale of the securities. No underwriter
            participated in, nor did we pay any commissions or fees to any underwriter,
            in
            these transactions. These transaction did not involve a public offering.
            The
            investors were knowledgeable about our operations and financial condition.
            The
            investors were accredited investors as defined in Regulation D and had
            knowledge
            and experience in financial and business matters that allowed them to
            evaluate
            the merits and risk of receipt of these securities.
In
            January-March 2005, we issued 81,616 shares of common stock to 15 employees
            and
            vendors for services rendered. We valued these transactions at $191,044.
            These
            transactions were made in reliance upon exemptions from registration
            under
            Section 4(2) of the Securities Act. Each certificate issued for unregistered
            securities contained a legend stating that the securities have not been
            registered under the Securities Act and setting forth the restrictions
            on the
            transferability and the sale of the securities. No underwriter participated
            in,
            nor did we pay any commissions or fees to any underwriter, in these
            transactions. The investors were knowledgeable about our operations and
            financial condition. The investors were accredited investors as defined
            in
            Regulation D and had knowledge and experience in financial and business
            matters
            that allowed them to evaluate the merits and risk of receipt of these
            securities.
In
            May
            2005, we issued 87,715 shares of common stock to one investor as a dividends
            on
            preferred stock. These transactions were made in reliance upon exemptions
            from
            registration under Section 4(2) of the Securities Act. Each certificate
            issued
            for unregistered securities contained a legend stating that the securities
            have
            not been registered under the Securities Act and setting forth the restrictions
            on the transferability and the sale of the securities. No underwriter
            participated in, nor did we pay any commissions or fees to any underwriter,
            in
            these transactions. These transaction did not involve a public offering.
            The
            investors were knowledgeable about our operations and financial condition.
            The
            investors were accredited investors as defined in Regulation D and had
            knowledge
            and experience in financial and business matters that allowed them to
            evaluate
            the merits and risk of receipt of these securities.
In
            May
            2005, we issued 10,012 shares of common stock to one vendor for services
            rendered. We valued these transactions at $21,126. These transactions
            were made
            in reliance upon exemptions from registration under Section 4(2) of the
            Securities Act. Each certificate issued for unregistered securities contained
            a
            legend stating that the securities have not been registered under the
            Securities
            Act and setting forth the restrictions on the transferability and the
            sale of
            the securities. No underwriter participated in, nor did we pay any commissions
            or fees to any underwriter, in these transactions. These transaction
            did not
            involve a public offering. The investors were knowledgeable about our
            operations
            and financial condition. The investors were accredited investors as defined
            in
            Regulation D and had knowledge and experience in financial and business
            matters
            that allowed them to evaluate the merits and risk of receipt of these
            securities.
In
            June
            2005, we sold 11,000 shares of common stock to one investor for $5,500.
            These
            transactions were made in reliance upon exemptions from registration
            under
            Section 4(2) of the Securities Act. Each certificate issued for unregistered
            securities contained a legend stating that the securities have not been
            registered under the Securities Act and setting forth the restrictions
            on the
            transferability and the sale of the securities. No underwriter participated
            in,
            nor did we pay any commissions or fees to any underwriter, in these
            transactions. The investors were knowledgeable about our operations and
            financial condition. The investors were accredited investors as defined
            in
            Regulation D and had knowledge and experience in financial and business
            matters
            that allowed them to evaluate the merits and risk of receipt of these
            securities.
During
            August 2005, we sold a convertible denture and a warrant to on investor
            who paid
            us the gross amount of $1 million when we signed the agreements and Dutchess
            paid us an additional $500,000 a short time later. The warrant has been
            exercised and the debenture has been converted. These transactions were
            made in
            reliance upon exemptions from registration under Section 4(2) of the
            Securities
            Act. Each certificate issued for unregistered securities contained a
            legend
            stating that the securities have not been registered under the Securities
            Act
            and setting forth the restrictions on the transferability and the sale
            of the
            securities. No underwriter participated in, nor did we pay any commissions
            or
            fees to any underwriter, in these transactions. These transaction did
            not
            involve a public offering. The investors were knowledgeable about our
            operations
            and financial condition. The investors were accredited investors as defined
            in
            Regulation D and had knowledge and experience in financial and business
            matters
            that allowed them to evaluate the merits and risk of receipt of these
            securities.
In
            June
            2003, we issued an aggregate of 150,000 options to one vendor for services
            rendered. These options had an exercise price of $0.50 per share with
            an expiration of June 2005. These transactions were made in reliance upon
            exemptions from registration under Section 4(2) of the Securities Act.
            Each
            certificate issued for unregistered securities contained a legend stating
            that
            the securities have not been registered under the Securities Act and
            setting
            forth the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were knowledgeable about our operations and financial
            condition. The investors were accredited investors as defined in Regulation
            D
            and had knowledge and experience in financial and business matters that
            allowed
            them to evaluate the merits and risk of receipt of these
            securities.
69
In
            July-December 2003, we issued an aggregate of 197,500 options to one
            vendor for
            services rendered. These options had an exercise price of $0.25 per share
            with a
            pro rata expiration of December 2008. These transactions were made in
            reliance
            upon exemptions from registration under Section 4(2) of the Securities
            Act. Each
            certificate issued for unregistered securities contained a legend stating
            that
            the securities have not been registered under the Securities Act and
            setting
            forth the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were knowledgeable about our operations and financial
            condition. The investors were accredited investors as defined in Regulation
            D
            and had knowledge and experience in financial and business matters that
            allowed
            them to evaluate the merits and risk of receipt of these
            securities.
In
            December 2003, we issued an aggregate of 2,000,000 options to five vendors
            for
            services rendered. These options had an exercise price of $0.50 per share
            with
            an expiration of June 2007. These transactions were made in reliance
            upon
            exemptions from registration under Section 4(2) of the Securities Act.
            Each
            certificate issued for unregistered securities contained a legend stating
            that
            the securities have not been registered under the Securities Act and
            setting
            forth the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were knowledgeable about our operations and financial
            condition. The investors were accredited investors as defined in Regulation
            D
            and had knowledge and experience in financial and business matters that
            allowed
            them to evaluate the merits and risk of receipt of these
            securities.
In
            October 2003- March 2004, we issued an aggregate of 3,534,903 to 102
            investors concurrent with purchase of common stock. These options had an
            exercise price of $2.00 per share with a expirations of October 2006-March
            2007.
            These transactions were made in reliance upon exemptions from registration
            under
            Section 4(2) of the Securities Act. Each certificate issued for unregistered
            securities contained a legend stating that the securities have not been
            registered under the Securities Act and setting forth the restrictions
            on the
            transferability and the sale of the securities. No underwriter participated
            in,
            nor did we pay any commissions or fees to any underwriter, in these
            transactions. These transaction did not involve a public offering. The
            investors
            were knowledgeable about our operations and financial condition. The
            investors
            were accredited investors as defined in Regulation D and had knowledge
            and
            experience in financial and business matters that allowed them to evaluate
            the
            merits and risk of receipt of these securities.
In
            August
            2005 we issued to one investor a convertible debenture that was convertible
            into
            1,500,000 shares, and a warrant to purchase 500,000 shares with an exercise
            price Of $1.00 per share. We received the aggregate amount of $1,500,000
            for
            these securities.
In
            December 2005 we issued to the same investor an option to purchase 127,000
            shares at an exercise price of $1.89 per share as partial consideration
            for a
            loan.
These
            transactions were made in reliance upon exemptions from registration
            under
            Section 4(2) of the Securities Act. Each certificate issued for unregistered
            securities contained a legend stating that the securities have not been
            registered under the Securities Act and setting forth the restrictions
            on the
            transferability and the sale of the securities. No underwriter participated
            in,
            nor did we pay any commissions or fees to any underwriter, in these
            transactions. These transaction did not involve a public offering. The
            investors
            were knowledgeable about our operations and financial condition. The
            investors
            were accredited investors as defined in Regulation D and had knowledge
            and
            experience in financial and business matters that allowed them to evaluate
            the
            merits and risk of receipt of these securities.
In
            November 2005, we issued 30,000 shares of common stock to one vendor
            for
            services rendered. We valued this transaction at $52,200. These transactions
            were made in reliance upon exemptions from registration under Section
            4(2) of
            the Securities Act. Each certificate issued for unregistered securities
            contained a legend stating that the securities have not been registered
            under
            the Securities Act and setting forth the restrictions on the transferability
            and
            the sale of the securities. No underwriter participated in, nor did we
            pay any
            commissions or fees to any underwriter, in these transactions. These
            transaction
            did not involve a public offering. The investors were knowledgeable about
            our
            operations and financial condition. The investors were accredited investors
            as
            defined in Regulation D and had knowledge and experience in financial
            and
            business matters that allowed them to evaluate the merits and risk of
            receipt of
            these securities.
In
            November 2005, we issued 25,000 shares of common stock to one investor
            who
            exercised warrants for $12,500. These transactions were made in reliance
            upon
            exemptions from registration under Section 4(2) of the Securities Act.
            Each
            certificate issued for unregistered securities contained a legend stating
            that
            the securities have not been registered under the Securities Act and
            setting
            forth the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were knowledgeable about our operations and financial
            condition. The investors were accredited investors as defined in Regulation
            D
            and had knowledge and experience in financial and business matters that
            allowed
            them to evaluate the merits and risk of receipt of these
            securities.
In
            December 2005, we issued 127,000 shares of common stock to a lender in
            partial
            consideration of a loan to us of $500,000. These transactions were made
            in
            reliance upon exemptions from registration under Section 4(2) of the
            Securities
            Act. Each certificate issued for unregistered securities contained a
            legend
            stating that the securities have not been registered under the Securities
            Act
            and setting forth the restrictions on the transferability and the sale
            of the
            securities. No underwriter participated in, nor did we pay any commissions
            or
            fees to any underwriter, in these transactions. These transaction did
            not
            involve a public offering. The investors were knowledgeable about our
            operations
            and financial condition. The investors were accredited investors as defined
            in
            Regulation D and had knowledge and experience in financial and business
            matters
            that allowed them to evaluate the merits and risk of receipt of these
            securities.
70
In
            November 2005, we issued 24,351 shares of common stock to our directors
            as
            compensation. These transactions were made in reliance upon exemptions
            from
            registration under Section 4(2) of the Securities Act. Each certificate
            issued
            for unregistered securities contained a legend stating that the securities
            have
            not been registered under the Securities Act and setting forth the restrictions
            on the transferability and the sale of the securities. No underwriter
            participated in, nor did we pay any commissions or fees to any underwriter,
            in
            these transactions. These transaction did not involve a public offering.
            The
            investors were knowledgeable about our operations and financial condition.
            The
            investors had knowledge and experience in financial and business matters
            that
            allowed them to evaluate the merits and risk of receipt of these
            securities.
In
            January 2006, an investor exercised 25,000 options. The exercise price
            was
            $12,500. These transactions were made in reliance upon exemptions from
            registration under Section 4(2) of the Securities Act. Each certificate
            issued
            for unregistered securities contained a legend stating that the securities
            have
            not been registered under the Securities Act and setting forth the restrictions
            on the transferability and the sale of the securities. No underwriter
            participated in, nor did we pay any commissions or fees to any underwriter,
            in
            these transactions. These transaction did not involve a public offering.
            The
            investors were accredited investors as defined in Regulation D and had
            knowledge
            and experience in financial and business matters that allowed them to
            evaluate
            the merits and risk of receipt of these securities. The investors were
            knowledgeable about our operations and financial condition.
In
            November 2005, we issued 40,000 options to Seacon Computer Systems Inc.
            These
            options have an exercise price of $0.01 per share and expire in one year.
            These
            transactions were made in reliance upon exemptions from registration
            under
            Section 4(2) of the Securities Act. Each certificate issued for unregistered
            securities contained a legend stating that the securities have not been
            registered under the Securities Act and setting forth the restrictions
            on the
            transferability and the sale of the securities. No underwriter participated
            in,
            nor did we pay any commissions or fees to any underwriter, in these
            transactions. These transaction did not involve a public offering. The
            investors
            had knowledge and experience in financial and business matters that allowed
            them
            to evaluate the merits and risk of receipt of these securities. The investors
            were knowledgeable about our operations and financial condition.
In
            December 2005, we issued 10,000 options to one employee as compensation.
            These
            options have an exercise price of $1.55 per share and expire in two years.
            These
            transactions were made in reliance upon exemptions from registration
            under
            Section 4(2) of the Securities Act. Each certificate issued for unregistered
            securities contained a legend stating that the securities have not been
            registered under the Securities Act and setting forth the restrictions
            on the
            transferability and the sale of the securities. No underwriter participated
            in,
            nor did we pay any commissions or fees to any underwriter, in these
            transactions. These transaction did not involve a public offering. The
            investors
            had knowledge and experience in financial and business matters that allowed
            them
            to evaluate the merits and risk of receipt of these securities. The investors
            were knowledgeable about our operations and financial condition.
In
            December 2005, we issued 500,000 options to two employees as compensation.
            These
            options have an exercise prices from $1.00 per share to $1.55 per share
            and
            expire in two years. These transactions were made in reliance upon exemptions
            from registration under Section 4(2) of the Securities Act. Each certificate
            issued for unregistered securities contained a legend stating that the
            securities have not been registered under the Securities Act and setting
            forth
            the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors had knowledge and experience in financial and
            business
            matters that allowed them to evaluate the merits and risk of receipt
            of these
            securities. The investors were knowledgeable about our operations and
            financial
            condition.
In
            February March and April 2006, one investor exercised warrants with an
            exercise
            price of $0.50 per share to acquire 1,030,000 shares of common stock
            for an
            aggregate exercise price of $515,000.
We
            issued
            these shares to the investor. These transactions were made in reliance
            upon
            exemptions from registration under Section 4(2) of the Securities Act.
            Each
            certificate issued for unregistered securities contained a legend stating
            that
            the securities have not been registered under the Securities Act and
            setting
            forth the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were accredited investors as defined in Regulation
            D and
            had knowledge and experience in financial and business matters that allowed
            them
            to evaluate the merits and risk of receipt of these securities. The investors
            were knowledgeable about our operations and financial
            condition.
71
In
            February 2006, one investor exercised warrants with an exercise price
            of $0.50
            per share to acquire 20,000 shares of common stock for an aggregate exercise
            price of $10,000.
We
            issued
            these shares to the investor. These transactions were made in reliance
            upon
            exemptions from registration under Section 4(2) of the Securities Act.
            Each
            certificate issued for unregistered securities contained a legend stating
            that
            the securities have not been registered under the Securities Act and
            setting
            forth the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investors were accredited investors as defined in Regulation
            D and
            had knowledge and experience in financial and business matters that allowed
            them
            to evaluate the merits and risk of receipt of these securities. The investors
            were knowledgeable about our operations and financial condition.
In
            March
            2006, one investor exercised options to purchase 25,000 shares and we
            received
            $12,500 as consideration. These transactions were made in reliance upon
            exemptions from registration under Section 4(2) of the Securities Act.
            Each
            certificate issued for unregistered securities contained a legend stating
            that
            the securities have not been registered under the Securities Act and
            setting
            forth the restrictions on the transferability and the sale of the securities.
            No
            underwriter participated in, nor did we pay any commissions or fees to
            any
            underwriter, in these transactions. These transaction did not involve
            a public
            offering. The investor was an accredited investors as defined in Regulation
            D
            and had knowledge and experience in financial and business matters that
            allowed
            them to evaluate the merits and risk of receipt of these securities.
            The
            investor were knowledgeable about our operations and financial
            condition.
In
            December 2005 through June 2006, we issued 30,000 shares to one vendor
            as
            compensation for services rendered that we valued at approximately
            $125,000.
In
            February 2006, we issued an aggregate of 197,146 shares to buy back oil
            and gas
            working interests from owners. We valued these transactions at $2.39
            per share.
            These transactions were made in reliance upon exemptions from registration
            under
            Section 4(2) of the Securities Act. Each certificate issued for unregistered
            securities contained a legend stating that the securities have not been
            registered under the Securities Act and setting forth the restrictions
            on the
            transferability and the sale of the securities. No underwriter participated
            in,
            nor did we pay any commissions or fees to any underwriter, in these
            transactions. These transaction did not involve a public offering. The
            investors
            were accredited investors as defined in Regulation D and had knowledge
            and
            experience in financial and business matters that allowed them to evaluate
            the
            merits and risk of receipt of these securities. The investors were knowledgeable
            about our operations and financial condition.
In
            February 2006, we issued 300,000 shares of restricted common stock to
            investors
            upon the exercise of options. We received an aggregate of $150,000 in
            exercise
            proceeds.
These
            transactions were made in reliance upon exemptions from registration
            under
            Section 4(2) of the Securities Act. Each certificate issued for unregistered
            securities contained a legend stating that the securities have not been
            registered under the Securities Act and setting forth the restrictions
            on the
            transferability and the sale of the securities. No underwriter participated
            in,
            nor did we pay any commissions or fees to any underwriter, in these
            transactions. These transaction did not involve a public offering. The
            investors
            were accredited investors as defined in Regulation D and had knowledge
            and
            experience in financial and business matters that allowed them to evaluate
            the
            merits and risk of receipt of these securities. The investors were knowledgeable
            about our operations and financial condition.
In
            June
            2006, one investor exercised options to purchase 25,000 shares of stock
            and paid
            us $12,500. These transactions were made in reliance upon exemptions
            from
            registration under Section 4(2) of the Securities Act. Each certificate
            issued
            for unregistered securities contained a legend stating that the securities
            have
            not been registered under the Securities Act and setting forth the restrictions
            on the transferability and the sale of the securities. No underwriter
            participated in, nor did we pay any commissions or fees to any underwriter,
            in
            these transactions. These transaction did not involve a public offering.
            The
            investor was an accredited investors as defined in Regulation D and had
            knowledge and experience in financial and business matters that allowed
            them to
            evaluate the merits and risk of receipt of these securities. The investor
            were
            knowledgeable about our operations and financial condition.
72
In
June
            2006, we entered into a financing arrangement with
Cornell
            Capital Partners, LP
whereby
            we received net amount of $1,800,000 by selling a convertible debenture
            to
            Cornell. The debenture has a fixed conversion price of $2.00 per share
            and
            matures in 2009. In connection with the Cornell transaction, we issued
            a total
            of 3 warrants expiring in 2011 Cornell as follows:
(a)
one
                      warrant to purchase 955,000 shares of common stock at an exercise
                      price of $2.50 per share
(b)
one
                      warrant to purchase 715,000 shares of common stock at an exercise
                      price of $3.50 per share
(c)
one
                      warrant to purchase 430,000 shares of common stock at an exercise
                      price of $4.00 per share.
73
ITEM
                      16.
EXHIBITS
                      AND FINANCIAL STATEMENT SCHEDULES
(A)
Exhibit
Number
Description
3.1
Articles
                      of Incorporation as amended -- Incorporated by reference to
                      our Form
                      10-KSB/A filed May 16, 2005.
3.2
By-laws
                      as amended -- Incorporated by reference to our Form 10-KSB/A
                      filed May 16,
                      2005.
4.1.1
First
                      Convertible Debenture—-Incorporated by reference to our Form 8-K filed
                      June 23, 2006.
4.1.2
Second
                      Convertible Debenture—-
Provided
                      herewith.
4.2
First
                      Warrant—-Incorporated by reference to our Form 8-K filed June 23,
                      2006.
4.3
Second
                      Warrant—-Incorporated by reference to our Form 8-K filed June 23,
                      2006.
4.4
Third
                      Warrant—-Incorporated by reference to our Form 8-K filed June 23,
                      2006.
4.5
Registration
                      Rights Agreement—-Incorporated by reference to our Form 8-K filed June 23,
                      2006.
4.6
Form
                      of Common Stock Certificate --  Incorporated by reference to our Form
                      S-1 filed January 12, 2006 as amended.
4.7
Form
                      of Series A Preferred Stock Certificate -- Incorporated by
                      reference to
                      our Form SB-2 filed February 5, 2000.
4.8
Form
                      of Series B Preferred Stock Certificate -- Incorporated by
                      reference to
                      our Form 8-K filed June 15, 2001.
5.1
Opinion
                      re: legality --
provided
                      herewith.
10.1
Securities
                      Purchase Agreement—-Incorporated by reference to our Form 8-K filed June
                      23, 2006.
10.2
Amendment
                      to the Securities Purchase Agreement—-Incorporated by reference to our
                      Form 8-K filed June 23, 2006.
10.3
Parent
                      Security Agreement—-Incorporated by reference to our Form 8-K filed June
                      23, 2006.
10.4
Subsidiary
                      Security Agreement—-Incorporated by reference to our Form 8-K filed June
                      23, 2006.
10.5
Irrevocable
                      Transfer Agent Instructions—-Incorporated by reference to our Form 8-K
                      filed June 23, 2006.
10.6
Investment
                      Agreement for equity line of credit--
Incorporated
                      by reference to our Form S-1 filed January 12, 2006 as
                      amended.
10.7
Employment
                      Agreement of Famourou Kourouma --
Incorporated
                      by reference to our Form S-1 filed January 12, 2006 as
                      amended.
10.8
Employment
                      Agreement of Kent Watts -- Incorporated by reference to our
                      Form SB-2
                      filed February 25, 2000.
10.9
Production
                      Sharing Agreement (PSA) -- Incorporated by reference to our
                      Form 8-K filed
                      July 28, 2005.
10.10
Farmout
                      Agreement -- Incorporated by reference to our Form 8-K filed
                      December 20,
                      2002.
10.11
CFO
                      Agreement --
Incorporated
                      by reference to our Form S-1 filed January 12, 2006 as
                      amended.
21.1
Subsidiaries
                      - Provided herewith.
74
23.1
Consent
                      of Independent Registered Public Accounting Firm--
provided
                      herewith.
23.2
Consent
                      of Counsel (see Exhibit 5.1).
99.1
Map
                      of Guinea lease --
Incorporated
                      by reference to our Form S-1 filed January 12, 2006 as
                      amended.
99.2
Map
                      of Louisiana leases -- Incorporated by reference to our Form S-1
                      filed January 12, 2006 as amended.
99.3
Letter
                      from government of Guinea in original French language --
Incorporated
                      by reference to our Form S-1 filed January 12, 2006 as
                      amended.
99.4
Letter
                      from government of Guinea translated into English --
Incorporated
                      by reference to our Form S-1 filed January 12, 2006 as
                      amended.
(B)
FINANCIAL
            STATEMENT SCHEDULES
The
            financial statement schedules required by this item are set forth in
            the notes
            to our financial statements set forth on page 58 and F-1.
ITEM
                      17.
UNDERTAKINGS
The
            undersigned registrant hereby undertakes:
1.
To
                      file, during any period in which offers or sales are being
                      made, a
                      post-effective amendment to this registration
                      statement:
i.
To
                      include any prospectus required by section 10(a)(3) of the
                      Securities Act
                      of 1933;
ii.
To
                      reflect in the prospectus any facts or events arising after
                      the effective
                      date of the registration statement (or the most recent post-effective
                      amendment thereof) which, individually or in the aggregate,
                      represent a
                      fundamental change in the information set forth in the registration
                      statement. Notwithstanding the foregoing, any increase or decrease
                      in
                      volume of securities offered (if the total dollar value of
                      securities
                      offered would not exceed that which was registered) and any
                      deviation from
                      the low or high end of the estimated maximum offering range
                      may be
                      reflected in the form of prospectus filed with the Commission
                      pursuant to
                      Rule 424(b) if, in the aggregate, the changes in volume and
                      price
                      represent no more than 20% change in the maximum aggregate
                      offering price
                      set forth in the "Calculation of Registration Fee" table in
                      the effective
                      registration statement.
iii.
To
                      include any material information with respect to the plan of
                      distribution
                      not previously disclosed in the registration statement or any
                      material
                      change to such information in the registration
                      statement;
2.
That,
                      for the purpose of determining any liability under the Securities
                      Act of
                      1933, each such post-effective amendment shall be deemed to
                      be a new
                      registration statement relating to the securities offered therein,
                      and the
                      offering of such securities at that time shall be deemed to
                      be the initial
                      bona fide offering thereof.
3.
To
                      remove from registration by means of a post-effective amendment
                      any of the
                      securities being registered which remain unsold at the termination
                      of the
                      offering.
75
4.
That,
                      for the purpose of determining any liability under the Securities
                      Act of
                      1933, each such post-effective amendment shall be deemed to
                      be a new
                      registration statement relating to the securities offered therein,
                      and the
                      offering of such securities at that time shall be deemed to
                      be the initial
                      bona fide offering thereof.
i.
If
                      the registrant is relying on Rule 430B (?230.430B of this
                      chapter):
A.
            Each
            prospectus filed by the registrant pursuant to Rule 424(b)(3)shall be
            deemed to
            be part of the registration statement as of the date the filed prospectus
            was
            deemed part of and included in the registration statement; and
B.
            Each
            prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or
            (b)(7) as
            part of a registration statement in reliance on Rule 430B relating to
            an
            offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose
            of
            providing the information required by section 10(a) of the Securities
            Act of
            1933 shall be deemed to be part of and included in the registration statement
            as
            of the earlier of the date such form of prospectus is first used after
            effectiveness or the date of the first contract of sale of securities
            in the
            offering described in the prospectus. As provided in Rule 430B, for liability
            purposes of the issuer and any person that is at that date an underwriter,
            such
            date shall be deemed to be a new effective date of the registration statement
            relating to the securities in the registration statement to which that
            prospectus relates, and the offering of such securities at that time
            shall be
            deemed to be the initial bona fide offering thereof. Provided, however,
            that no
            statement made in a registration statement or prospectus that is part
            of the
            registration statement or made in a document incorporated or deemed incorporated
            by reference into the registration statement or prospectus that is part
            of the
            registration statement will, as to a purchaser with a time of contract
            of sale
            prior to such effective date, supersede or modify any statement that
            was made in
            the registration statement or prospectus that was part of the registration
            statement or made in any such document immediately prior to such effective
            date;
            or
ii.
If
                      the registrant is subject to Rule 430C, each prospectus filed
                      pursuant to
                      Rule 424(b) as part of a registration statement relating to
                      an offering,
                      other than registration statements relying on Rule 430B or
                      other than
                      prospectuses filed in reliance on Rule 430A, shall be deemed
                      to be part of
                      and included in the registration statement as of the date it
                      is first used
                      after effectiveness. Provided, however, that no statement made
                      in a
                      registration statement or prospectus that is part of the registration
                      statement or made in a document incorporated or deemed incorporated
                      by
                      reference into the registration statement or prospectus that
                      is part of
                      the registration statement will, as to a purchaser with a time
                      of contract
                      of sale prior to such first use, supersede or modify any statement
                      that
                      was made in the registration statement or prospectus that was
                      part of the
                      registration statement or made in any such document immediately
                      prior to
                      such date of first use.
5.
That,
                      for the purpose of determining liability of the registrant
                      under the
                      Securities Act of 1933 to any purchaser in the initial distribution
                      of the
                      securities:
76
The
            undersigned registrant undertakes that in a primary offering of securities
            of
            the undersigned registrant pursuant to this registration statement, regardless
            of the underwriting method used to sell the securities to the purchaser,
            if the
            securities are offered or sold to such purchaser by means of any of the
            following communications, the undersigned registrant will be a seller
            to the
            purchaser and will be considered to offer or sell such securities to
            such
            purchaser:
i.
Any
            preliminary prospectus or prospectus of the undersigned registrant relating
            to
            the offering required to be filed pursuant to Rule 424;
ii.
Any
            free
            writing prospectus relating to the offering prepared by or on behalf
            of the
            undersigned registrant or used or referred to by the undersigned
            registrant;
iii.
The
            portion of any other free writing prospectus relating to the offering
            containing
            material information about the undersigned registrant or its securities
            provided
            by or on behalf of the undersigned registrant; and
iv.
Any
            other
            communication that is an offer in the offering made by the undersigned
            registrant to the purchaser.
The
            undersigned registrant hereby undertakes that:
1.
For
                        purposes of determining any liability under the Securities
                        Act of 1933,
                        the information omitted from the form of prospectus filed
                        as part of this
                        registration statement in reliance upon Rule 430A and contained
                        in a form
                        of prospectus filed by the registrant pursuant to Rule 424(b)
                        (1) or (4)
                        or 497(h) under the Securities Act shall be deemed to be
                        part of this
                        registration statement as of the time it was declared
                        effective.
2.
For
                      the purpose of determining any liability under the Securities
                      Act of 1933,
                      each post-effective amendment that contains a form of prospectus
                      shall be
                      deemed to be a new registration statement relating to the securities
                      offered therein, and the offering of such securities at that
                      time shall be
                      deemed to be the initial bona fide offering
                      thereof.
The
            undersigned registrant hereby undertakes to supplement the prospectus,
            after the
            expiration of the subscription period, to set forth the results of the
            subscription offer, the transactions by any underwriters during the subscription
            period, the amount of unsubscribed securities to be purchased by the
            underwriters, and the terms of any subsequent reoffering thereof. If
            any public
            offering by an underwriter is to be made on terms differing from those
            set forth
            on the cover page of the prospectus, a post-effective amendment will
            be filed to
            set forth the terms of such offering.
Insofar
            as indemnification for liabilities arising under the Securities Act of
            1933 may
            be permitted to directors, officers and controlling persons of the registrant
            pursuant to the foregoing provisions, or otherwise, the registrant has
            been
            advised that in the opinion of the Securities and Exchange Commission
            such
            indemnification is against public policy as expressed in the Act and
            is,
            therefore, unenforceable. In the event that a claim for indemnification
            against
            such liabilities (other than the payment by the registrant of expenses
            incurred
            or paid by a director, officer or controlling person of the registrant
            in the
            successful defense of any action, suit or proceeding) is asserted by
            such
            director, officer or controlling person in connection with the securities
            being
            registered, the registrant will, unless in the opinion of its counsel
            the matter
            has been settled by controlling precedent, submit to a court of appropriate
            jurisdiction the question whether such indemnification by it is against
            public
            policy as expressed in the Act and will be governed by the final adjudication
            of
            such issue.
77
SIGNATURES
Pursuant
            to the requirements of the Securities Act of 1933, the registrant has
            duly
            caused this registration statement on Form S-1 to be signed on its behalf
            by the
            undersigned, thereunto duly authorized in the City of Sugar Land, State
            of
            Texas, on June 30, 2006.
HYPERDYNAMICS
                      CORPORATION
June
                      30,
2006
By:
                      /s/ Kent Watts
Kent
                      Watts
Chairman
                      of the Board,
Director,
Chief
                      Executive Officer
Pursuant
            to the requirements of the Securities Act of 1933, this registration
            statement
            has been signed by the following persons in the capacities and on the
            dates
            indicated.
/s/
                      Kent Watts
Chairman
                      of the Board,
Kent
                      Watts
Director,
                      President Chief Executive Officer
June
                      30, 2006
/s/
                      Harold A. Poling
Director
June
                      30, 2006
Harold
                      A. Poling
/s/
                      Harry J. Briers
Director
                      and Executive Vice-president
June
                      30, 2006
Harry
                      J. Briers
/s/
                      Al Young
Director
June
                      30, 2006
Al
                      Young
/s/
                      Steven M. Plumb
Chief
                      Financial Officer
June
                      30, 2006
Steven
                      M. Plumb
/s/
                      L. Gene Stohler
Director
June
                      30, 2006
L.
                      Gene Stohler
78