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      D.C. 20549</strong></font></div>
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      8-K</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>CURRENT
      REPORT</strong></font></div>
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      TO SECTION 13 OR 15(d) OF THE</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>SECURITIES
      EXCHANGE ACT OF 1934</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>Date
      of Report: May 18, 2006</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>Date
      of earliest event reported: May 17, 2006</strong></font></div>
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      TELECOMMUNICATIONS, INC. </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: 8pt; FONT-FAMILY: Times New Roman">(Exact
      name of registrant as specified in charter)</font></div>
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      or
      other Jurisdiction of Incorporation or Organization)</font></div>
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              <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: 8pt; FONT-FAMILY: Times New Roman">(Commission
                File Number)</font></div>
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              <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: 8pt; FONT-FAMILY: Times New Roman">(IRS
                Employer Identification No.)</font></div>
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              <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: 12pt; FONT-FAMILY: Times New Roman"><strong>5555
                Triangle Parkway, Suite 300 </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: 12pt; FONT-FAMILY: Times New Roman"><strong>Norcross,
                GA 30092 </strong></font></div>
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      282-1600</strong></font></div>
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      telephone</font></div>
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      including area code)</font></div>
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    <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: 12pt; FONT-FAMILY: Times New Roman"><strong>936A
      Beachland Boulevard, Suite 13</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: 12pt; FONT-FAMILY: Times New Roman"><strong>Vero
      Beach, FL 32963</strong></font></div>
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      Name or Former Address, if Changed Since Last Report)</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of registrant under any of the following
      provisions:</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; 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 style="DISPLAY: inline; FONT-FAMILY: Wingdings">o</font>&#160;Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)</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"><font style="FONT-FAMILY: Wingdings">o</font>&#160;Soliciting
      material pursuant to
      Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b)) </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"><font style="FONT-FAMILY: Wingdings">o</font>&#160;Pre-commencement
      communications
      pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
      240.14d-2(b))</font></div>
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      communications
      pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
      240.13e-4(c))</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; 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>SAFE
      HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
      1995</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="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Information
      included in this Form 8-K may contain forward-looking statements within the
      meaning of Section 27A of the Securities Act and Section 21E of the Securities
      Exchange Act of 1934, as amended (the "Exchange Act"). This information may
      involve known and unknown risks, uncertainties and other factors which may
      cause
      Auriga Laboratories, Inc. (&#8220;Auriga&#8221;) and Multi-Link Telecommunications, Inc.&#8217;s
      (&#8220;Multi-Link&#8221;) actual results, performance or achievements to be materially
      different from future results, performance or achievements expressed or implied
      by any forward-looking statements. Forward-looking statements, which involve
      assumptions and describe Auriga and Multi-Link&#8217;s future plans, strategies and
      expectations, are generally identifiable by use of the words "may," "will,"
      "should," "expect," "anticipate," "estimate," "believe," "intend" or "project"
      or the negative of these words or other variations on these words or comparable
      terminology. Forward-looking statements are based on assumptions that may be
      incorrect, and there can be no assurance that any projections or other
      expectations included in any forward-looking statements will come to pass.
      Auriga and Multi-Link&#8217;s actual results could differ materially from those
      expressed or implied by the forward-looking statements as a result of various
      factors. Except as required by applicable laws, Multi-Link undertakes no
      obligation to update publicly any forward-looking statements for any reason,
      even if new information becomes available or other events occur 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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECTION
      2 - FINANCIAL 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"><strong>ITEM
      2.01 Completion of Acquisition or Disposition of Assets.</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="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      May
      17, 2006, Multi-Link Telecommunications, Inc., a Colorado corporation
      (&#8220;Multi-Link&#8221;), completed a merger (the &#8220;Merger&#8221;) with Auriga Laboratories,
      Inc., a Delaware corporation (&#8220;Auriga&#8221;). The Merger was effected pursuant to the
      terms of an Agreement and Plan of Merger (&#8220;Merger Agreement&#8221;), entered into on
      May 4, 2006, by and among Multi-Link, Auriga and Multi-Link Acquisition, Inc.
      a
      newly formed Delaware corporation and wholly-owned subsidiary of Multi-Link
      (&#8220;Subsidiary&#8221;). Pursuant to the terms of the Merger Agreement, the Subsidiary
      was merged with and into Auriga, with Auriga as the surviving entity. Auriga
      will continue its business under the name Auriga Laboratories, Inc. as a
      subsidiary of Multi-Link and will retain its Certificate of Incorporation and
      Bylaws. The officers and directors of Auriga prior to the Merger will remain
      the
      officers and directors of Auriga after the Merger. Following the Merger, the
      separate existence of Subsidiary ceased. Unless the context otherwise requires,
      &#8220;Company,&#8221; &#8220;we,&#8221; &#8220;our,&#8221; or &#8220;us&#8221; shall refer to Multi-Link and Auriga on a
      combined basis.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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 id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the terms of the Merger Agreement, Multi-Link acquired all of the outstanding
      shares of Common Stock of Auriga (&#8220;Auriga Common Stock&#8221;) for shares of Series A
      Convertible Preferred Stock, par value $0.01 per share of Multi-Link (&#8220;Preferred
      Stock&#8221;). At the closing of the Merger (&#8220;Closing&#8221;), in exchange for the Auriga
      Common Stock, Multi-Link issued to the stockholders of Auriga (&#8220;Auriga
      Stockholders&#8221;) 1,000,042 shares of Preferred Stock which will be convertible
      into 494,977,491 shares of Multi-Link Common Stock (&#8220;Conversion Shares&#8221;). Each
      outstanding share of Auriga Common Stock was converted into the right to receive
      0.0606392 shares of Preferred Stock and each outstanding option and warrant
      to
      purchase one (1) share of Auriga Common Stock will be assumed by Multi-Link
      and
      was converted into an option or warrant to purchase 30.013762 shares of
      Multi-Link Common Stock (with the exercise price being adjusted accordingly).
      </font></div>
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    <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>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">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="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
      the
      Closing, Auriga had Common Stock, options and warrants issued and outstanding
      as
      follows: </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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: 54pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">16,490,990
                shares of Common Stock.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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: 54pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Options
                to purchase 3,021,000 shares of Common Stock at exercise prices ranging
                from $0.85 to $1.85 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="justify"><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: 54pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Warrants
                to purchase 4,257,283 shares of Common Stock at exercise prices ranging
                from $0.85 to $2.50 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="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
      share of Preferred Stock will be convertible into 494.95677028 shares of
      Multi-Link&#8217;s Common Stock. Accordingly, after the Closing, and assuming no
      Auriga Stockholder elects dissenter&#8217;s rights, the Auriga Stockholders owned
      1,000,042 shares of Preferred Stock (equivalent to 494,977,491 shares of
      Multi-Link&#8217;s Common Stock on an as-converted basis) and the current Multi-Link
      stockholders owned 37,215,913 shares of Multi-Link&#8217;s Common Stock. Upon
      conversion of the Preferred Stock, the Auriga stockholders will own
      approximately 93% of the total outstanding shares of Multi-Link&#8217;s Common Stock,
      and the current Multi-Link stockholders will own approximately 7% of the total
      outstanding shares of Multi-Link&#8217;s Common Stock. </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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      ownership interests of the Auriga stockholders and the current Multi-Link
      stockholders will be subject to dilution upon exercise, if any, of the
      outstanding Auriga options and warrants that were assumed by Multi-Link in
      connection with the Merger. Accordingly, upon conversion of the Preferred Stock,
      the holders of Auriga&#8217;s Common Stock, options and warrants will own
      approximately 95% of Multi-Link&#8217;s Common Stock on a fully diluted basis, and the
      current Multi-Link stockholders will own approximately 5% of the Multi-Link&#8217;s
      Common Stock on a fully diluted basis.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Preferred Stock will immediately and automatically be converted into shares
      of
      Multi-Link&#8217;s Common Stock (the &#8220;Mandatory Conversion&#8221;) upon the approval by a
      majority of Multi-Link&#8217;s stockholders (voting together on an
      as-converted-to-common-stock basis), following the Merger, of a 1 for 15 reverse
      stock split of Multi-Link&#8217;s outstanding Common Stock (&#8220;Reverse Split&#8221;).
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      holders of shares of Preferred Stock are entitled to vote together with the
      holders of Multi-Link&#8217;s Common Stock, as a single class, upon all matters
      submitted to holders of Common Stock for a vote. Each share of Preferred Stock
      is entitled to a number of votes equal to the number of shares of Common Stock
      issuable as if converted at the record date. As such, the Auriga stockholders
      have approximately 93% of the total combined voting power of all classes of
      Multi-Link stock entitled to vote.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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: ">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="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Upon
      Mandatory Conversion of the shares of Preferred Stock, and subject to an
      adjustment of the Conversion Rate as a result of the Reverse Split, the Auriga
      stockholders will, in the aggregate, receive approximately 32,998,564 shares
      of
      Multi-Link&#8217;s Common Stock. Upon completion of the Reverse Split, the current
      Multi-Link stockholders will own approximately 2,481,063 shares of Multi-Link&#8217;s
      Common Stock. Therefore, the Auriga stockholders will own approximately 93%
      of
      the total outstanding shares of Multi-Link&#8217;s Common Stock, and the current
      Multi-Link stockholders will own approximately 7% of the total outstanding
      shares of Multi-Link&#8217;s Common Stock.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      a
      fully diluted basis, after the conversion of the Preferred Stock, the holders
      of
      Auriga&#8217;s Common Stock, options and warrants will own approximately 95% of
      Multi-Link&#8217;s Common Stock, and the current Multi-Link stockholders will own
      approximately 5% of the Multi-Link&#8217;s Common Stock. </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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      connection with the Reverse Split, Multi-Link&#8217;s board of directors may, in its
      discretion, provide special treatment to certain Multi-Link stockholders to
      preserve round lot holders (i.e., holders owning at least 100 shares) after
      the
      Reverse Split. In the event Multi-Link&#8217;s board determines to provide such
      special treatment, Multi-Link stockholders holding 1,500 or fewer shares of
      Common Stock but at least 100 shares of Common Stock will receive 100 shares
      of
      Common Stock after the Reverse Split, and persons holding less than 100 shares
      of Common Stock would not be affected. The terms and conditions of special
      treatment afforded to Multi-Link stockholders to preserve round lot
      stockholders, if any, including the record dates for determining which
      stockholders may be eligible for such special treatment, will be established
      in
      the discretion of Multi-Link&#8217;s board of directors. </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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Effective
      as of the Closing, Kevin R. Keating, Multi-Link&#8217;s current sole officer and
      director, resigned such positions and the following were appointed as directors
      and officers: </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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: 54pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Philip
                S. Pesin, Chairman, CEO and Chief Financial
                Officer</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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: 54pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dayne
                Wagoner, Secretary and Director</font></div>
            </td>
          </tr>

      </table>
    </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">Additional
      information concerning Philip S. Pesin and Dayne Wagoner is set forth below.
      </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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Multi-Link
      plans to promptly seek approval from its stockholders to elect such other
      persons to the Board of Directors that may be designated by the Directors,
      reincorporate in Delaware, effect a 1 for 15 reverse stock split, adopt a stock
      incentive plan and change Multi-Link&#8217;s corporate name to Auriga Laboratories,
      Inc. (collectively the &#8220;Actions&#8221;). At the Closing, KI Equity Partners I, LLC,
      and Auriga Stockholders holding at least a majority of the Preferred Stock
      received in the Merger, entered into a Voting Agreement, whereby the parties
      agreed to vote their shares of Multi-Link&#8217;s voting securities to approve the
      Actions. The Voting Agreement terminates upon approval of the
      Actions.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      soon
      as commercially practicable following the Closing, Multi-Link has agreed to
      cause its board of directors to satisfy the independence, audit and compensation
      committee and other corporate governance requirements under the Sarbanes-Oxley
      Act of 2002, the rules and regulations promulgated by the SEC, and the
      requirements of either NASDAQ or American Stock Exchange (&#8220;AMEX&#8221;) as selected by
      Multi-Link, whether or not Multi-Link&#8217;s Common Stock is listed or quoted, or
      qualifies for listing or quotation, on such national exchanges.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#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: ">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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
      the
      Closing, Multi-Link entered into a Financial Advisory Agreement with Keating
      Securities, LLC (&#8220;Keating Securities&#8221;), a registered broker-dealer, pursuant to
      which Keating Securities was compensated by Multi-Link for its advisory services
      rendered to Multi-Link in connection with the Merger with Auriga. The
      transaction advisory fee was $340,000, which fee was paid at Closing. The
      Financial Advisory Agreement is attached as Exhibit 10.1 to this Form 8-K,
      and
      is incorporated herein by reference.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Kevin
      R.
      Keating is the father of Timothy J. Keating, the principal member of Keating
      Investments, LLC. Keating Investments, LLC is the managing member of KI Equity,
      which was the majority stockholder of Multi-Link, and Keating Securities, LLC,
      the registered broker-dealer affiliate of Keating Investments, LLC. Kevin R.
      Keating is not affiliated with and has no equity interest in Keating
      Investments, LLC, KI Equity or Keating Securities, LLC and disclaims any
      beneficial interest in the shares of Multi-Link&#8217;s Common Stock owned by KI
      Equity. Similarly, Keating Investments, LLC, KI Equity and Keating Securities,
      LLC disclaim any beneficial interest in the shares of Multi-Link&#8217;s Common Stock
      currently owned by Kevin R. Keating.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      issuance of the Preferred Shares and, upon conversion, the Conversion Shares
      to
      the Auriga Stockholders was exempt from registration under the Securities Act
      of
      1933, as amended (the &#8220;Securities Act&#8221;), pursuant to Section 4(2).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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 id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Except
      for the Merger Agreement and the transactions contemplated by that agreement,
      neither Multi-Link, nor its directors and officers, had any material
      relationships with Auriga, its officers, directors or principal
      stockholders.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Multi-Link
      and Auriga are headquartered in Norcross, Georgia and will continue to trade
      under the Multi-Link name and ticker symbol until the completion of the
      corporate name change to Auriga Laboratories, Inc. and the other
      Actions.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      March
      30, 2006, in its Current Report on Form 8-K dated March 30, 2006, Multi-Link
      reported the execution of a letter of intent to acquire Auriga. On May 5, 2006,
      in its Current Report on Form 8-K dated May 4, 2006, Multi-Link reported the
      entry into the Merger Agreement with Auriga and included a copy of the Agreement
      and Plan of Merger therein as Exhibit 2.1. On May 8, 2006, Multi-Link filed
      an
      Amended Current Report on Form 8-K. Additionally, on May 8, 2006, Multi-Link
      filed an Information Statement on Schedule 14f-1 reporting the proposed Merger
      of Auriga and the pending change of control of Multi-Link at the Closing. These
      Current Reports and Information Statement are hereby incorporated by
      reference.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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: ">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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>BUSINESS
      OF MULTI-LINK</strong></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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Prior
      to
      the Closing, Multi-Link was a public &#8220;shell&#8221; company with nominal assets whose
      sole business was to identify, evaluate and investigate various companies to
      acquire or with which to merge.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>BUSINESS
      OF AURIGA</strong></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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUMMARY
      OF THE COMPANY </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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga
      Laboratories, Inc. (&#8220;Auriga&#8221; or the &#8220;Company&#8221;) was formed as a Delaware
      corporation in April 12, 2005 as part of a reorganization transaction involving
      several companies owned by the founders and is authorized to issue 50,000,000
      shares of $0.0001 par value common stock. In April 2005, all of the stock of
      Tryon Labs, Inc. (a Delaware corporation) and Auriga Pharmaceuticals, LLC (a
      Delaware limited liability corporation) was contributed to Auriga in exchange
      for stock in Auriga. As part of the reorganization transaction, Tryon Labs,
      Inc.
      changed its name to Auriga Development, Inc. and operates as a wholly-owned
      subsidiary engaged in drug development. Auriga Pharmaceuticals, LLC also became
      a wholly-owned subsidiary of Auriga.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga
      is
      a specialty pharmaceutical company with stand-alone sales, marketing, and
      development capabilities. Auriga currently markets the Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>&#174;
      </sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">family
      of
      products with approximately a 40-person sales force. Auriga has an exclusive
      license to the Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>&#174;</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      product
      line. Currently there are 7 separate products that fall under
      Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>&#174;</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      This
      product line is indicated for treatment and relief of cough, cold and allergy
      symptoms. These products offer different combinations of antihistamines,
      expectorants, decongestants, anticholinergics, and anti-tussive that are
      designed to provide symptomatic relief for several patient types in the acute
      respiratory disease area. </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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga
      plans to become a fully integrated pharmaceutical company by acquiring its
      own
      manufacturing and development capabilities. Since the launch of its first
      product line in August 2005, Auriga has achieved approximately $6.5 million
      in
      revenue. Moving forward, the Company will seek to acquire and/or in-license
      additional products and technologies to further grow revenues.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Over
      time, the Company plans on building three therapeutically focused product
      franchises in the areas of respiratory diseases, gastrointestinal (GI)
      disorders, and the central nervous system (CNS)/pain areas. The conceptual
      framework for this strategy is to initially acquire/license a mature product
      for
      each therapeutic area with brand equity that is no longer the primary focus
      of
      its originator. The Company has already done this in the respiratory space
      with
      its Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>&#174;</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      product
      line, but anticipates acquiring and/or developing a GI and CNS/pain product.
      These opportunities will then provide the impetus for further expansion of
      the
      sales force, allowing for additional promotional reach and geographic scope.
      Simultaneously, the Auriga development team, through collaboration with the
      Auriga commercial team, plans to identify and develop new products as well
      as
      enhance existing products with proprietary technologies in order to introduce
      additional products for each therapeutic division. In addition, the Company
      intends to file for regulatory approval for these newly developed products
      (and
      enhanced existing products) in order to achieve both regulatory and intellectual
      property (IP) exclusivity in the market. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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: ">5</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
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        </div>
      </div>
    </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">Ultimately,
      as these therapeutic divisions expand and mature in the marketplace, Auriga
      plans to realize synergies between divisions and will be able to &#8220;cross-promote&#8221;
each division&#8217;s products in an effort to enhance product launches, intensify
      promotion during seasonal peaks and react to competitive threats, among other
      things.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company currently operates out of two wholly-owned subsidiaries located in
      Atlanta, Georgia: Auriga Pharmaceuticals, LLC and Auriga Development, Inc.
      The
      Company&#8217;s strategy is five-fold: </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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="justify"><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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>To
                focus on low-risk and short-term opportunities that can reach the
                market
                within short time frames in order to establish focused therapeutic
                divisions within the company</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.&#160;
                In general, Auriga is interested in pharmaceutical products that
                are
                already approved, or on the market, have a market presence and an
                established reputation in the medical community, but may no longer
                have
                patent protection.&#160; Using its expertise, the Company plans to combine
                such drugs with patented reformulation and/or drug delivery or other
                technologies in an effort to produce unique product profiles with
                distinct
                market and/or clinical advantages.&#160; These proprietary and potentially
                patented products will then be re-introduced to the market by leveraging
                the existing brand equity and patient base of the original product
                and the
                improved formulation and drug delivery technology which Auriga has
                added.
                Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>&#174;</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                is
                an example if this type of product and strategy.
                </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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="justify"><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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>To
                attract co-promote partners and in-license
                opportunities.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                Auriga anticipates that product additions may fund expansion of
                therapeutically-focused sales divisions and development of pipeline
                products and provide opportunities for the Company to co-promote
                with
                other products.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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="justify"><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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>To
                focus on low-risk and medium term opportunities that can reach the
                market
                within 48 months. </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Products
                in this category of interest have been</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">previously
                approved, but may be able to be introduced to the market by making
                changes
                in the delivery route or dosing schedule of the drug. By utilizing
                the
                505(b)(2) regulatory approval pathway within Food &amp; Drug
                Administration (the &#8220;FDA&#8221;), Auriga hopes to introduce well-known products
                with renewed market exclusivity upon approval.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga
                is currently working on a pain product that is the most widely prescribed
                drug combination in the U.S. By applying a rapid-dissolve technology
                to
                the product, Auriga hopes to be able to introduce this product within
                an
                expected FDA approval time frame of 48 months and possibly recapture
                a
                portion of this annual 100 million prescription
                market.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(iv)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>To
                develop a proprietary patent portfolio to protect therapeutic categories
                Auriga desires to enter</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
                Auriga is aggressively working with its regulatory and intellectual
                property attorneys in an effort to file and secure patent claims
                in the
                United States covering product inventions and innovations that it
                believes
                are unique. These patents, if issued and ultimately found to be valid,
                may
                enable Auriga to create a barrier to entry for any competitors in
                the
                United States market (in addition to regulatory exclusivity provided
                by
                FDA approval).</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
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    </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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(v)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>To
                identify and develop new products utilizing known chemical entities
                combined with proprietary delivery technologies for use in new disease
                areas/indications for that chemical entity.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                By
                identifying high value markets with unmet or under-met needs and
                developing products to serve those needs, the company may yield
                significant franchise value through product introduction with both
                regulatory and IP exclusivity in the market. Currently, the Company
                is
                working on delivering fluticasone, a highly effective topical steroid
                used
                in asthma and dermatology, to the colon and lower intestine for use
                in
                treating Crohn&#8217;s disease, which represents approximately a $1.3 billion
                market according to The 2004 IMS Year in Review for the U.S. Prescription
                Market. </font></div>
            </td>
          </tr>

      </table>
    </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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">DEVELOPMENT
      PROJECTS</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      April
      10, 2006, the Company signed a development agreement with Balchem Corporation
      to
      develop an orally dissolving tablet (ODT) combination of acetaminophen and
      hydrocodone (HC/APAP) (the &#8220;Balchem Agreement&#8221;). This combination represents the
      most widely prescribed class of pain management medication in the U.S. as
      measure by dispensed prescriptions. In 2005, approximately 130 million
      prescriptions of HC/APAP combinations were dispensed in the U.S. market
      according to the 2004 IMS National Prescription Audit. By utilizing a
      taste-masking technology, combined with a rapid, orally dissolving tablet (ODT)
      form, and filing for regulatory approval using the 505(b)(2) pathway, the
      Company believes commercial launch with exclusivity may be accomplished in
      approximately 2-3 years. Originally developed for use in the food industry,
      the
      pharmaceutical applications of this taste-masking technology may offer a
      innovative and unique solution to the problem of taste masking that may give
      Auriga&#8217;s products a competitive advantage over its competitors if Auriga is
      successful in obtaining the license to this technology. Additionally, the
      manufacturing costs of the taste-masking technology are expected to be lower
      than traditional taste-masking methods further affording a marketing advantage
      in addition to potentially higher margins to Auriga.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
      the
      Balchem Agreement, the Company retained Balchem to scale up and validate the
      Balchem taste masking technology for use with Company products.&#160; No new
      development is anticipated, and Balchem will continue to own all intellectual
      property in its technology.&#160; If any new development becomes necessary, a
      separate development agreement that takes into account ownership and or use
      rights of the new development will be negotiated between the
      parties.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Balchem Agreement remains in force until December 31, 2007, and may be renewed
      by mutual agreement of the parties.&#160; Either party may terminate the Balchem
      Agreement if the other party commits an uncured material breach or becomes
      bankrupt. The maximum compensation to be paid to Balchem under the Balchem
      Agreement is $165,000, $140,000 of which is dependent on Balchem meeting certain
      milestones and requirements. The Balchem Agreement contains industry standard
      terms and conditions with respect to warranty, indemnity, limitation of
      liability and miscellaneous provisions.&#160; A separate license and supply
      agreement will be negotiated by the parties to allow Company to use the Balchem
      technology with its products. There can be no assurance that the Company will
      be
      able to license the Balchem technology or enter into a license agreement on
      acceptable terms. The Balchem Agreement is attached hereto as Exhibit
      10.13.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga
      plans to launch in Fall 2006 two line extensions to the Extendryl&#174; family of
      products. Auriga has already identified a manufacturer and formulations for
      these products. These new line extensions will bring the total number of
      products sold under the Extendryl&#174; name to nine.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga&#8217;s
      current development pipeline opportunities have been prioritized according
      to
      market size, un-addressed market needs, availability of differentiating drug
      delivery technologies, and potential for market approval within 36 months of
      the
      start of development. We have identified product opportunities in the
      respiratory, pain/CNS and GI therapeutic 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga
      is
      currently working on applying an internally developed (and patent pending)
      delivery technology that combines rapid dissolve and extended release (ER/RD)
      formulation of drug product. While both of these delivery methods are prevalent
      in the pharmaceutical market, utilization of both in the same product is
      reasonably unique. Auriga plans on developing an ER/RD form of its Extendryl
      Jr
      product. This product is used for pediatric cough/cold and fits very nicely
      within Auriga&#8217;s respiratory franchise growth plan. Formulation development is
      near completion, prototype production is currently expected in the third quarter
      of 2006, patents for the technology have been filed in the United States, and
      commercial launch is currently planned for fall 2007.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">In
      the
      area of gastrointestinal (&#8220;GI&#8221;) diseases, a market that Auriga&#8217;s management
      believes is attractive for drug reformulations, Auriga plans to focus its
      initial development activities on inflammatory diseases of the bowel such as
      Ulcerative Colitis and Crohn&#8217;s disease. Auriga believes that is has currently
      identified formulations that can achieve colonic delivery of anti-inflammatory
      agents that may offer a reduction in the side effects typically associated
      with
      these drugs. This is of particular importance for drugs such as steroids, which
      offer superior efficacy in suppressing GI inflammation. However, because
      inflammatory bowel diseases often require long term or chronic treatment, the
      benefit of steroids has been sharply limited by side effects which can include
      significant weight gain, damage to adrenal glands and other vital organs,
      diminished bone mass density, increased susceptibility to infection, and
      elevated blood cholesterol levels. While industry analysts estimate the market
      for GI anti-inflammatory products to be in excess of $1.3 billion, the largest
      part of this market is attributable to the 5-acetylsalicylic acid (5-ASA) based
      drugs, despite their limited efficacy. In light of this, the Company believes
      that the introduction of an effective topically-delivered steroid to the colon
      may achieve an acceptable share of this market and possibly expand the overall
      size of the market as well. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Through
      partnerships with third parties, Auriga has access to several proprietary drug
      delivery technologies. These technologies include those that achieve oral
      controlled release, rapid dissolve/taste masking, and buccal absorption
      (absorption by the lining cells in the oral cavity). Access to such technologies
      comes from the Company&#8217;s experience, knowledge base and networks in the drug
      delivery field. In general, the strategy of Auriga will be to license
      technologies from specialty drug delivery companies for specific product
      applications and to lever the experience of such companies for Auriga&#8217;s product
      development. Auriga anticipates that the initial products in its currently
      planned development pipeline will use technologies that have regulatory
      approvals and well-established histories in the market. In some cases the
      Company believes that it has unique access to certain technologies as a result
      of its initial involvement in their development. Auriga&#8217;s intellectual property
      strategy attempts to ensure that new products are protected by composition
      of
      matter, use and process patents while providing freedom to operate in the market
      place.</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">
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        </div>
      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga&#8217;s
      product development strategy is to make improvements to drugs that have already
      been approved and thereby significantly reduce overall development risk. Filings
      for regulatory approval will use the 505 (b)(2) New Drug Application (&#8220;NDA&#8221;)
      pathway that allows use of historical data on drug efficacy and safety thus
      reducing the overall development time. Auriga plans to further manage
      development risk through a tiered approach that initially launches product
      line
      extensions of existing brands followed by new products that apply new delivery
      approaches to approved drugs. Subsequently, Auriga anticipates that new products
      that address new clinical indications for approved drugs can be
      developed.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">PRODUCT
      PORTFOLIO </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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Extendryl&#174;:
      </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga
      has an exclusive license to the Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>&#174;</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      product
      line. Currently there are 7 separate products that fall under
      Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>&#174;</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      This
      product line is indicated for treatment and relief of cough, cold and allergy
      symptoms. These products offer different combinations of antihistamines,
      expectorants, decongestants, anticholinergics, and anti-tussive that are
      designed to provide symptomatic relief for several patient types in the acute
      respiratory disease area. The Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>&#174;</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      product
      line consists of the following separate products:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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"><strong>Extendryl&#174;
      HC - (</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1,000mg
      Guaifenesin, 10mg hydrocodone)</font></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"><strong>Extendryl&#174;
      Sr - (</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8mg
      chlorphenaramine, 20mg phenylepherine, 2.5mg methscopolamine)</font></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"><strong>Extendryl&#174;
      JR- (</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4mg
      chlorphenaramine, 10mg phenylepherine, 1.25mg methscopolamine)</font></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"><strong>Extendryl&#174;
      pse- (</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">120mg
      psuedoephederine, 2.5mg methscopolamine)</font></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"><strong>extendryl&#174;
      dm- (</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8mg
      chlorphenaramine, 30mg dextromethorphan, 2.5mg methscopolamine)</font></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"><strong>extendryl&#174;
      chews- (</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4mg
      chlorphenaramine, 10mg phenylepherine, 1.25mg methscopolamine)</font></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"><strong>extendryl
      &#174;syrup- (</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4mg
      chlorphenaramine, 10mg phenylepherine, 1.25mg methscopolamine)</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>&#174;
      </sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">products
      are manufactured for the Company by Sovereign Pharma and Provident
      Pharmaceuticals. The Company has not obtained specific regulatory approval
      from
      the Food and Drug Administration ("FDA").</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: ">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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Currently,
      an FDA program allows the Company, in its opinion, to manufacture and market
      its
      current Extendryl&#174; products, without going through the formal approval process
      of submitting an NDA with safety and efficacy data. The Company believes its
      current Extendryl&#174; products are governed by a special regime established by a
      string of legislation spanning from 1938 through 1984 and administrative
      guidance as recent as 2003. Prior to 1938, drugs could be marketed in the U.S.
      as long as a drug&#8217;s label did not present false information regarding the drug&#8217;s
      strength and purity. The Federal Food, Drug and Cosmetic Act of 1938 (the &#8220;Act&#8221;)
      required the manufacturer to prove the </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>safety</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      of a
      drug before introducing it to the market. In 1962, the Act was amended to
      further require the manufacturer to prove new drugs were </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>effective</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      as well.
      The FDA then undertook a Drug Efficacy Study Implementation program (&#8220;DESI&#8221;) for
      all drugs approved between 1938 and 1962, allowing these drugs to remain on
      the
      market while evidence of their effectiveness was reviewed. These pre-1962 drugs
      are commonly referred to as DESI Drugs. While the FDA may consider Auriga&#8217;s
      products to be new drugs, it has indicated its intent to exercise enforcement
      discretion and not pursue regulatory action for DESI drugs, such as Auriga&#8217;s
      Extendryl&#174; products, unless certain conditions occur. If these conditions were
      to materialize, or the FDA disagreed with Auriga&#8217;s conclusions about the
      regulatory status of these products, Auriga might be required to submit an
      NDA
      and/or cease marketing until the FDA grants approval to do so.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SALES
      &amp; MARKETING STRATEGY</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company has executed the first stage of its commercialization strategy by
      acquiring an established, branded prescription product line
      (Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>&#174;</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">)
      and
      deploying a therapeutically (respiratory) focused 40-person sales force focused
      on influencing the prescribing habits of physicians through promotion and
      building relationships with high prescribing targets. This initial stage has
      yielded a revenue base of $6.5 million that provides current revenues to Auriga
      that management anticipates will at least partially support product acquisitions
      and development.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      essence, the sales and marketing strategy for Auriga can be described as a
&#8220;high
      compression&#8221; promotional effort. Our sales and marketing team will attempt to
      identify those physician offices that offer the highest potential return for
      promotional effort; these targeted physicians will then receive promotion in
      the
      form of: </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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="justify"><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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Frequent
                personal sales calls from Auriga
                representatives</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: 18pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Drug
                samples </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: 18pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Promotional
                and clinical materials designed to support clinical rationale for
                use of
                Auriga products </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: 18pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Peer-to-peer
                educational conferences/meetings. </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: 18pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Journal
                Advertising</font></div>
            </td>
          </tr>

      </table>
    </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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      key
      to this strategy will be to only focus on the most productive prescribers who
      respond to promotional efforts. The Company&#8217;s sales analytics team will attempt
      to track prescribing response to promotional activities which should result
      in a
      continuous adjustment of targeting and concentration of promotional
      activities.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Auriga team will also endeavor to ensure that sufficient product stock is
      established and maintained within both wholesale and retail distribution outlets
      so any demand created by the sales force can be met with adequate supply in
      the
      market. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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: ">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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      Auriga
      attempts to build a broader product portfolio for its respiratory sales
      division, the executive team currently intends to simultaneously seek product
      opportunities in the CNS/Pain and GI therapeutic areas in order to begin
      building additional sales teams to focus on these additional therapeutic areas.
      As it moves into additional therapeutic areas, Auriga will execute the same
      organizational structure evolution process and sales and marketing plan for
      each
      subsequent therapeutic division.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">PATENTS
      AND PROPRIETARY RIGHTS </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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga&#8217;s
      success depends in part on its ability to:</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
      Obtain
      patents;</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
      Protect
      trade secrets;</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
      Operate
      without infringing the proprietary rights of others; and</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-
      Prevent
      others from infringing on its proprietary rights.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      addition to filing its own patents, Auriga will obtain licenses to patents
      and
      patent applications and other proprietary rights from others.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company has two patent applications presently pending in the United States
      Patent and Trademark Office and plans to use Patent Cooperation Treaty filings
      in an attempt to expand coverage of the pending U.S. patent applications to
      individual countries outside the U.S. at appropriate times as it sees
      fit.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga&#8217;s
      initial patent application is on sequential release formulations of
      cough/cold/allergy actives designed to orchestrate the effectiveness of their
      pharmacologic action. </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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga&#8217;s
      second patent application describes what it believes is a novel mixed-release
      tablet formulation containing cough/cold therapeutic agents that dissolves
      rapidly in the mouth and provides continuous (immediate and extended) dosing
      for
      8-12 hours. </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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Development
      of the Company&#8217;s GI product will use licensed technology that is covered by
      multiple U.S. and European patents with coverage up to 2021.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company primarily protects its proprietary information by filing U.S. and
      foreign patent applications related to its proprietary technology, inventions
      and improvements. Proprietary rights relating to the Company&#8217;s technologies will
      be protected from unauthorized use by third parties only to the extent that
      they
      are covered by valid and enforceable patents or are effectively maintained
      as
      trade secrets. The strength and breadth of patent positions of pharmaceutical
      companies are extremely complex and uncertain. The scope and extent of the
      Company&#8217;s patent protections for some of its products, including the Extendryl&#174;
line are particularly uncertain because formulations for the actives in this
      product line have existed in the public domain for many years, some of which
      have patent protection. With respect to fluticasone, other parties have been
      granted patents on methods for producing the drug, specific formulations, and
      the methods of treatment or use. The publication of this information limits
      the
      scope of any patents the Company is seeking and may prevent it from obtaining
      any meaningful patent protection. The Company cannot assure you that any patents
      that it is seeking, or that are licensed to it, will afford protection against
      competitors. Nor can the Company assure you that any patent applications will
      result in patents being issued.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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        </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: ">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="justify"><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">In
      addition, the laws of certain foreign countries do not protect the Company&#8217;s
      intellectual property rights to the same extent as do the laws of the United
      States. The patent position of pharmaceutical companies involves complex legal
      and factual questions. The Company cannot predict whether the intellectual
      property laws of foreign countries will be enforceable. The Company cannot
      assure you that any of its patents or patent applications, if issued, will
      not
      be challenged, invalidated or designed around. Nor can the Company assure you
      that the patents will provide proprietary protection or competitive advantages
      to it. Furthermore, the Company cannot assure you that others will not
      independently develop similar technologies or duplicate any technology developed
      by it.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga&#8217;s
      commercial success depends significantly on its ability to operate without
      infringing the patents and other proprietary rights of third parties. The
      Company cannot assure you that its technologies do not and will not infringe
      the
      patents or violate other proprietary rights of third parties. In the event
      any
      of the Company&#8217;s technologies are found to infringe or violate the intellectual
      property rights of others, the Company may be prevented from pursuing research,
      development or commercialization of its products.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">There
      has
      been extensive litigation regarding patents and other intellectual property
      rights in the biotechnology and pharmaceutical industries. The defense and
      prosecution of intellectual property suits and related legal and administrative
      proceedings in the United States and abroad involve complex legal and factual
      questions. These proceedings are costly and time-consuming to pursue and their
      outcome is uncertain. Litigation may be necessary to enforce patents issued
      to
      or licensed by the Company, to protect trade secrets or know-how owned or
      licensed by it and to determine the enforceability, scope and validity of the
      proprietary rights of others.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company will incur substantial expense and be forced to divert significant
      effort and resources of its technical and management personnel in the event
      it
      must prosecute or defend any litigation or other administrative proceeding.
      If
      an adverse determination were made, the Company could incur significant
      liabilities to third parties or be required to seek licenses which may not
      be
      available from third parties or may be prevented from selling its products
      in
      certain markets, if at all. Although patent and intellectual property disputes
      are often settled through licensing or similar arrangements, costs associated
      with these arrangements may be substantial and could include ongoing royalties.
      Furthermore, the Company cannot assure you that the necessary licenses would
      be
      available to it on satisfactory terms, if at all.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      addition to patents, the Company relies on trade secrets and proprietary
      know-how, which it seeks to protect, in part, through confidentiality agreements
      with some of its employees. The Company cannot assure you that these
      confidentiality or proprietary information agreements will meaningfully protect
      its technology or provide it with adequate remedies in the event of unauthorized
      use or disclosure of this information. Nor can the Company assure you that
      the
      parties to these agreements will not breach these agreements or that its trade
      secrets will not otherwise become known to or be independently developed by
      competitors.</font></div>
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    <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>RISK
      FACTORS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">You
      should consider carefully the following Risk Factors and all other information
      set forth in this Report before making an investment in the Company. Investing
      in Auriga involves a high degree of risk. Any of the following risks could
      materially harm Auriga&#8217;s business and could result in a complete loss of your
      investment.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">RISKS
      RELATED TO THE BUSINESS</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <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">THE
      REGULATORY STATUS OF SOME OF AURIGA&#8217;S PRODUCTS MAKES THESE PRODUCTS SUBJECT TO
      INCREASED COMPETITION AND OTHER RISKS</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      regulatory status of Auriga&#8217;s products may allow third parties to more easily
      introduce competitive products, and may make it more difficult for the Company
      to sell its products in the future. Currently, an FDA program allows the
      Company, in its opinion, to manufacture and market its products, and permits
      others to manufacture and market similar products, without submitting safety
      or
      efficacy data. With respect to the Company&#8217;s current products, the Company does
      not hold rights in patents protecting it against such competitive pressures.
      This results in increased competition because other companies can enter the
      market without having to submit safety and efficacy data to sell competing
      products. On several occasions, the FDA has considered changing the
      classification of certain single entity and combination product types of drugs
      from prescription to over-the-counter use, and which permit sponsors to utilize
      foreign over-the-counter experience data to establish a product as safe and
      effective for over-the-counter use in the U.S. If the FDA does change the
      classification, we might have to reformulate certain of the Company&#8217;s products
      or submit safety and efficacy data on those products, which could be costly,
      or
      the Company might have to discontinue selling certain products if the FDA does
      not approve any marketing application filed by it.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      addition, the FDA considers certain products to be new drugs, but has indicated
      its intent to exercise enforcement discretion and not pursue regulatory action
      unless certain conditions occur. If these conditions were to materialize, or
      the
      FDA disagreed with the Company&#8217;s conclusions about the regulatory status of
      these products, the Company might be required to submit an NDA and/or cease
      marketing until the FDA grants approval to do so. The FDA could also, at any
      time, promulgate new regulations or policies to require the submission of an
      NDA
      for each of these products.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <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">FURTHER
      FINANCING CANNOT BE GUARANTEED.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">It
      is
      likely that Auriga will need to raise additional capital in order to meet its
      business plan, and the required additional financing may not be available on
      terms acceptable to Auriga, or at all. There can be no assurances that Auriga's
      anticipated future financings will occur, or that such financings will be
      available on acceptable terms. No one should rely on the prospect of future
      financings in evaluating Auriga.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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    </div>
    <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">ABILITY
      TO OBTAIN OR SUSTAIN MARKET ACCEPTANCE FOR AURIGA&#8217;S SERVICES AND
      PRODUCTS.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Failure
      to establish a brand and presence in the marketplace on a timely basis could
      adversely affect the financial condition and operating results of Auriga.
      Moreover, Auriga cannot be sure that it will successfully complete the
      development and introduction of new products or product enhancements or that
      any
      new products developed will achieve acceptance in the marketplace. It may also
      fail to develop and deploy new products and product enhancements on a timely
      basis. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      addition, a material component of Auriga&#8217;s revenue to date has been used, and
      Auriga anticipates will be used in the future, by </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">its
      customers, who may include wholesalers/distributors, retail pharmacies and
      hospitals, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">for
      the
      purpose of accumulating inventory. This inventory held by Auriga&#8217;s customers is
      subject to the standard returns policies of the Company and its distributors.
      Some or even a material component of Auriga&#8217;s revenue to date, and any revenues
      it generates in the future, could be significantly adversely impacted due to
      returns as a result of insufficient demand in the marketplace or product
      expiration dating. Such product returns and the resulting financial impact
      could
      have a </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">material
      adverse effect on the operations and financial condition of the Company if
      such
      product returns exceed established reserves for anticipated product
      returns.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <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">THE
      COMPANY&#8217;S BUSINESS IS HEAVILY REGULATED BY GOVERNMENTAL AUTHORITIES, AND FAILURE
      TO COMPLY WITH SUCH REGULATION OR CHANGES IN SUCH REGULATIONS COULD NEGATIVELY
      AFFECT OUR RESULTS</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Many
      government authorities regulate our business, including, among others, the
      FDA,
      the SEC, foreign regulatory authorities, the Drug Enforcement Administration,
      the Consumer Product Safety Commission, the Federal Trade Commission, the
      Occupational Safety and Health Administration, the Department of Health &amp;
Human Services, the Centers for Medicare and Medicaid Services, the
      Environmental Protection Agency, the Department of Labor, state, local and
      foreign governments and the Internal Revenue Service. We may incur significant
      expenses to comply with regulations imposed by these authorities. Also, our
      future results could be negatively impacted by changes in governmental
      regulation over the pharmaceutical industry, including regulation of Medicare,
      Medicaid and similar programs, by reducing our revenue and profits and/or
      increasing our costs and expenses in order to comply with such regulation.
      In
      addition, all of our third-party manufacturers, third-party sample distributors
      and product packaging companies are subject to inspection by the FDA and, in
      appropriate cases, the Drug Enforcement Administration and foreign regulators.
      If our third-party manufacturers and other supply and distribution chain
      partners do not comply with FDA regulations in the future, they may not deliver
      products to us or deliver samples to our representatives, or we may have to
      recall products. Even if deficiencies observed by the FDA do not relate to
      our
      products, our third-party manufacturers, third-party sample distributors and
      product packaging companies may be delayed in manufacturing and supplying our
      products to us in a timely manner until they address their compliance issues
      with the FDA.</font></div>
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      </div>
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">THE
      MARKET FOR PRODUCTS AND SERVICES IN THE PHARMACEUTICALS INDUSTRY IS COMPETITIVE;
      AURIGA MAY NOT BE ABLE TO COMPETE SUCCESSFULLY.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      market for products and services in the pharmaceuticals industry is highly
      competitive. Most of these competitors have longer operating histories and
      significantly greater financial, technical, marketing and other resources than
      Auriga, and may be able to respond more quickly than Auriga can to new or
      changing opportunities and customer requirements. Also, the competitors have
      greater name recognition and more extensive customer bases that they can
      leverage to gain market share. These competitors are able to undertake more
      extensive promotional activities, adopt more aggressive pricing policies and
      offer more attractive terms to purchasers than Auriga can.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <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">LOSS
      OF
      KEY EXECUTIVES AND FAILURE TO ATTRACT QUALIFIED MANAGEMENT COULD LIMIT AURIGA&#8217;S
      GROWTH AND NEGATIVELY IMPACT AURIGA&#8217;S OPERATIONS.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; 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">Auriga
      depends highly upon its senior management team. It will continue to depend
      on
      operations management personnel with pharmaceutical and scientific industry
      experience. At this time, Auriga does not know the availability of such
      experienced management personnel or how much it may cost to attract and retain
      such personnel. The loss of the services of any member of senior management
      or
      the inability to hire experienced operations management personnel could have
      a
      material adverse effect on the operations and financial condition of
      Auriga.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <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">DEPENDENCE
      ON COLLABORATORS.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; 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">Auriga
      relies on various third parties for certain aspects of the development,
      manufacture and promotion of the Company&#8217;s present and planned products. There
      can be no assurance that Auriga will be able to enter into future collaborative
      arrangements on favorable terms, or at all. Even if Auriga is successful in
      entering into such collaborative agreements, there can be no assurance that
      any
      such arrangement will be successful. The success of any such arrangement is
      dependent on, among other things, the skills, experience and efforts of the
      third party&#8217;s employees responsible for the project, the third party&#8217;s
      commitment to the arrangement, and the financial condition of the third party,
      all of which are beyond the control of the Company.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <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">RESULTS
      OF OPERATIONS MAY BE AFFECTED BY CHANGING MARKET PRICES AND/OR REQUIREMENTS
      FOR
      PHARMACEUTICALS. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; 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">Auriga's
      results of operations may be affected by changing resale prices or market
      requirements for pharmaceuticals, some of which are priced on a commodity basis.
      The sale price, and market demand for, these materials can be volatile due
      to
      numerous factors beyond Auriga's control, which may cause significant
      variability in its period-to-period results of operations.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
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      </div>
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      </div>
    </div>
    <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">RESULTS
      OF OPERATIONS WILL FLUCTUATE.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; 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">Auriga&#8217;s
      revenues and results of operations will vary from quarter to quarter in the
      future. A number of factors, many of which are outside of Auriga&#8217;s control, may
      cause variations in Auriga&#8217;s results of operations, including:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">demand
                and price for Auriga&#8217;s products; </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: 18pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                timing and recognition of product
                sales;</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: 18pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">unexpected
                delays in developing and introducing
                products;</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: 18pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">unexpected
                delays in manufacturing Auriga&#8217;s
                products;</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: 18pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">increased
                expenses, whether related to marketing, product development or
                administration or otherwise;</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: 18pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">insufficient
                demand in the marketplace could cause Auriga&#8217;s distributors to return
                product;</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: 18pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                mix of revenues derived from
                products;</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: 18pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                hiring, retention and utilization of personnel;
                and</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: 18pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">general
                economic factors.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">IF
      PHYSICIANS AND PATIENTS DO NOT ACCEPT AURIGA&#8217;S CURRENT OR FUTURE PRODUCTS,
      AURIGA MAY BE UNABLE TO GENERATE SIGNIFICANT REVENUE, IF ANY. </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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      products Auriga currently markets, or products that it may develop or acquire
      in
      the future, could fail to gain market acceptance among physicians, health care
      payors, patients and the medical community. Physicians may elect not to
      recommend these drugs for a variety of reasons including: </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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: 63pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">timing
                of market introduction of competitive
                drugs;</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: 63pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">lower
                demonstrated clinical safety and efficacy compared to other
                drugs;</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: 63pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">lack
                of cost-effectiveness;</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: 63pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">lack
                of availability of reimbursement from managed care plans and other
                third-party payors;</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: 63pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">convenience
                and ease of administration;</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: 63pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">prevalence
                and severity of adverse side
                effects;</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: 63pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">other
                potential advantages of alternative treatment methods;
                and</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: 63pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ineffective
                marketing and distribution support.</font></div>
            </td>
          </tr>

      </table>
    </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: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If
      Auriga&#8217;s products fail to achieve market acceptance, Auriga would not be able to
      generate significant revenue. </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: ">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: 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">NO
      ASSURANCE OF ADEQUATE THIRD-PARTY REIMBURSEMENTS</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; 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">The
      Company&#8217;s ability to commercialize successfully its products under development
      or under consideration for acquisition or license is dependent in part on the
      extent to which appropriate levels of reimbursement for the
      Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>&#174;
      </sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">products
      are obtained from government authorities, private health insurers, and managed
      care organizations such as health maintenance organizations or HMOs. The Company
      estimates that significant portion of its cumulative Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>&#174;
      </sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">revenue
      may be subjected to the reimbursement rules of such organizations. Managed
      care
      organizations and other third-party payors are increasingly challenging the
      pricing of pharmaceutical products. The trend toward managed healthcare in
      the
      United States, the growth of organizations such as HMOs, and legislative
      proposals to reform healthcare and government insurance programs could
      significantly influence the purchase of pharmaceutical products, resulting
      in
      lower prices and reduced demand for Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>&#174;
      </sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">or
      the
      Company&#8217;s products under development or under consideration for acquisition or
      license. Such cost containment measures and potential legislative reform could
      affect the Company&#8217;s ability to sell Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>&#174;
      </sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
      or its
      products under development or consideration for acquisition or license and
      may
      have a material adverse effect on the Company. Significant uncertainty exists
      about the reimbursement status of newly approved pharmaceutical products.
      Although the Company has obtained approvals for reimbursement for the cost
      of
      Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>&#174;
      </sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">from
      many
      third-party payors, such approvals, in the United States and in foreign
      countries, may be discontinued for Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>&#174;
      </sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">or
      any of
      the Company&#8217;s products under development or under consideration for acquisition
      or license. The unavailability or inadequacy of third-party reimbursement for
      Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>&#174;
      </sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
      or
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
      Company&#8217;s products under development or to be acquired or licensed</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
      may
      reduce the demand for, or negatively affect the price of, these products, which
      would have a material adverse effect on the Company.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">There
      have been, and the Company expects that there will continue to be, federal
      and
      state proposals to constrain expenditures for medical products and services,
      which may affect payments for any of its approved products. The Centers for
      Medicare and Medicaid Services frequently change product descriptors, coverage
      policies, product and service codes, payment methodologies and reimbursement
      values. Third-party payors often follow Medicare coverage policy and payment
      limitations in setting their own reimbursement rates and may have sufficient
      market power to demand significant price reductions. As a result of actions
      by
      these third-party payors, the health care industry is experiencing a trend
      toward containing or reducing costs through various means, including lowering
      reimbursement rates, limiting therapeutic class coverage and negotiating reduced
      payment schedules with service providers for drug products. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</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">The
      Company&#8217;s inability to promptly obtain coverage and profitable reimbursement
      rates from government-funded and private payors for any approved products could
      have a material adverse effect on its operating results and its overall
      financial condition. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">RECENT
      FEDERAL LEGISLATION WILL INCREASE THE PRESSURE TO REDUCE PRICES OF
      PHARMACEUTICAL PRODUCTS PAID FOR BY MEDICARE, WHICH COULD ADVERSELY AFFECT
      AURIGA&#8217;S REVENUES, IF ANY. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</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">The
      Medicare Prescription Drug Improvement and Modernization Act of 2003, or MMA,
      changes the way Medicare will cover and pay for pharmaceutical products. The
      legislation expanded Medicare coverage for drug purchases by the elderly and
      eventually will introduce a new reimbursement methodology based on average
      sales
      prices for drugs. In addition, this legislation provides authority for limiting
      the number of drugs that will be covered in any therapeutic class. As a result
      of this legislation and the expansion of federal coverage of drug products,
      Auriga expects that there will be additional pressure to contain and reduce
      costs. These cost reduction initiatives and other provisions of this legislation
      could decrease the coverage and price that Auriga receives for any approved
      products and could seriously harm its business. While the MMA applies only
      to
      drug benefits for Medicare beneficiaries, private payors often follow Medicare
      coverage policy and payment limitations in setting their own reimbursement
      rates, and any reduction in reimbursement that results from the MMA may result
      in a similar reduction in payments from private payors. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; 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: ">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: 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">ACQUISITION
      OF PRODUCTS</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; 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">&#160;&#160;&#160;&#160;&#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
      part
      of the Auriga&#8217;s growth strategy, Auriga intends to acquire and develop
      additional product candidates or approved products. The success of this strategy
      depends upon Auriga&#8217;s ability to identify, select and acquire pharmaceutical
      products that meet the criteria it has established. Any product candidate the
      Company acquires or licenses may require additional research and development
      efforts prior to commercial sale, including extensive pre-clinical and/or
      clinical testing and approval by the FDA and corresponding foreign regulatory
      authorities. All product candidates are prone to the risks of failure inherent
      in pharmaceutical product development, including the possibility that the
      product candidate will not be safe, non-toxic and effective or approved by
      regulatory authorities. In addition, Auriga cannot assure that any approved
      products that it develops, acquires or licenses will be manufactured or produced
      economically; successfully commercialized; widely accepted in the marketplace
      or
      that Auriga will be able to recover its significant expenditures in connection
      with the development, acquisition or license of such products. In addition,
      proposing, negotiating and implementing an economically viable acquisition
      or
      license is a lengthy and complex process. Other companies, including those
      with
      substantially greater financial, marketing and sales resources, may compete
      with
      Auriga for the acquisition or license of product candidates and approved
      products. Auriga may not be able to acquire the rights to additional product
      candidates and approved products on terms that it finds acceptable, or at all.
      In addition, if Auriga acquires or licenses product candidates from third
      parties, Auriga will be dependent on third parties to supply such products
      to
      Auriga for sale. Auriga could be materially adversely affected by the failure
      or
      inability of such suppliers to meet performance, reliability and quality
      standards. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <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">AURIGA
      MAY ENGAGE IN STRATEGIC TRANSACTIONS THAT FAIL TO ENHANCE STOCKHOLDER VALUE.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; 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">From
      time
      to time, Auriga may consider possible strategic transactions, including the
      potential acquisitions or licensing of products, technologies and companies,
      and
      other alternatives with the goal of maximizing stockholder value. Auriga will
      continue to evaluate potential strategic transactions and alternatives that
      Auriga believes may enhance stockholder value. Auriga may never complete a
      strategic transaction(s) and in the event that Auriga does complete a strategic
      transaction(s), it may not be consummated on terms favorable to Auriga. Further,
      such transactions may impair stockholder value or otherwise adversely affect
      Auriga&#8217;s business. Any such transaction may require Auriga to incur
      non-recurring or other charges and may pose significant integration challenges
      and/or management and business disruptions, any of which could harm Auriga&#8217;s
      results of operation and business prospects.</font></div>
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        </div>
      </div>
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      </div>
    </div>
    <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">AURIGA
      MAY BE EXPOSED TO LITIGATION.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Since
      Auriga will participate in the pharmaceuticals industry, Auriga may be subject
      to liability claims by employees, customers, end users and third parties. Auriga
      intends to have proper insurance in place, however, there can be no assurance
      that any liability insurance Auriga has or purchases will be adequate to cover
      claims asserted against Auriga or that Auriga will be able to maintain such
      insurance in the future. Management believes Auriga intends to adopt or has
      adopted prudent risk management programs to reduce these risks and potential
      liabilities; however, there can be no assurance that such programs if, and
      when
      adopted, will fully protect Auriga. Adverse rulings in any legal matters,
      proceedings and other matters could have a material adverse effect on
      Auriga.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <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">RISK
      OF
      PRODUCT LIABILITY CLAIMS; NO ASSURANCE OF ADEQUATE INSURANCE.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; 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">&#160;Manufacturing,
      marketing, selling, and testing Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>&#174;</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
      and
      Auriga&#8217;s products under development or to be acquired or licensed, entails a
      risk of product liability. The Company could be subject to product liability
      claims in the event that its products or products under development fail to
      perform as intended. Even unsuccessful claims could result in the expenditure
      of
      funds in litigation and the diversion of management time and resources and
      could
      damage the Auriga&#8217;s reputation and impair the marketability of its products.
      While the Company currently maintains liability insurance, the Company may
      not
      be able to maintain such insurance at a commercially reasonable cost. If a
      successful claim were made against the Company, and the amount of insurance
      were
      inadequate to cover the costs of defending against or paying such a claim,
      or
      the damages payable by Auriga, the Company would experience a material adverse
      effect on its business, financial condition, and results of
      operations.</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: 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">AURIGA&#8217;S
      BUSINESS IS HEAVILY REGULATED BY GOVERNMENTAL 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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga
      is
      subject to extensive regulation by the FDA, the Drug Enforcement Administration,
      and state government agencies. The Federal Food, Drug and Cosmetic Act, the
      Controlled Substances Act and other federal statutes and rules regulate the
      testing, manufacture, packaging, labeling, storage, record keeping, promotion,
      distribution, and sale of the Company&#8217;s products. If the Company or its
      manufacturers fail to comply with those regulations, it could become subject
      to
      significant penalties or claims, which could materially and adversely affect
      its
      operating results or its ability to conduct its business. In addition, the
      adoption of new regulations or changes in the interpretations of existing
      regulations may result in significant compliance costs or discontinuation of
      product sales and may adversely affect our revenue and the marketing of Auriga&#8217;s
      products.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      accordance with the Federal Food, Drug and Cosmetic Act and FDA regulations,
      the
      manufacturing processes of the Company&#8217;s third party manufacturers must also
      comply with current good manufacturing practices (&#8220;cGMPs&#8221;). The FDA inspects the
      facilities of the Company&#8217;s third party manufacturers periodically to determine
      if such third party manufacturers are complying with GMPs. The FDA may implement
      additional regulations with which the Company would have to comply, which would
      increase its expenses. </font><br></div>
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        </div>
      </div>
      <div id="HDR">
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      </div>
    </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">Auriga&#8217;s
      business is also subject to regulation under state, federal and local laws,
      rules, regulations, and policies relating to the protection of the environment
      and health and safety, including those governing the use, generation,
      manufacture, storage, air emission, effluent discharge, handling, and disposal
      of certain materials. Auriga believes that it is in compliance in all material
      respects with all such laws, rules, regulations, and policies applicable to
      Auriga. However, non-compliance with such environmental and health and safety
      laws and regulations in the future would require Auriga to incur significant
      costs to comply. Auriga&#8217;s research and development involves the controlled use
      of hazardous materials. Although the Company believes that its safety procedures
      for handling and disposing of such materials comply with the standards
      prescribed by applicable state, federal, and local regulations, the risk of
      contamination or injury from these materials cannot be completely eliminated.
      In
      the event of such contamination or injury, the Company could be held liable
      for
      any damages that result and any such liability could exceed its resources and
      materially adversely affect the Company&#8217;s business, financial condition 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"><br></div>
    <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">AURIGA
      MAY NOT BE ABLE TO OBTAIN MARKETING APPROVAL FOR ANY OF THE PRODUCTS RESULTING
      FROM ITS DEVELOPMENT EFFORTS AND FAILURE TO OBTAIN THESE APPROVALS COULD
      MATERIALLY HARM ITS BUSINESS</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">While
      all
      new medicines must be approved by the FDA before they can be marketed and sold
      in the United States, the FDA has indicated its intent to exercise enforcement
      discretion and not pursue regulatory action against unapproved new medicines
      unless certain conditions occur. If these conditions were to materialize, or
      the
      FDA disagreed with the Company&#8217;s conclusions about the regulatory status of
      these products, the Company might be required to submit an NDA and/or cease
      marketing until the FDA grants approval to do so. Successfully completing
      extensive clinical trials and demonstrating manufacturing capability is
      typically required to obtain FDA approval. Clinical development is expensive,
      uncertain and lengthy, often taking a number of years for a NDA to be filed
      with
      and ultimately approved by the FDA. Of the large number of drugs in development,
      only a small percentage result in the submission of a NDA to the FDA and even
      fewer are approved for commercialization.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#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">Auriga
      may need to successfully address a number of challenges in order to complete
      the
      development of its future products. For example, to obtain marketing approval
      for a new product candidate, the Company and its third party manufacturers
      will
      be required to consistently produce the active pharmaceutical ingredient in
      commercial quantities and of specified quality on a repeated basis. This
      requirement is referred to as process validation. If Auriga is unable to satisfy
      this process validation requirement for a future product candidate, through
      its
      third party manufacturers or otherwise, it will not receive approval to market
      such product. </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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
      In addition, the FDA and other regulatory agencies may apply new standards
      for
      safety, manufacturing, packaging, and distribution of future product candidates.
      Complying with such standards may be time consuming or expensive and could
      result in delays in the Company obtaining marketing approval for future product
      candidates, or possibly preclude it from obtaining such approval. Such a delay
      could also increase Auriga&#8217;s commercialization costs, possibly materially.
</font></div>
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    </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">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
      Furthermore, the Company&#8217;s future products may not be effective or may prove to
      have undesirable or unintended side effects, toxicities or other characteristics
      that may preclude the Company from obtaining regulatory approval or prevent
      or
      limit commercial use. The FDA and other regulatory authorities may not approve
      any product that the Company develops. Even if the Company does obtain
      regulatory approval, such regulatory approvals may be subject to limitations
      on
      the indicated uses for which the Company may market a product, which may limit
      the size of the market for such product. </font></div>
    <div style="DISPLAY: 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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">OTHER
      COMPANIES MAY CLAIM THAT AURIGA INFRINGED UPON THEIR INTELLECTUAL PROPERTY
      OR
      PROPRIETARY RIGHTS.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga
      does not believe that its products or processes violate third party intellectual
      property rights. Nevertheless, there is no guarantee that such rights are not
      being, and will not be, violated. If any of the products or processes are found
      to violate third party intellectual property rights, Auriga may be required
      to
      re-engineer or cause to be re-engineered one or more of those products or
      processes or seek to obtain licenses from third parties to continue offering
      its
      products or processes without substantial re-engineering, and such efforts
      may
      not be successful.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      addition, future patents may be issued to third parties upon which Auriga's
      technology may infringe. Auriga may incur substantial costs in defending against
      claims under any such patents. Furthermore, parties making such claims may
      be
      able to obtain injunctive or other equitable relief, which effectively could
      block Auriga's ability to further develop or commercialize some or all of its
      products in the U.S. or overseas and could result in the award of substantial
      damages against Auriga. In the event of a claim of infringement, Auriga may
      be
      required to obtain one or more licenses from third parties. There can be no
      assurance that the Company will be able to obtain such licenses at a reasonable
      cost, if at all. Defense of any lawsuit or failure to obtain any such license
      could have a material adverse effect on Auriga.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <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">SUCCESS
      DEPENDS ON AURIGA&#8217;S ABILITY TO PROTECT ITS PROPRIETARY TECHNOLOGY.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga's
      success depends, to a significant degree, upon the protection of its, and that
      of its licensors' proprietary technologies. Legal fees and other expenses
      necessary to obtain and maintain appropriate patent protection could be
      material. Insufficient funding may inhibit the ability of Auriga to obtain
      and
      maintain such protection. Additionally, if Auriga must resort to legal
      proceedings to enforce its intellectual property rights, the proceedings could
      be burdensome and expensive and could involve a high degree of risk to its
      proprietary rights if it is unsuccessful in, or cannot afford to pursue, such
      proceedings.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga
      has filed patent applications covering technologies pertaining to extended
      release formulations. The Company is aware that certain European and U.S.
      patents have been issued with claims covering products that contain certain
      extended release formulations. It may be argued that certain or all of the
      Company&#8217;s products under development may use a formulation covered by such
      European or U.S. patents. If that is shown to be the case, the Company would
      be
      prevented from making, using or selling such products unless Auriga obtains
      a
      license under such patents, which license may not be available on commercially
      reasonable terms, or at all, or unless such patents are determined to be invalid
      in Europe or invalid or unenforceable in the United States. The Company&#8217;s
      development of products that may be covered by such patents and its failure
      to
      obtain licenses under such patents in the event such patents are determined
      to
      be valid and enforceable could have an adverse effect on the Company&#8217;s
      business.</font></div>
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      </div>
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    </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">Auriga
      also relies on trade secrets and contract law to protect certain of its
      proprietary technology. There can be no assurance that any such contract will
      not be breached, or that if breached, it will have adequate remedies.
      Furthermore, there can be no assurance that any of Auriga's trade secrets will
      not become known or independently discovered by third parties.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">There
      can
      be no assurance that others will not independently develop substantially
      equivalent proprietary information and techniques or otherwise gain access
      to
      Auriga's trade secrets and know-how. In addition, Auriga may be required to
      obtain licenses to patents or other proprietary rights from third parties.
      There
      can be no assurance that any licenses required under any patents or proprietary
      rights would be made available on acceptable terms, if at all. If Auriga does
      not obtain required licenses, it may encounter delays in product development
      or
      find that the development, manufacture or sale of products requiring such
      licenses could be foreclosed. Additionally, it may, from time to time, support
      and collaborate in research conducted by universities and governmental research
      organizations. There can be no assurance that the Company will have or be able
      to acquire exclusive rights to the inventions or technical information derived
      from such collaborations, or that disputes will not arise with respect to rights
      in derivative or related research programs conducted by Auriga or collaborators.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Because
      the patent positions of pharmaceutical and biotechnology companies are highly
      uncertain and involve complex legal and factual questions, any patents owned
      and
      licensed by Auriga, or any future patents, may not prevent other companies
      from
      developing competing products or ensure that others will not be issued patents
      that may prevent the sale of the Company&#8217;s products or require licensing and the
      payment of significant fees or royalties. Furthermore, to the extent that
      (1)&#160;any of the Company&#8217;s future products or methods are not patentable,
      (2)&#160;such products or methods infringe upon the patents of third parties, or
      (3)&#160;the Company&#8217;s patents or future patents fail to give Auriga an
      exclusive position in the subject matter to which those patents relate, the
      Company will be adversely affected. The Company may be unable to avoid
      infringement of third party patents and may have to obtain a license, or defend
      an infringement action and challenge the validity of the patents in court.
      A
      license may be unavailable on terms and conditions acceptable to the Company,
      if
      at all. Patent litigation is costly and time consuming, and the Company may
      be
      unable to prevail in any such patent litigation or devote sufficient resources
      to even pursue such litigation. If the Company does not obtain a license under
      such patents, or if it is found liable for infringement and if it is not able
      to
      have such patents declared invalid, the Company may be liable for significant
      money damages, may encounter significant delays in bringing products to market,
      or may be precluded from participating in the manufacture, use, or sale of
      products or methods of treatment requiring such licenses.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <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">FAILURE
      TO IMPLEMENT NEW TECHNOLOGIES.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga's
      future growth is partially tied to its ability to improve its knowledge and
      implementation of pharmaceutical technologies. Inability to successfully
      implement commercially viable pharmaceutical technologies in response to market
      conditions in a manner that is responsive to its customers' requirements could
      have a material adverse effect on Auriga. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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      </div>
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      </div>
    </div>
    <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">DEPENDENCE
      ON SINGLE SOURCES OF SUPPLY.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company&#8217;s products are currently sourced from single qualified suppliers or
      manufacturers. The Company has not established arrangements with alternative
      suppliers for these ingredients or from alternative manufacturers for the
      manufacture of the Company&#8217;s products. Any interruption of raw material supply,
      for any reason, in (i) any of the required ingredients for the Company&#8217;s
      products or (ii) the manufacture of the product, could have a material adverse
      effect on Auriga&#8217;s ability to manufacture its products or to obtain or maintain
      regulatory approval of such products. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">RISK
      RELATED TO COMMON STOCK </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">THE
      COMPANY&#8217;S COMMON STOCK IS THINLY TRADED AND STOCKHOLDERS MAY NOT BE ABLE TO
      LIQUIDATE THEIR INVESTMENT AT ALL, OR MAY ONLY BE ABLE TO LIQUIDATE THE
      INVESTMENT AT A PRICE LESS THAN THE COMPANY&#8217;S VALUE. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company&#8217;s common stock is very thinly traded, and the price if traded may not
      reflect the value of the Company. Consequently, investors may not be able to
      liquidate their investment at all, or if they are able to liquidate it may
      only
      be at a price that does not reflect the value of the business. Even if a more
      active market should develop, the price may be highly volatile. Because the
      price for the Company&#8217;s common stock is low, many brokerage firms may not be
      willing to effect transactions in the securities. Even if an investor finds
      a
      broker willing to effect a transaction in the Company&#8217;s common stock, the
      combination of brokerage commissions, transfer fees, taxes, if any, and any
      other selling costs may exceed the selling price. Further, many lending
      institutions will not permit the use of the Company&#8217;s common stock as collateral
      for any loans.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company does not qualify or meet the requirements for the listing and/or
      quotation of the Company&#8217;s common stock on the NASDAQ SmallCap and the American
      Stock Exchange. If the Company determines that it would like to pursue such
      listing and attempt to meet the listing standards, in order to achieve the
      minimum required price per share, the Company would have to effect a reverse
      stock split which could reduce the overall value of your investment.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <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">THE
      COMPANY&#8217;S COMMON STOCK HAS NOT BEEN ACTIVELY TRADED ON A PUBLIC MARKET.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
      a
      number of years the Company&#8217;s common stock has traded only on a limited basis.
      Therefore, it is not certain whether investor interest in the Company&#8217;s common
      stock will be sufficient to create or sustain an active public trading market.
      If an active public trading market for shares of the Company&#8217;s common stock does
      not develop, investors and the other recipients of the common stock underlying
      the Series A convertible preferred stock issued in the Merger transaction may
      have limited liquidity and may be forced to hold their shares for an indefinite
      period of time. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
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      </div>
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        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">THE
      OUTSTANDING SERIES A CONVERTIBLE PREFERRED STOCK ISSUED IN THE MERGER
      TRANSACTION AND THE COMMON STOCK UNDERLYING SUCH PREFERRED STOCK WILL BE
&#8220;RESTRICTED SECURITIES&#8221; AND MAY NOT BE RESOLD UNLESS THEY ARE REGISTERED UNDER
      THE SECURITIES ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      shares of Series A convertible preferred stock are, and the common stock
      underlying such preferred shares will be, &#8220;restricted securities&#8221; as such term
      is defined in Rule 144 under the Securities Act. Accordingly, they may not
      be
      resold unless they are registered under the Securities Act and applicable state
      securities laws or unless exemptions from such registration requirements are
      available. Any such exemption must be established to the Company&#8217; satisfaction.
      Certain holders of the Company&#8217;s common stock have registration rights. If the
      Company files a registration statement to register the common stock underlying
      such preferred shares, the shares of common stock having registration rights
      or
      newly issued securities of the Company in the future, there is no guarantee
      that
      the SEC will permit such registration to become effective or that it will be
      effective when a holder of common stock elects to sell the shares of common
      stock. Any inability to sell may affect the ultimate realizable value of the
      common stock.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">BECAUSE
      THE COMPANY IS SUBJECT TO THE PENNY STOCK RULES SALE OF THE COMPANY&#8217;S COMMON
      STOCK BY INVESTORS MAY BE DIFFICULT. </font><a name="HIT1"/></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company is subject to the SEC's &#8220;penny stock&#8221; rules.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      Penny
      stocks generally are equity securities</font><a name="HIT3"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      with a
      price of less than $5.00. The penny stock rules require </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">broker-dealers
      to deliver a standardized risk disclosure document prepared by the SEC which
      provides information about penny stocks and the nature and level</font></a><a name="HIT4"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      of risks
      in the penny stock market. The broker-dealer must also provide the</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></a><a name="HIT5"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">customer
      with current bid and offer quotations for the penny stock, the</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      compensation of the broker-dealer and its salesperson, and monthly account
      </font></a><a name="HIT6"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">statements
      showing the market value of each penny stock held in the customer's</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      account.
      The bid and offer quotations, and the broker-dealer and salesperson compensation
      information must be given to the customer orally or in writing prior to
      completing the transaction and must be given to the customer in writing before
      or with the customer's confirmation.</font></a><a name="HIT7"/></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      addition, the penny stock rules require that prior to a transaction, the broker
      and/or dealer must make a special written determination that the penny
      stock</font><a name="HIT8"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      is a
      suitable investment for the purchaser and receive the</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      purchaser's written agreement to the transaction.</font></a><a name="HIT9"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      The
      penny stock rules are burdensome and may reduce purchases of any</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      offerings and reduce the trading activity for the Company&#8217;s common stock. As
      long as the Company&#8217;s common stock </font></a><a name="HIT10"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">is
      subject to the penny stock rules, the holders of such common</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      stock
      may find it more difficult to sell their securities. </font></a></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
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        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">THE
      COMPANY&#8217;S COMMON STOCK PRICES COULD DECREASE IF A SUBSTANTIAL NUMBER OF SHARES
      ARE SOLD UNDER RULE 144.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
      substantial majority of the Company&#8217;s outstanding shares of common stock are
      "restricted securities" within the meaning of Rule 144 under the Securities
      Act.
      As restricted shares, these shares may be resold only pursuant to an effective
      registration statement or under the requirements of Rule 144 or other applicable
      exemption from registration under the Act and as required under applicable
      state
      securities laws. Rule 144 provides in essence that a person who has held
      restricted securities for a period of at least one year may, under certain
      conditions, sell every three months, in brokerage transactions, a number of
      shares that does not exceed the greater of 1.0% of the Company&#8217;s outstanding
      common stock or the average weekly trading volume during the four calendar
      weeks
      prior to the sale. There is no limit on the amount of restricted securities
      that
      may be sold by a non-affiliate after the restricted securities have been held
      by
      the owner for a period of two years or more. If a substantial number of shares
      of the Company&#8217;s common stock are sold under Rule 144 or other exemption, it
      could cause the price the Company&#8217;s common stock to go down.</font></div>
    <div style="DISPLAY: 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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">THE
      COMPANY&#8217;S PRINCIPAL STOCKHOLDERS HAVE THE ABILITY TO EXERT SIGNIFICANT CONTROL
      IN MATTERS REQUIRING STOCKHOLDER VOTE AND COULD DELAY, DETER OR PREVENT A CHANGE
      IN CONTROL OF THE COMPANY.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Philip
      S.
      Pesin owns approximately 29% of the Company&#8217;s outstanding common stock (upon
      conversion of the Series A convertible preferred stock) and will be able to
      assert significant influence over the election of directors and other matters
      presented for a vote of stockholders. In addition, assuming the Company
      reincorporates in Delaware as planned, Delaware corporate law provides that
      certain actions may be taken by consent action of stockholders holding a
      majority of the outstanding shares. In the event that the requisite approval
      of
      stockholders is obtained, dissenting or non-participating stockholders generally
      would be bound by such vote. Through this concentration of voting power, Mr.
      Pesin could delay, deter or prevent a change in control of the Company or other
      business combinations that might otherwise be beneficial to the Company&#8217;s other
      stockholders. In deciding how to vote on such matters, Mr. Pesin may be
      influenced by interests that conflict with yours. You should not buy the
      Company&#8217;s common stock unless you are willing to entrust all aspects of
      operational control to the Company's current management team.</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: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">THE
      CONVERSION OF OUTSTANDING DERIVATIVE SECURITIES COULD CAUSE YOUR OWNERSHIP
      IN
      THE COMPANY TO BE DILUTED AND MAY DECREASE 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="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Outstanding
      derivative securities and current and future obligations to issue the Company's
      securities to various parties may dilute the value of your investment.
      Immediately after the closing of the Merger, the Company will have options
      and
      warrants outstanding to purchase approximately 14,563,283 shares of its common
      stock at prices ranging from $0.42 to $1.24 per share. For the length of time
      these warrants and options are outstanding, the holders thereof will have an
      opportunity to profit from a rise in the market price of the Company&#8217;s common
      stock without assuming the risks of ownership. This may have an adverse effect
      on the terms upon which the Company can obtain additional capital. It should
      be
      expected that the holders of such derivative securities would exercise or
      convert them at a time when the Company would be able to obtain equity capital
      on terms more favorable than the exercise or conversion prices provided by
      the
      warrants or options. There are no preemptive rights in connection with the
      Company&#8217;s common stock. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        </div>
      </div>
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        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">THE
      COMPANY DOES NOT INTEND TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company does not intend to pay any dividends in the foreseeable future. The
      Company does not plan on making any cash distributions in the manner of a
      dividend or otherwise. The Company&#8217;s board of directors presently intends to
      follow a policy of retaining earnings, if any. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">THE
      COMPANY HAS THE RIGHT TO ISSUE ADDITIONAL COMMON STOCK AND PREFERRED STOCK
      WITHOUT THE CONSENT OF SHAREHOLDERS. THIS WOULD HAVE THE EFFECT OF DILUTING
      YOUR
      OWNERSHIP IN THE COMPANY AND COULD DECREASE THE VALUE OF YOUR
      STOCK.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Following
      the planned reverse stock split and the automatic conversion of the Series
      A
      Preferred Stock, there will be additional authorized but unissued shares of
      the
      Company&#8217;s common stock that may be later issued by the Company&#8217;s management for
      any purpose without the consent or vote of the stockholders that would dilute
      a
      stockholder's percentage ownership of the Company.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      addition, the Company&#8217;s articles of incorporation authorize the issuance of
      shares of preferred stock, the rights, preferences, designations and limitations
      of which may be set by the board of directors. The articles of incorporation
      have authorized issuance of up to 5,000,000 shares of preferred stock in the
      discretion of the board of directors, of which 1,200,000 shares have been
      designated as Series A convertible stock. The remaining 3,800,000 shares of
      authorized but undesignated preferred stock may be issued upon filing of amended
      Articles of Incorporation and the payment of required fees; no further
      shareholder action is required. If issued, the rights, preferences, designations
      and limitations of such preferred stock would be set by the board of directors
      and could operate to the disadvantage of the outstanding common stock. Such
      terms could include, among others, preferences as to dividends and distributions
      on liquidation. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">IT
      IS
      POSSIBLE THAT THERE ARE CLAIMS OF WHICH THE COMPANY IS UNAWARE THAT MAY COME
      TO
      LIGHT IN THE FUTURE AND COST THE COMPANY CONSIDERABLE TIME, EFFORT AND EXPENSE
      TO RESOLVE. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Although
      Multi-Link Telecommunications, Inc. has not been operational for several years
      prior to the acquisition of Auriga, it is possible that a claim, whether
      colorable or not, may be asserted against the Company in the future with respect
      to matters arising prior to the Merger. There can be no assurance given that
      some person will not devise a claim and attempt to assert it against the Company
      in the hopes of obtaining some monetary benefit. To resolve such a claim,
      including payment, may cost the Company considerable time, effort and expense.
      Any of these may impair management&#8217;s implementation of the business plan
      concerning the Company with the consequence of a loss of opportunity.
</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: ">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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">MANAGEMENT'S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION</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"><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
      references to the &#8220;Company,&#8221; &#8220;we,&#8221; &#8220;our,&#8221; and &#8220;us&#8221; for periods prior to and
      subsequent to the closing of the Merger refer to Auriga Laboratories and its
      subsidiaries.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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
      FOLLOWING DISCUSSION SHOULD BE READ TOGETHER WITH THE INFORMATION CONTAINED
      IN
      THE FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED ELSEWHERE IN THIS CURRENT
      REPORT ON FORM 8-K.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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>Overview</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="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company was formed as a Delaware corporation in April 12, 2005 as part of a
      reorganization transaction involving several companies owned by the founders
      and
      is authorized to issue 50,000,000 shares of $0.0001 par value common stock.
      As
      part of the reorganization transaction, Tryon Labs, Inc. changed its name to
      Auriga Development, Inc. and operates as a wholly-owned subsidiary engaged
      in
      drug development. Auriga Pharmaceuticals, LLC also became a wholly-owned
      subsidiary of Auriga, and is engaged in the sales and marketing of Company
      products. </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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      are a
      specialty pharmaceutical company with stand-alone sales, marketing, and
      development capabilities. The Company currently markets the Extendryl&#174; family of
      products with a forty-person sales force. We plan to become a fully integrated
      pharmaceutical company by acquiring manufacturing and development capabilities.
      We also seek to acquire and/or in-license additional products and technologies.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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"><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>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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">From
      April 12, 2005 (Date of Inception) to March 31, 2006</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SALES</font></div>
            </td>
            <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="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="21%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,350,120</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="75%" 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">Less
                returns and allowances</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="21%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">753,247
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc;">&#160;</td>
            <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="21%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="75%" 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
                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="21%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,596,873
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc 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
                OF GOODS SOLD</font></div>
            </td>
            <td width="2%" style="border-bottom: #ccffcc 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="21%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,626,488
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="75%" 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="21%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; 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</font></div>
            </td>
            <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="21%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,970,385
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="75%" 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="21%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; 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: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="21%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,064,332
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="75%" 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="21%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; 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: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="21%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,093,947</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><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="75%" 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="21%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc 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
                EXPENSES</font></div>
            </td>
            <td width="2%" style="border-bottom: #ccffcc 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="21%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,056,106
                </font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="75%" 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="21%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc 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: #ccffcc thin 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="21%" 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">(3,150,053</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><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"><br></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 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>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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga
      incurred a net loss of $3,150,053 for the period from inception through March
      31, 2006. This loss represents a loss from operations of $1,093,947, before
      Other Expenses of $2,056,106. The Company&#8217;s net loss occurred primarily as a
      result of operating expenses and costs related to the start up of operations,
      and noncash financing expenses of $1,986,592 attributed to the exercise of
      a
      warrant, which is included in Other Expenses. </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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga
      had net sales of $6,596,873 for the period from inception through March 31,
      2006. The Company&#8217;s management expects that sales will increase in the year
      ended March 31, 2007, although the rate of this increase will depend on the
      success of the of the Company&#8217;s existing product line as well as additional
      products it plans to add to the overall Company product mix. </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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga&#8217;s
      gross profit for the period from inception (April 12, 2005) through March 31,
      2006 was $3,970,385, and its gross margin was 60%. The Company&#8217;s management
      anticipates that Auriga will continue to experience similar levels of gross
      margin as management seeks out manufacturers, product lines, and suppliers
      with
      competitive pricing for quality products. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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>Operating
      Expenses</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"><em>Sales
      and Marketing Expenses</em></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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 id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sales
      and
      marketing expenses consist primarily of salaries and benefits, drug samples,
      market research data, promotions, advertising, consulting fees, and market
      data
      analysis. We expect to continue to increase marketing and development efforts
      in
      the future and as a result expect this class of expenses to continue to
      increase. </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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>General
      and Administrative Expenses</em></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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
      general and administrative expenses consist primarily of salaries and benefits
      for employees, fees to our professional advisors, rent, and other general
      operating costs. Based on our plans for future growth, we expect our general
      and
      administrative costs are likely to increase significantly.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
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    <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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Research
      and Development Expenses</em></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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
      research and development expenses consist primarily of salaries and benefits
      for
      research and development employees and payments to independent contractors.
      Expenses in this area are likely to increase significantly as the Company
      develops new and existing products and technologies. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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
      INDUSTRY</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">The
      pharmaceutical industry has experienced significant growth over the past several
      years. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">IMS
      Health (&#8220;IMS&#8221;), the world's leading provider of market intelligence to the
      pharmaceutical and healthcare industries,</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      reports
      that the total U.S. prescription drug market was approximately $234 billion
      in
      2004. For the ten years to 2004, the compounded annual growth rate (CAGR) in
      sales was 13.0% and CAGR is expected to be 7%-10% between
      2005-2009.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">The
      industry is undergoing a period of consolidation. It is estimated that during
      the years 2001-2005 branded products with estimated 2001 sales in excess of
      $35
      billion will lose patent protection and that in 2006 alone the figure is
      expected to be in the $20 billion range. To replace these revenues and lessen
      their dependence on internal development programs, the large pharmaceutical
      companies are increasingly entering into strategic licensing arrangements with
      specialty pharmaceutical companies with valuable research and development
      programs and technologies. They are also developing strategies to defend
      themselves against generic competition through innovative approaches to
      extension brand life-cycles, exclusivity period and product
      differentiation.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga
      plans to capitalize on these changes by acquiring well known and highly written
      brand names that have become less valuable to larger companies and combining
      them with new drug approvals that are designed to provide periods of market
      exclusivity.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">PHARMACEUTICAL
      DEVELOPMENT</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
      than the products that are exempted from the formal approval process by the
      &#8220;DESI&#8221; regime as defined below, the Company will be required by the FDA to
      comply with NDA procedures for its branded products prior to commencement of
      marketing by it, or its licensees. New drug compounds and new formulations
      for
      existing drug compounds which cannot be filed as ANDAs are subject to NDA
      procedures. These procedures include (1)&#160;preclinical laboratory and animal
      toxicology tests; (2)&#160;scaling and testing of production batches;
      (3)&#160;submission of an Investigational New&#160;Drug Application ("IND"), and
      subsequent approval is required before any human clinical trials can commence;
      (4)&#160;adequate and well controlled replicate human clinical trials to
      establish the safety and efficacy of the drug for its intended indication;
      (5)&#160;the submission of an NDA to the FDA; and (6)&#160;FDA approval of an
      NDA prior to any commercial sale or shipment of the product, including
      pre-approval and post-approval inspections of its manufacturing and testing
      facilities. If all of this data in the product application is owned by the
      applicant, the FDA will issue its approval without regard to patent rights
      that
      might be infringed or exclusivity periods that would affect the FDA's ability
      to
      grant an approval if the application relied upon data which the applicant did
      not own. The Company intends to generate all data necessary to support FDA
      approval of the applications it&#160;files. </font></div>
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    <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">Preclinical
      laboratory and animal toxicology tests must be performed to assess the safety
      and potential efficacy of the product. The results of these preclinical tests,
      together with information regarding the methods of manufacture of the products
      and quality control testing, are then submitted to the FDA as part of an IND
      requesting authorization to initiate human clinical trials. Once the IND notice
      period has expired, clinical trials may be initiated, unless a hold on clinical
      trials has been issued by the FDA. </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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Clinical
      trials involve the administration of a pharmaceutical product to individuals
      under the supervision of qualified medical investigators that are experienced
      in
      conducting studies under "Good Clinical Practise" guidelines. Clinical studies
      are conducted in accordance with protocols that detail the objectives of a
      study, the parameters to be used to monitor safety and the efficacy criteria
      to
      be evaluated. Each protocol is submitted to the FDA and to an Institutional
      Review Board prior to the commencement of each clinical trial. Clinical studies
      are typically conducted in three sequential phases, which may overlap. In
      Phase&#160;I, the initial introduction of the </font><a name="page_cg1616_1_33"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">product
      into human subjects, the compound is tested for absorption, safety, dosage,
      tolerance, metabolic interaction, distribution, and excretion. Phase&#160;II
      involves studies in a limited patient population with the disease to be treated
      to (1)&#160;determine the efficacy of the product for specific targeted
      indications, (2)&#160;determine optimal dosage and (3)&#160;identify possible
      adverse effects and safety risks. In the event Phase&#160;II evaluations
      demonstrate that a pharmaceutical product is effective and has an acceptable
      safety profile, Phase&#160;III clinical trials are undertaken to further
      evaluate clinical efficacy of the product and to further test its safety within
      an expanded patient population at geographically dispersed clinical study sites.
      Periodic reports on the clinical investigations are required. We, or the FDA,
      may suspend clinical trials at any time if either party believes the clinical
      subjects are being exposed to unacceptable health risks. The results of the
      product development, analytical laboratory studies and clinical studies are
      submitted to the FDA as part of an NDA for approval of the marketing and
      commercialization of a pharmaceutical product. </font></a></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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      above-described NDA procedures are premised on the applicant being the owner
      of,
      or having obtained a right of reference to, all of the data required to prove
      safety and efficacy. These NDAs are governed by 21&#160;U.S.C. &#167;&#160;355(b)(1),
      also known as Section&#160;505(b)(1) of the FDC&#160;Act. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">ABBREVIATED
      NEW DRUG APPLICATION</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>&#160;</em></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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      certain cases, where the objective is to develop a generic version of an
      approved product already on the market in controlled-release dosages, an ANDA
      may be filed in lieu of filing an NDA. Under the ANDA procedure, the FDA waives
      the requirement to submit complete reports of preclinical and clinical studies
      of safety and efficacy and instead requires the submission of bioequivalency
      data, that is, demonstration that the generic drug produces the same effect
      in
      the body as its brand-name counterpart and has the same pharmacokinetic profile,
      or change in blood concentration over time. The ANDA procedure would be
      available to us for a generic version of a drug product approved by the FDA.
      In
      certain cases, an ANDA applicant may submit a suitability petition to the FDA
      requesting permission to submit an ANDA for a drug product that differs from
      a
      previously approved reference drug product (the "Listed Drug") when the change
      is one authorized by statute. Permitted variations from the Listed Drug include
      changes in: (1)&#160;route of administration, (2)&#160;dosage form,
      (3)&#160;strength and (4)&#160;one of the active ingredients of the Listed Drug
      when the Listed Drug is a combination product. The FDA must approve the petition
      before the ANDA may be submitted. An applicant is not permitted to petition
      for
      any other kinds of changes from listed drugs. The information in a suitability
      petition must demonstrate that the change from the Listed Drug requested for
      the
      proposed drug product may be adequately evaluated for approval without data
      from
      investigations to show the proposed drug product's safety or effectiveness.
      The
      advantages of an ANDA over an NDA include reduced research and development
      costs
      associated with bringing a product to market, and generally a shorter review
      and
      approval time at the FDA. </font></div>
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    </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">PATENT
      CERTIFICATION AND EXCLUSIVITY ISSUES</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ANDAs
      are
      required to include certifications with respect to any patents that claim the
      Listed Drug or that claim a use for the Listed Drug for which the applicant
      is
      seeking approval. If applicable patents are in effect and this information
      has
      been submitted to the FDA, the FDA must delay approval of the ANDA until the
      patents expire. If the applicant believes it will not infringe the patents,
      it
      can make a patent certification to the holder of patents on the drug for which
      a
      generic drug approval is being sought, which may result in patent infringement
      litigation which could delay the FDA approval of the ANDA for up to
      30&#160;months. If the drug product covered by an ANDA were to be found by a
      court to infringe another company's patents, approval of the ANDA could be
      delayed until the patents expire. Under the FDC Act, the first filer of an
      ANDA
      with a "non-infringement" certification is entitled to receive 180&#160;days of
      market exclusivity. Subsequent filers of generic products would be entitled
      to
      market their approved product six months after the earlier of the first
      commercial marketing of the first filer's generic product or a successful
      defense of a patent infringement suit. </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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Patent
      expiration refers to expiry of U.S.&#160;patents (inclusive of any extensions)
      on drug compounds, formulations and uses. Patents outside the United&#160;States
      may differ from those in the United&#160;States. Under U.S.&#160;law, the
      expiration of a patent on a drug compound does not create a right to make,
      use
      or sell that compound. There may be additional patents relating to a person's
      proposed manufacture, use or sale of a product that could potentially prohibit
      such person's proposed commercialization of a drug compound. </font><a name="page_cg1616_1_34"/></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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      FDC
      Act contains non-patent market exclusivity provisions that offer additional
      protection to pioneer drug products and are independent of any patent coverage
      that might also apply. Exclusivity refers to the fact that the effective date
      of
      approval of a potential competitor's ANDA to copy the pioneer drug may be
      delayed or, in certain cases, an ANDA may not be submitted until the exclusivity
      period expires. Five years of exclusivity are granted to the first approval
      of a
      "new chemical entity." Three years of exclusivity may apply to products which
      are not new chemical entities, but for which new clinical investigations are
      essential to the approval. For example, a new indication for use, or a new
      dosage strength of a previously-approved product, may be entitled to
      exclusivity, but only with respect to that indication or dosage strength.
      Exclusivity only offers protection against a competitor entering the market
      via
      the ANDA route, and does not operate against a competitor that generates all
      of
      its own data and submits a full NDA under Section&#160;505(b)(1) of the
      FDC&#160;Act. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
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        </div>
      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">31</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
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        </div>
      </div>
    </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">If
      applicable regulatory criteria are not satisfied, the FDA may deny approval
      of
      an NDA or an ANDA or may require additional testing. Product approvals may
      be
      withdrawn if compliance with regulatory standards is not maintained or if
      problems occur after the product reaches the market. The FDA may require further
      testing and surveillance programs to monitor the pharmaceutical product that
      has
      been commercialized. Noncompliance with applicable requirements can result
      in
      additional penalties, including product seizures, injunction actions and
      criminal prosecutions.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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">ABOUT
      DESI DRUGS</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Currently,
      an FDA program allows the Company, in its opinion, to manufacture and market
      its
      current Extendryl&#174; products, without going through the formal approval process
      of submitting an NDA with safety and efficacy data. The Company believes its
      current Extendryl&#174; products are governed by a special regime established by a
      string of legislation spanning from 1938 through 1984 and administrative
      guidance as recent as 2003. Prior to 1938, drugs could be marketed in the U.S.
      as long as a drug&#8217;s label did not present false information regarding the drug&#8217;s
      strength and purity. The Federal Food, Drug and Cosmetic Act of 1938 (the &#8220;Act&#8221;)
      required the manufacturer to prove the safety of a drug before introducing
      it to
      the market. In 1962, the Act was amended to further require the manufacturer
      to
      prove new drugs were effective as well. The U.S. Food and Drug Administration
      (&#8220;FDA&#8221;) then undertook a Drug Efficacy Study Implementation program (&#8220;DESI&#8221;) for
      all drugs approved between 1938 and 1962, allowing these drugs to remain on
      the
      market while evidence of their effectiveness was reviewed. These pre-1962 drugs
      are commonly referred to as DESI Drugs. While the FDA may consider Auriga&#8217;s
      products to be new drugs, it has indicated its intent to exercise enforcement
      discretion and not pursue regulatory action for DESI drugs, such as Auriga&#8217;s
      Extendryl&#174; products, unless certain conditions occur. If these conditions were
      to materialize, or the FDA disagreed with Auriga&#8217;s conclusions about the
      regulatory status of these products, Auriga might be required to submit an
      NDA
      and/or cease marketing until the FDA grants approval to do so.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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 id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      January 2003, the FDA published an OTC Monograph, to establish guidelines for
      many of the DESI Drugs that still exist in the marketplace. As a result, many
      manufacturers are seeking to divest of these products. The Company&#8217;s strategy to
      maximize the remaining value is to reformulate the acquired drugs, then market
      the reformulated drugs under the same historical brand name. The reformulations
      involve changes in the active ingredients, while maintaining the safety and
      efficacy in treating the indicated conditions. As a &#8220;new and improved&#8221; version
      of the drug, existing generic substitutes are no longer able to claim generic
      equivalency, therefore obligating pharmacists to dispense the name brand for
      each prescription filled. FDA guidelines for DESI Drugs do not require any
      formal approval process for these reformulations as long as all ingredients
      are
      among those included on an FDA list as both safe and effective. The Draft
      Guidance set forth by FDA allows for the filing of an NDA for a DESI class
      of
      drugs. In accordance with the draft policy guidance, FDA plans to grant a period
      of exclusivity for Company&#8217;s who obtain NDAs for DESI drugs. This could provide
      a significant opportunity for the Company to eliminate competition and generic
      substitution on many of its historical products.</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">
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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      </div>
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        </div>
      </div>
    </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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">PHARMACEUTICAL
      SALES AND MARKETING</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      U.S.
      market for prescription cough and cold products was approximately $1.3 billion
      in 2004 according to National Sales Perspectives, a report produced by
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">IMS
      Health, the world's leading provider of market intelligence to the
      pharmaceutical and healthcare industries</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      The
      U.S. retail market for OTC cough, cold, allergy, and sinus products is
      approximately $2.6 billion according to Information Resources, Inc. in that
      same
      year. We believe our initial four products combined with the 4 line extensions
      will compete in many of the segments of this combined market that total
      approximately $3.9 billion. In 2005, according to IMS National Prescription
      Audit, the volume of prescriptions in the cough/cold market grew 9.5% from
      72.3
      million in 2004 to 79.2 million total prescriptions in 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 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">BUSINESS
      STRATEGY</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      Auriga
      seeks to become a fully integrated pharmaceutical company, it will need to
      partner with or acquire companies with stand alone manufacturing and development
      capabilities. In addition, Auriga will seek to partner with or acquire companies
      with complimentary product lines and technologies.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      marketing its products, Auriga currently uses three strategies to be successful:
      (1) the creation of a&#160;focused product portfolio using its proprietary
      process for selecting appropriate drugs for development, (2) use of experienced
      Product Development Teams to drive development, and (3) use of the most
      effective sales and marketing strategies appropriate to each product
      opportunity.&#160; This approach uses resources available to the Company and
      does not require the use of a large fixed sales force.&#160; The Company
      currently anticipates that internal marketing efforts will be aimed at driving
      products into the national formularies of pharmaceutical benefit managers and
      drug store chains, while external efforts will lever specialist sales
      organizations that market directly to physicians.&#160; The marketing acumen and
      support of both large and small pharmaceutical companies will also be leveraged
      through partnerships with these organizations.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
      key
      strategy for the development of improved formulations of approved drugs will
      be
      the use of drug delivery technologies and regulatory exclusivity. These
      reformulated drugs can offer improved efficacy, reduced side effects, reduced
      dosing frequency, and improved patient compliance.&#160; In addition, new
      technologies can facilitate the development of drugs that are difficult to
      formulate as well as new drug combinations (two or more drugs in a single
      tablet).&#160; Through its unique network and alliances in the drug delivery
      field, Auriga has gained access to several proprietary oral delivery
      technologies that will be used to create differentiated products.&#160; Each of
      the technologies chosen for this development strategy will involve products
      that, in most cases, have already received FDA approval.&#160; In addition,
      Auriga anticipates that each technology will be protected by patents covering
      composition of matter and use so that Auriga can develop a strong proprietary
      position for products in the marketplace in addition to market exclusivities
      obtained from regulatory approvals.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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        </div>
      </div>
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        </div>
      </div>
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        </div>
      </div>
    </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">MANUFACTURING</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company&#8217;s strategy is to initially outsource its manufacturing, packaging and
      distribution functions to produce and package its products in order to achieve
      growth without incurring large capital outlays. Once Auriga achieves certain
      revenue and profitability milestones, it will seek to bring these functions
      in-house through acquisition or partnering. In that regard, the Company intends
      to engage third party contractors (primarily large pharmaceutical companies)
      to
      manufacture its products. The Company believes that in those instances where
      it
      acquires the rights to approved products from another pharmaceutical company,
      the selling or licensing company will agree to manufacture the Company&#8217;s
      requirements of the products (or to assign rights from pre-existing arrangements
      with respect to manufacturing) for a specified period of time. The following
      table lists the current products Auriga manufactures and which contract
      manufacturing partner is utilized for each of these products:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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      </div>
    </div>
    <div align="left">
      <table border="0" bordercolor="#000000" cellpadding="3" cellspacing="0" width="100%">

          <tr>
            <td colspan="7" valign="bottom" width="90%" style="border-bottom: black thin solid;">&#160;</td>
          </tr>
          <tr>
            <td colspan="7" valign="bottom" 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="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>Product
                Information</strong></font></div>
            </td>
          </tr>
          <tr>
            <td colspan="7" valign="bottom" width="90%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
            </td>
          </tr>
          <tr>
            <td colspan="2" valign="bottom" width="44%" 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
                Description</strong></font></div>
            </td>
            <td 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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NDC#</strong></font></div>
            </td>
            <td 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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Bottle
                </strong></font></div>
            </td>
            <td valign="bottom" width="9%" 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>Case
                Pack</strong></font></div>
            </td>
            <td colspan="2" valign="bottom" width="14%" 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>Manufacturer</strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="18%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>&#174;</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                SR</font></div>
            </td>
            <td align="left" valign="bottom" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">20mg
                phenylephrine HCI</font></div>
            </td>
            <td align="right" valign="bottom" width="13%">
              <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">14629-101-01</font></div>
            </td>
            <td align="right" valign="bottom" width="10%">
              <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">100ct</font></div>
            </td>
            <td align="right" valign="bottom" width="9%">
              <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">12</font></div>
            </td>
            <td align="left" colspan="2" valign="bottom" width="14%">
              <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 rowspan="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">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8mg
                chlorpheniramine maleate</font></div>
            </td>
            <td rowspan="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: 0pt" align="center">&#160;</div>
            </td>
            <td rowspan="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="center">&#160;</div>
            </td>
            <td rowspan="2" valign="bottom" width="9%" 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;</div>
            </td>
            <td colspan="2" valign="bottom" width="14%">
              <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">Sovereign
                Pharma</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" 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="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.5mg
                methscopolamine nitrate</font></div>
            </td>
            <td align="left" colspan="2" valign="bottom" width="39%" 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>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="18%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>&#174;</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                JR</font></div>
            </td>
            <td align="left" valign="bottom" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10mg
                phenylephrine HCI</font></div>
            </td>
            <td align="right" valign="bottom" width="13%">
              <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">14629-102-01</font></div>
            </td>
            <td align="right" valign="bottom" width="10%">
              <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">100ct</font></div>
            </td>
            <td align="right" valign="bottom" width="9%">
              <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">12</font></div>
            </td>
            <td align="left" colspan="2" valign="bottom" width="14%">&#160;</td>
          </tr>
          <tr>
            <td rowspan="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">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4mg
                chlorpheniramine maleate</font></div>
            </td>
            <td rowspan="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: 0pt" align="center">&#160;</div>
            </td>
            <td rowspan="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="center">&#160;</div>
            </td>
            <td rowspan="2" valign="bottom" width="9%" 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;</div>
            </td>
            <td colspan="2" valign="bottom" width="14%">
              <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">Sovereign
                Pharma</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" 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="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.25
                methscopolamine nitrate</font></div>
            </td>
            <td align="left" colspan="2" valign="bottom" width="39%" 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>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="18%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>&#174;
                </sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chew</font></div>
            </td>
            <td align="left" valign="bottom" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10mg
                phenylephrine HCI</font></div>
            </td>
            <td align="right" valign="bottom" width="13%">
              <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">10122-403-10</font></div>
            </td>
            <td align="right" valign="bottom" width="10%">
              <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">100ct</font></div>
            </td>
            <td align="right" valign="bottom" width="9%">
              <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">12</font></div>
            </td>
            <td align="right" colspan="2" valign="bottom" width="14%">&#160;</td>
          </tr>
          <tr>
            <td align="left" rowspan="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="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2mg
                chlorpheniramine maleate</font></div>
            </td>
            <td align="right" rowspan="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: 0pt" align="right">&#160;</div>
            </td>
            <td align="right" rowspan="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="right">&#160;</div>
            </td>
            <td align="right" rowspan="2" valign="bottom" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
            </td>
            <td colspan="2" valign="bottom" width="14%">
              <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">Sovereign
                Pharma</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" 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="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.25mg
                methscopolamine nitrate</font></div>
            </td>
            <td align="left" colspan="2" valign="bottom" width="39%" 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>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="18%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>&#174;</sup></font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>&#160;</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Syrup</font></div>
            </td>
            <td align="left" valign="bottom" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10mg
                phenylephrine HCI</font></div>
            </td>
            <td align="right" valign="bottom" width="13%">
              <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">10122-404-16</font></div>
            </td>
            <td align="right" valign="bottom" width="10%">
              <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">16oz</font></div>
            </td>
            <td align="right" valign="bottom" width="9%">
              <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">12</font></div>
            </td>
            <td align="left" colspan="2" valign="bottom" width="14%">&#160;</td>
          </tr>
          <tr>
            <td rowspan="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">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2mg
                chlorpheniramine maleate</font></div>
            </td>
            <td rowspan="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: 0pt" align="center">&#160;</div>
            </td>
            <td rowspan="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="center">&#160;</div>
            </td>
            <td rowspan="2" valign="bottom" width="9%" 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;</div>
            </td>
            <td colspan="2" valign="bottom" width="14%">
              <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">Sovereign
                Pharma</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" 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="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.25mg
                methscopolamine nitrate</font></div>
            </td>
            <td align="left" colspan="2" valign="bottom" width="39%" 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>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="18%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>&#174;</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                PSE</font></div>
            </td>
            <td align="left" valign="bottom" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">120mg
                pseudoephedrine HCL</font></div>
            </td>
            <td align="right" valign="bottom" width="13%">
              <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">14629-201-01</font></div>
            </td>
            <td align="right" valign="bottom" width="10%">
              <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">100ct</font></div>
            </td>
            <td align="right" valign="bottom" width="9%">
              <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">12</font></div>
            </td>
            <td align="left" colspan="2" valign="bottom" width="14%">&#160;</td>
          </tr>
          <tr>
            <td rowspan="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">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.5mg
                methscopolamine nitrate</font></div>
            </td>
            <td rowspan="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: 0pt" align="center">&#160;</div>
            </td>
            <td rowspan="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="center">&#160;</div>
            </td>
            <td rowspan="2" valign="bottom" width="9%" 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;</div>
            </td>
            <td colspan="2" valign="bottom" width="14%">
              <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">Provident
                Pharma</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" 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="left">&#160;</div>
            </td>
            <td align="left" colspan="2" valign="bottom" width="39%" 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>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="18%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>&#174;</sup></font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>&#160;</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">DM</font></div>
            </td>
            <td align="left" valign="bottom" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">30mg
                dextromethorphan HBR</font></div>
            </td>
            <td align="right" valign="bottom" width="13%">
              <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">14629-202-01</font></div>
            </td>
            <td align="right" valign="bottom" width="10%">
              <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">100ct</font></div>
            </td>
            <td align="right" valign="bottom" width="9%">
              <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">12</font></div>
            </td>
            <td align="right" colspan="2" valign="bottom" width="14%">&#160;</td>
          </tr>
          <tr>
            <td align="left" rowspan="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="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8mg
                chlorpheniramine maleate</font></div>
            </td>
            <td align="right" rowspan="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: 0pt" align="right">&#160;</div>
            </td>
            <td align="right" rowspan="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="right">&#160;</div>
            </td>
            <td align="right" rowspan="2" valign="bottom" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
            </td>
            <td colspan="2" valign="bottom" width="14%">
              <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">Provident
                Pharma</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" 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="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.5mg
                methscopolamine nitrate</font></div>
            </td>
            <td align="left" colspan="2" valign="bottom" width="39%" 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>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="18%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Extendryl</font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup>&#174;</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                HC
                Tabs</font></div>
            </td>
            <td align="left" valign="bottom" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10mg
                hydrocodone bitartrate</font></div>
            </td>
            <td align="right" valign="bottom" width="13%">
              <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">14629-203-01</font></div>
            </td>
            <td align="right" valign="bottom" width="10%">
              <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">100ct</font></div>
            </td>
            <td align="right" valign="bottom" width="9%">
              <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">12</font></div>
            </td>
            <td align="left" colspan="2" valign="bottom" width="14%">&#160;</td>
          </tr>
          <tr>
            <td rowspan="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">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1000mg
                guaifenesin</font></div>
            </td>
            <td align="right" rowspan="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: 0pt" align="right">&#160;</div>
            </td>
            <td align="right" rowspan="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="right">&#160;</div>
            </td>
            <td rowspan="2" valign="bottom" width="9%" 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;</div>
            </td>
            <td colspan="2" valign="bottom" width="14%">
              <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">Provident
                Pharma</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" 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="left">&#160;</div>
            </td>
            <td align="left" colspan="2" valign="bottom" width="39%" 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>
          </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">Sovereign
      Pharmaceuticals:</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sovereign
      Pharmaceuticals, established 1990, is a privately owned and operated company.
      Sovereign&#8217;s committed team of employees excels in cGMP training and is focused
      on delivering high quality products in a timely manner. During the past three
      years Sovereign has upgraded equipment and facilities to meet the demands of
      its
      customers. The firm has recently completed a major expansion of its Research
      &amp; Development Department, moving that department to a state of the art 7,200
      square foot facility and employing several scientists and additional support
      personnel.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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: ">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="justify"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sovereign
      Pharmaceuticals specializes in the manufacture of customized dosage forms,
      including those made with their Fastab technology. Sovereign has the capability
      to manufacture over 650 million tablets per year. Sovereign&#8217;s packaging
      capabilities are even greater at over 700 million tablets per year. In addition,
      Sovereign has liquid formulation capability that encompasses a diverse range
      of
      liquid products including over-the-counter preparations. Sovereign has the
      capability to manufacture 3 million pints each year. Sovereign&#8217;s liquid
      packaging capabilities are even greater at 3.5 million pints each
      year.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Provident
      Pharmaceuticals:</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Provident
      Pharmaceuticals, LLC. is focused on providing product development, contract
      manufacturing and packaging, and laboratory services for the pharmaceutical
      industry. Provident manufacturers a variety of solid dose and oral dose
      prescription products. Provident also has laboratory facilities to conduct
      all
      testing, validation and development activities. Provident Pharmaceuticals is
      headed up by Dr. Brian Crook who brings extensive experience in the
      pharmaceutical manufacturing industry with Pharma-Fab prior to starting
      Provident.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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
      August
      26, 2005, the Company was notified by the Department of Health &amp; Human
      Services ("DHHS") that the Company's listed manufacturer(s) Form(s) FDA 2657
      were incomplete. DHHS required the Company to notify its manufacturers to file
      a
      complete Form FDA 2657 correcting these inadequacies. To the Company&#8217;s
      knowledge, the Company&#8217;s manufacturer(s) Form(s) FDA 2657 have been
      supplemented. </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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">EMPLOYEES</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      of May
      15, 2006, Auriga employed sixty-three full time personnel, fifty of which are
      engaged in sales and marketing, two in research and development, five in finance
      and administration and six in executive positions. None of the employees of
      Auriga are or ever have been the subject of any collective bargaining agreement
      with Auriga. Auriga&#8217;s management believes that its relationship with its
      employees is good.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FACILITIES</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga&#8217;s
      executive offices, administration and sales and marketing facilities are located
      at 5555 Triangle Parkway, Norcross, Georgia. The approximately 6,200 square
      feet
      is leased until October 31, 2008 at a bare rent of $8,749 per month, increasing
      yearly up to $9,560 per month. Auriga also occupies approximately 3,900 square
      feet at the same location, under a sublease terminating on October 19, 2007,
      at
      a monthly rental of $5,049. Auriga is also a lessee of approximately 2,490
      square feet of office space in Danbury, Connecticut, which lease expires on
      June
      30, 2008. Auriga has subleased this space to a non-affiliate at a monthly rental
      that equals approximately 75% of Auriga&#8217;s monthly obligation under the lease.
      Auriga&#8217;s management believes that the Norcross, Georgia facilities are
      sufficient for its existing activities and potential growth, and that the
      facilities are well maintained and in good condition.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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: ">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>
    <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>MANAGEMENT</strong></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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">DIRECTORS
      AND EXECUTIVE OFFICERS</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      of the
      Closing of the Merger on May 17, 2006, the following lists the name, age and
      business experience of each of the Multi-Link&#8217;s directors and executive
      officers.</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="1" bordercolor="#000000" cellpadding="2" cellspacing="0" width="100%">

          <tr bgcolor="white">
            <td valign="top" 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"><strong>Name</strong></font></div>
            </td>
            <td valign="top" 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>Age</strong></font></div>
            </td>
            <td valign="top" width="37%" 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>Position</strong></font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" 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">Philip
                S. Pesin</font></div>
            </td>
            <td valign="top" 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">32</font></div>
            </td>
            <td align="left" valign="top" width="37%" 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">Chairman,
                Chief Executive Officer and Chief Financial Officer </font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" 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">Dayne
                Wagoner</font></div>
            </td>
            <td valign="top" 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">41</font></div>
            </td>
            <td align="left" valign="top" width="37%" 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">Director
                and Secretary</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="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Philip
      S. Pesin</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      was a
      founder and director of Auriga since its inception in April 2005. He was
      appointed Chairman of the Board in December 2005 and became CEO, Treasurer
      and
      Secretary on March 29, 2006. Mr. Pesin is an attorney and certified public
      accountant. He is the founder of the Sorrento Financial Group, LLC, a financial
      services company specializing in private equity and business consulting. Mr.
      Pesin is actively involved in his community and sits on the board of directors
      of the Boys &amp; Girls Club of the Southwest. Mr. Pesin is a member of the bar
      associations of California and the District of Columbia, and holds a Master
      of
      Laws degree from The Georgetown University Law Center, a Juris Doctor from
      the
      University of San Diego School of Law, and a Bachelor of Science in finance
      from
      The University of Arizona.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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 id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Dayne
      Wagoner</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      became a
      director of Auriga in December 2005. In 1995 Mr. Wagoner founded Edge
      Development, Inc. and from that time to the present he has been the CEO. Edge
      Development, Inc. is a leading contractor in the United States.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Employment
      Agreements.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>&#160;</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      March
      29, 2006, Auriga entered into an Employment Agreement with Philip S. Pesin
      to be
      employed as Auriga&#8217;s Chief Executive Officer. The agreement provides for a base
      salary of $360,000 annually with incentive bonuses to be based on objective
      or
      subjective criteria established by the Board of Directors. Auriga may terminate
      Mr. Pesin&#8217;s employment at any time with or without cause. If Mr. Pesin is
      terminated without cause, he will be entitled a severance pay equal to his
      base
      salary for a period of twelve months following his termination plus continued
      health benefits for approximately eighteen months. Mr. Pesin receives no
      benefits if he is terminated for cause. Mr. Pesin will also receive similar
      benefits as aforementioned if he is terminated other than for cause, after
      a
      change in control.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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 id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Director
      Compensation. </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Directors,
      other than employees of Multi-Link, receive a directors&#8217; fee of $2,500 per month
      plus they are reimbursed any expenses incurred by attending Board of Directors&#8217;
meetings. Multi-Link has entered into indemnification agreements with each
      of
      its directors. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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: ">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>
    <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>SECURITY
      OWNERSHIP OF </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>CERTAIN
      BENEFICIAL OWNERS AND MANAGEMENT </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      following table sets forth certain information regarding Multi-Link&#8217;s common
      stock beneficially owned on May 17, 2006, for (i) each stockholder known to
      be
      the beneficial owner of 5% or more of Multi-Link&#8217;s outstanding common stock,
      (ii) each executive officer and director, and (iii) all executive officers
      and
      directors as a group, after giving effect to the Merger, on a pre-Reverse Split
      and post-Reverse Split basis. In general, a person is deemed to be a "beneficial
      owner" of a security if that person has or shares the power to vote or direct
      the voting of such security, or the power to dispose or to direct the
      disposition of such security. A person is also deemed to be a beneficial owner
      of any securities of which the person has the right to acquire beneficial
      ownership within 60 days.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Assuming
      the automatic conversion of the Preferred Stock into Multi-Link&#8217;s Common Stock
      occurred as of May 17 2006, Multi-Link expects to have 532,193,404 and
      35,479,627 shares of common stock outstanding on a pre-Reverse Split and
      post-Reverse Split basis, respectively. </font></div>
    <div align="left">
      <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

          <tr bgcolor="white">
            <td align="left" valign="bottom" width="42%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="17%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="17%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="17%" 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="white">
            <td align="left" valign="bottom" width="42%" 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
                of Beneficial Owner</strong></font></div>
            </td>
            <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="17%" 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">Amount</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">(Pre-Reverse
                Split)</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="17%" 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">Amount</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">(Post-Reverse
                Split)</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="17%" 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">Percent</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
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              <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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            <td align="right" valign="bottom" width="16%" style="border-bottom: white;">
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="16%" style="border-bottom: #ccffcc;">
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="16%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10.3</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="16%" style="border-bottom: white;">
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="16%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,201,468</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="16%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9.0</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">37,517,190</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="16%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,501,146</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="16%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6.6</font></div>
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            <td align="left" valign="bottom" width="42%" style="border-bottom: white;">
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="16%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,703,182</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="16%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,913,545</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="16%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5.4</font></div>
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            <td align="left" valign="bottom" width="42%" style="border-bottom: #ccffcc;">
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="16%" style="border-bottom: #ccffcc;">
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="16%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,904,822</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="16%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">44.2</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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        </div>
      </div>
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        <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>
      <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: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font></td>
            <td align="left">
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Includes
                shares held by Sorrento Financial Group, LLC, SFP, LLC and TSFG II,
                LLC,
                over which Mr. Pesin has voting and investment control. Includes
                warrants
                to purchase 75,034,395 and 5,002,293 shares of Multi-Link&#8217;s common stock,
                on a pre-Reverse Split and post-Reverse Split basis, respectively,
                at an
                exercise price of $0.92 per share on a post-Reverse Split basis.
                These
                warrants expire March 19, 2016. Includes 7,503,435 and 500,229 shares
                of
                Multi-Link&#8217;s common stock, on a pre-Reverse Split and post-Reverse Split
                basis, respectively, held in an IRA for the benefit of Christine
                Pesin,
                Mr. Pesin&#8217;s spouse. </font></div>
            </td>
          </tr>

      </table>
    </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: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</font></td>
            <td align="left">
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Excludes
                2,532,795 and 168,853 shares of Multi-Link&#8217;s common stock, on a
                pre-Reverse Split and post-Reverse Split basis, respectively, held
                by C.
                Collard Irrevocable Trust over which Mr. Collard disclaims any beneficial
                interest.</font></div>
            </td>
          </tr>

      </table>
    </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: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)</font></td>
            <td align="left">
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Excludes
                options to purchase 2,251,035 and 150,069 shares of Multi-Link&#8217;s common
                stock, on a pre-Reverse Split and post-Reverse Split basis, respectively,
                at an exercise price of $0.92 per share on a post-Reverse Split basis,
                which options begin to vest May 29, 2007.
</font></div>
            </td>
          </tr>

      </table>
    </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: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(4)</font></td>
            <td align="left">
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Includes
                warrants to purchase 30,013,755 and 2,000,917 shares of Multi-Link&#8217;s
                common stock, on a pre-Reverse Split and post-Reverse Split basis,
                respectively, at an exercise price of $0.92 per share on a post-Reverse
                Split basis, which warrants expire March 30, 2010. Also includes
                warrants
                to purchase 7,503,435 and 500,229 shares of Multi-Link&#8217;s common stock, on
                a pre-Reverse Split and post-Reverse Split basis, respectively, at
                an
                exercise price of $1.25 per share on a post-Reverse Split basis,
                which
                warrants expire March 30, 2010. </font></div>
            </td>
          </tr>

      </table>
    </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: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(5)</font></td>
            <td align="left">
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Timothy
                J. Keating is the manager of KI Equity Partners I, LLC (&#8220;KI Equity&#8221;) and
                has sole voting and investment control of such shares.
                </font></div>
            </td>
          </tr>

      </table>
    </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: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(6)</font></td>
            <td align="left">
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Includes
                shares held by Sorrento Financial Group, LLC, SFP, LLC and TSFG II,
                LP,
                over which Mr. Pesin has voting and investment control. Includes
                warrants
                to purchase 75,034,395 and 5,002,293 shares of Multi-Link&#8217;s common stock,
                on a pre-Reverse Split and post-Reverse Split basis, respectively,
                at an
                exercise price of $0.92 per share on a post-Reverse Split basis,
                which are
                held by Mr. Pesin. These warrants expire March 19, 2016. Includes
                7,503,435 and 500,229 shares of Multi-Link&#8217;s common stock, on a
                pre-Reverse Split and post-Reverse Split basis, respectively, held
                in an
                IRA for the benefit of Christine Pesin, Mr. Pesin&#8217;s spouse.
                </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"><strong>CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS</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: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
      the
      Closing, Multi-Link entered into a Financial Advisory Agreement with Keating
      Securities, LLC (&#8220;Keating Securities&#8221;), a registered broker-dealer, under which
      Keating Securities was paid $340,000 by Multi-Link for its advisory services
      rendered to Multi-Link in connection with the Merger.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">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>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      licensing agreement with Fleming and Company Pharmaceuticals (&#8220;Fleming&#8221;) for the
      Extendryl&#174; line of products is between Cornerstone BioPharma, Ltd.
      (&#8220;Cornerstone&#8221;) and Auriga and is referred to as the Fleming license agreement.
      Additionally, the sublicensing agreement with Cornerstone for the Extendryl&#174;
line of products is between Cornerstone and Auriga and is referred to as the
      Cornerstone sublicense agreement. During the fiscal year ended March 31, 2006,
      Messrs. Craig Collard and Philip Pesin, Auriga&#8217;s chairman, sat on the board of
      directors of both Cornerstone and Auriga. Although Mr. Pesin resigned from
      the
      Cornerstone&#8217;s board in January 2006, he remains a significant stockholder of
      Cornerstone.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
      the fiscal year ended March 31, 2006, Auriga received royalty income associated
      with the Extendryl&#174; licensing agreement of $21,619 from Cornerstone. This
      Extendryl licensing agreement was revised effective August 1, 2005 whereby
      Auriga pays a royalty to Cornerstone for its sales of Extendryl&#174;. Auriga&#8217;s
      royalty expense to Cornerstone for the period ended March 31, 2006 amounted
      to
      approximately $492,516. </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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      July
      2005, Auriga entered into an agreement for advisory services with the Sorrento
      Financial Group, LLC (&#8220;SFG&#8221;) an entity owned by Mr. Pesin, Auriga&#8217;s Chairman,
      Chief Executive Officer and significant stockholder. During the fiscal year
      ended March 31, 2006, Auriga paid $382,583 to SFG for advisory services. On
      April 28, 2006 under an amended and restated agreement, Auriga paid $250,000
      to
      SFG for its financial advice and structuring of a successful private placement
      funding. The amended and restated agreement with SGF expired in accordance
      with
      its terms on April 30, 2006.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
      the fiscal year ended March 31, 2006, Auriga utilized the legal services of
      Sorrento Law Group, P.C., an entity owned by Mr. Pesin, Auriga&#8217;s Chairman, Chief
      Executive Officer and significant stockholder, and paid $294,324 to this
      entity.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      October 1, 2005, Auriga issued a warrant to purchase 2,000,000 shares of common
      stock at $0.01 per share to Mr. Pesin, Auriga&#8217;s Chairman, Chief Executive
      Officer and significant stockholder, in exchange for his agreement to personally
      guarantee up to $5,000,000 of Auriga&#8217;s debt. The warrant was exercised on March
      13, 2006. </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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      November 20, 2005, Auriga sold and issued 150,000 shares of common stock at
      a
      purchase price of $0.01 per share subject to a right of repurchase to Mr.
      Wagoner, a member of Auriga&#8217;s Board of Directors in conjunction with his
      director agreement.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      November 20, 2005, Auriga sold and issued 150,000 shares of common stock at
      a
      purchase price of $0.01 per share to Auriga&#8217;s outside corporate
      counsel.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      December 15, 2005, Auriga entered into a redemption agreement and unsecured
      subordinated promissory note agreement with Craig Collard in connection with
      his
      resignation from Auriga&#8217;s board of directors. As part of this agreement, Auriga
      repurchased 1,500,000 shares of common stock held by Craig Collard for a per
      share price of $1.50 in exchange for a note. The payment terms of the note
      provide for a $150,000 payment on January 2, 2006, $600,000 on January 2, 2007,
      $750,000 on January 2, 2008 and $750,000 on January 2, 2009. All payments
      occurring after 2006 are subject to an interest rate of 2% per
      annum.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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        </div>
      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">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>
    <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
      29, 2006, Auriga entered into an employment agreement with Philip S. Pesin
      as
      Chief Executive Officer, which provided in part a warrant to purchase 2,500,000
      shares of Common Stock at a price of $1.85 per share in addition to a listing
      bonus of $250,000 upon becoming a publicly traded company. The lisitng bonus
      has
      now been earned as a result of the Closing of the Merger. This employment
      agreement was terminated on May 17, 2006 by the mutual agreement of the parties
      and upon the execution of a new employment agreement with Multi Link
      Telecommunications, Inc. See Employment Agreements.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      believe that all of the transactions set forth above were made on terms no
      less
      favorable to us than could have been obtained from unaffiliated third parties.
      We intend that all future transactions with affiliated persons be approved
      by a
      majority of the Board of Directors, including a majority of the independent
      and
      disinterested outside directors on the Board of Directors, and be on terms
      no
      less favorable to us than could be obtained from unaffiliated third
      parties.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><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: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section
      16(a) of the Securities Exchange Act of 1934, as amended, requires Multi-Link&#8217;s
      directors and executive officers, and persons who beneficially own more than
      10%
      of a registered class of Multi-Link&#8217;s equity securities, to file reports of
      beneficial ownership and changes in beneficial ownership of Multi-Link&#8217;s
      securities with the SEC on Forms 3 (Initial Statement of Beneficial Ownership),
      4 (Statement of Changes of Beneficial Ownership of Securities) and 5 (Annual
      Statement of Beneficial Ownership of Securities). Directors, executive officers
      and beneficial owners of more than 10% of Multi-Link&#8217;s common stock are required
      by SEC regulations to furnish Multi-Link with copies of all Section 16(a) forms
      that they file. Except as otherwise set forth herein, based solely on review
      of
      the copies of such forms furnished to Multi-Link, or written representations
      that no reports were required, Multi-Link believes that for the fiscal year
      ended September 30, 2005 beneficial owners complied with the Section 16(a)
      filing requirements applicable to them in that each officer, director and
      beneficial owner of 10% or more of Multi-Link&#8217;s securities filed a Form 3 with
      the SEC and has had no change of ownership since such filing. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DESCRIPTION
      OF CAPITAL STOCK</strong></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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Multi-Link</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Multi-Link</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8217;s
      authorized capital consists of 150,000,000 shares of Common Stock, no par value,
      and 5,000,000 shares of Preferred Stock, $0.01 par value, of which 1,200,000
      shares have been designated as Series A Convertible Preferred Stock. There
      are
      currently, issued and outstanding, 37,215,913 shares of Common Stock and
      1,000,042 shares of Series A Convertible Preferred Stock (&#8220;Preferred Stock&#8221;),
      convertible into 494,977,491 shares of Common Stock.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      holders of Common Stock are entitled to one vote for each share held of record
      on all matters submitted to a vote of the holders of Common Stock. Subject
      to
      preferences applicable to any outstanding Preferred Stock, holders of Common
      Stock are entitled to receive ratably such dividends as may be declared by
      the
      Board of Directors out of funds legally available therefore. In the event of
      a
      liquidation, dissolution or winding up of Multi-Link, the holders of Common
      Stock are entitled to share ratably all assets remaining after payment of
      liabilities and the liquidation preference of any Preferred Stock. Holders
      of
      Common Stock have no preemptive or subscription rights, and there are no
      redemption or conversion rights with respect to such shares. All outstanding
      shares of Common Stock are fully paid and non-assessable. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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>
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        <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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      the
      event of any liquidation, dissolution or winding up of Multi-Link, the assets
      of
      Multi-Link available for distribution to shareholders will be distributed among
      the holders of Preferred Stock and the holders of any other class of equity
      securities of Multi-Link, including its common stock, pro rata, on an
      as-converted-to-common-stock basis, after the payment to the holders of
      Preferred Stock of a di minimus par value amount. </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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      holders of Preferred Stock are entitled to dividends in the event that
      Multi-Link pays cash or other dividends in property to holders of outstanding
      shares of its common stock, which dividends would be made pro rata, on an
      as-converted-to-common-stock basis.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Conversion Rate applicable to the Preferred Stock is subject to adjustment
      from
      time to time in the event of any stock dividend, stock split, reverse stock
      split, reorganization or other corporate event affecting the outstanding capital
      stock of Multi-Link (including the Reverse Split).</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
      any period in which the Preferred Stock is outstanding, Multi-Link is not
      permitted to, without first obtaining the approval (by vote or written consent,
      as provided by law) of the holders of at least a majority of the then
      outstanding Preferred Stock, voting as a separate class: </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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="justify"><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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">create
                (by reclassification or otherwise) any new class or series of stock
                having
                rights, preferences or privileges equal or senior to the Series A
                Convertible Preferred Stock. </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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="justify"><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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">directly
                or indirectly, alter or change the rights, preferences or privileges
                of
                the Series A Convertible Preferred Stock.
</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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="justify"><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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">amend
                Multi-Link&#8217;s Articles of Incorporation in a manner that materially
                adversely affects the rights, preferences or privileges of the holders
                of
                the Series A Convertible Preferred
                Stock.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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="justify"><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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">increase
                or decrease the authorized number of shares of preferred stock of
                Multi-Link as a whole;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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="justify"><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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">liquidate
                or wind-up Multi-Link; or</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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="justify"><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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">redeem,
                purchase or otherwise acquire (or pay into or set funds aside for
                a
                sinking fund for such purpose) any share or shares of Preferred Stock
                or
                common stock; provided, however, that this restriction will not apply
                to
                the repurchase of shares of common stock from employees, officers,
                directors, consultants or other persons performing services for Multi-Link
                or any subsidiary pursuant to agreements under which Multi-Link has
                the
                option to repurchase such shares at cost upon the occurrence of certain
                events, such as the termination of employment, or through the exercise
                of
                any right of first refusal.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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: ">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="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Upon
      the
      occurrence of the Mandatory Conversion, or any other redemption or
      extinguishment of the Series A Convertible Preferred Stock, the shares
      converted, redeemed or extinguished will be automatically returned to the status
      of authorized and unissued shares of preferred stock, available for future
      designation and issuance pursuant to the terms of Multi-Link&#8217;s Certificate of
      Incorporation.</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Multi-Link&#8217;s
      Articles of Amendment setting forth the Designations, Preferences, Rights and
      Limitations of Series A Convertible Preferred Stock, as filed with the Secretary
      of State of the State of Colorado, is attached as Exhibit 4.1 to this Current
      Report on Form 8-K, and is incorporated herein by reference.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Auriga</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Auriga
      is
      authorized under its Articles of Incorporation to issue 50,000,000 shares of
      common stock. Prior to the Closing, 16,490,990 shares of Auriga&#8217;s common stock
      were issued and outstanding, fully paid, and non-assessable. These shares were
      exchanged for Preferred Stock of Multi-Link in the Merger. All of these shares
      are now owned by Multi-Link.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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>SECTION
      3 - SECURITIES AND TRADING MARKETS</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>ITEM
      3.02 Unregistered Sales of Equity Securities</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">As
      part
      of the formation and reorganization of Auriga in April 2005, Auriga issued
      11,146,634 shares of its Common Stock in exchange for all of the issued and
      outstanding capital stock and issued and outstanding membership interests of
      Tryon Labs, Inc. and Auriga Pharmaceuticals, LLC, respectively. The issuance
      of
      such shares was made in reliance on the exemption from registration requirements
      of the Securities Act, pursuant to Section 4(2) thereof.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      April
      2005, Auriga also issued 1,600,000 shares of its Common Stock in exchange for
      royalty rights in and to Extendryl products from Champion Pharmaceuticals,
      Inc.
      The issuance of such shares was made in reliance on the exemption from
      registration requirements of the Securities Act pursuant to Section 4(2)
      thereof.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      April
      2005, Auriga sold in a private placement 1,500,000 shares of its Common Stock
      at
      $1.00 per share for an aggregate amount of $1,500,000. The shares were sold
      under Rule 506 of Regulation D promulgated under the Securities Act of 1933,
      as
      amended, (the &#8220;Securities Act&#8221;) to &#8220;accredited investors&#8221; as such term is
      defined under such Regulation D.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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
      April
      28, 2006, Auriga closed a private placement of 1,478,078 of its Common Stock
      at
      a purchase price of $1.85 per share under Rule 506 of Regulation D promulgated
      under the Securities Act to &#8220;accredited investors&#8221; as such term is defined under
      such Regulation D. Auriga received $2,734,844 gross proceeds from the sale
      of
      the shares. In connection therewith, Sorrento Financial Group, LLC, an entity
      owned by Auriga Chairman, CEO and significant shareholder, received $250,000
      for
      its financial services in structuring the private placement.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><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: ">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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
      the
      Closing, pursuant to the Merger Agreement, all of the stockholders of Auriga
      exchanged their shares of Auriga Common Stock for 1,000,042 shares of Multi-Link
      Series A Convertible Preferred Stock (&#8220;Preferred Stock&#8221;), which will be
      converted into 494,977,491 shares of Multi-Link Common Stock.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      addition each outstanding Auriga option and warrant to purchase shares of Auriga
      Common Stock was assumed by Multi-Link and will be converted into an option
      or
      warrant to purchase shares of Multi-Link Common Stock, with the numbers of
      shares and exercise price being adjusted accordingly. Since Multi-Link is
      presently authorized under its Certificate of Incorporation to issue only
      150,000,000 shares of Common Stock, it will undertake a reverse stock split
      as
      described in Section 2.2 above to enable the conversion of the Preferred Stock
      into Common Stock. The issuance of the Preferred Stock and, upon conversion,
      the
      Common Stock was done pursuant to an exemption from registration in accordance
      with Section 4(2) and/or Regulation D under the Securities Act.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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>SECTION
      4 - MATTERS RELATED TO ACCOUNTANTS AND FINANCIAL
      STATEMENTS</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>ITEM
      4.01 Changes in Registrant&#8217;s Certifying Accountant.</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">(a)
      Effective as of May 16, 2006, the Board of Directors of Multi-Link dismissed
      Jaspers + Hall, PC as Multi-Link&#8217;s independent registered public accounting
      firm.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      reports of Jaspers + Hall, PC on the financial statements of Multi-Link, under
      the date of December 22, 2005, as of and for the fiscal year ended September
      30,
      2005 did not contain an adverse opinion or disclaimer of opinion and were not
      qualified or modified as to uncertainty, audit scope or accounting principles,
      except the 2005 report did contain an explanatory paragraph related to
      Multi-Link&#8217;s ability to continue as a going concern.</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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
      the fiscal year ended September 30, 2005 and through the interim periods
      subsequent thereto, there have been no disagreements with Jaspers + Hall, PC
      on
      any matter of accounting principles or practices, financial statement disclosure
      or auditing scope or procedure, which disagreements if not resolved to the
      satisfaction of Jaspers + Hall, PC would have caused Jaspers + Hall, PC to
      make
      reference to such disagreement in its report on the financial statements for
      such years and period.</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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
      the fiscal year ended September 30, 2005 and through the interim periods
      subsequent thereto, there have been no events requiring identification in
      response to Item 304(a)(1)(iv)(B)&#160;of Regulation S-B.</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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Multi-Link
      has requested that Jaspers + Hall, PC furnish it with a letter addressed to
      the
      SEC stating whether or not it agrees with the above statements. A copy of such
      letter, dated May 18, 2006, is filed as Exhibit 16.0 to this Form
      8-K.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#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>
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        <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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)&#160;
      Effective as of May 17, 2006, the Board of Directors appointed Williams &amp;
Webster, P.S. as Multi-Link&#8217;s independent registered public accounting firm and
      engaged Williams &amp; Webster, P.S. to audit the financial statements of
      Multi-Link for the fiscal year ended March 31, 2007. Williams &amp; Webster,
      P.S. has been engaged as the independent auditors of Auriga since April
      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>SECTION
      5 - CORPORATE GOVERNANCE 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>ITEM
      5.01 Changes in Control of Registrant.</strong></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 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">As
      part
      of the Merger, Kevin Keating resigned from his position as the sole director
      of
      Multi-Link effective as of the Closing. Philip Pesin, Chief Executive Officer
      of
      Auriga was appointed as Chairman, Chief Executive Officer and Chief Financial
      Officer of Multi-Link, and Dayne Wagoner, a director of Auriga, was appointed
      Secretary and a director of Multi-Link, each effective as of the
      Closing.</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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Also
      as
      part of the Merger, Multi-Link issued the shares of its Preferred Stock to
      the
      former stockholders of Auriga as described under Items 2.2 and
      3.02.</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>ITEM
      5.02 Departure of Directors or Principal Officers; Election of Directors;
      Appointment of Principal Officers.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      part
      of the Merger, Kevin Keating resigned from his position as a director,
      President, Treasurer and Secretary of Multi-Link effective as of the Closing.
      Philip Pesin, Chief Executive Officer of Auriga was appointed as Chairman,
      Chief
      Executive Officer and Chief Financial Officer of Multi-Link, and Dayne Wagoner,
      a director of Auriga, was appointed Secretary and a director of Multi-Link,
      each
      effective as of the Closing. The business experience of Messrs.&#160;Pesin and
      Wagoner is shown 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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Philip
      Pesin </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Age
      32)</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"><em>Chairman,
      Chief Executive Officer and Chief Financial Officer</em></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Philip
      S.
      Pesin was a founder and director of Auriga since its inception in April 2005.
      He
      was appointed Chairman of the Board in December 2005 and became CEO, Treasurer
      and Secretary on March 29, 2006. Mr. Pesin is an attorney and certified public
      accountant. He is the founder of the Sorrento Financial Group, LLC, a financial
      services company specializing in private equity and business consulting. Mr.
      Pesin is actively involved in his community and sits on the board of directors
      of the Boys &amp; Girls Club of the Southwest. Mr. Pesin is a member of the bar
      associations of California and the District of Columbia, and holds a Master
      of
      Laws degree from The Georgetown University Law Center, a Juris Doctor from
      the
      University of San Diego School of Law, and a Bachelor of Science in finance
      from
      The University of Arizona.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">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>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; 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>Dayne
      Wagoner </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Age
      41)</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"><em>Secretary
      and Director</em></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Dayne
      Wagoner became a director of Auriga in December 2005. In 1995 Mr. Wagoner
      founded Edge Development, Inc. and from that time to the present he has been
      the
      CEO. Edge Development, Inc. is rated 192 out of the top building contractors
      in
      the United States.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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>ITEM
      5.03 Amendments to Articles of Incorporation or Bylaws; Changes in Fiscal
      Year.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Effective
      as of May 17, 2006, the Board of Directors of Multi-Link approved a change
      in
      Multi-Link&#8217;s fiscal year from September 30 to March 31. Multi-Link will account
      for the transaction contemplated in the Merger Agreement as a &#8220;reverse
      acquisition.&#8221; Consequently, Multi-Link will not file a transition report
      reflecting the change in its fiscal year to that of Auriga, since for accounting
      purposes, Auriga is deemed to be the &#8220;accounting acquirer&#8221; in the &#8220;reverse
      acquisition.&#8221;</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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
      5.06 Change in Shell Company Status.</strong></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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Please
      see the discussion in Item 2.01 above relating to the Merger with Auriga, which
      discussion is incorporated herein by reference. As a result of the Merger,
      Multi-Link ceased to be a shell 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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECTION
      9- FINANCIAL STATEMENTS AND EXHIBITS</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>ITEM
      9.01 F</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>inancial
      Statements and Exhibits</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</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">(a)&#160;
      Financial Statements of Business Acquired.</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>
            <td align="left" colspan="2" valign="top" width="72%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Audited
                Financial Statements of Auriga</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>
          </tr>
          <tr>
            <td align="left" valign="top" width="5%">
              <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="67%">
              <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>
          </tr>
          <tr>
            <td align="left" valign="top" width="5%">
              <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="67%">
              <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="top" width="6%">
              <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">F-1</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="5%" 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="top" width="67%" 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">Consolidated
                Balance Sheet at March&#160;31, 2006</font></div>
            </td>
            <td align="left" valign="top" 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="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">F-2</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="5%" 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="top" width="67%" 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">Consolidated
                Statement of Operations for the Period From April 12, 2005 (date
                of
                inception) to Year Ended March 31, 2006. </font></div>
            </td>
            <td align="left" valign="top" 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="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">F-3</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="5%" 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="top" width="67%" 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">Consolidated
                Statement of Stockholders&#8217; Deficit for the Period From April 12, 2005
                (date of inception)&#160;to Year Ended March 31, 2006.</font></div>
            </td>
            <td align="left" valign="top" 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="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">F-4</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="5%" 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="top" width="67%" 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">Consolidated
                Statements of Cash Flows for the Period From April 12, 2005 (date
                of
                inception)&#160;to Year Ended March 31, 2006.</font></div>
            </td>
            <td align="left" valign="top" 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="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">F-5</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="5%" 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="top" width="67%" 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">Notes
                to Consolidated Financial Statements</font></div>
            </td>
            <td align="left" valign="top" 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="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">F-6</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="5%" 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="top" width="67%" 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="top" 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">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="5%" 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">(b)</font></div>
            </td>
            <td align="left" valign="top" width="67%" 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">Pro
                Forma Financial Information.</font></div>
            </td>
            <td align="left" valign="top" 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">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="5%" 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="right" valign="top" width="67%" 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="right" valign="top" 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="right">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="5%" 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="top" width="67%" style="border-bottom: medium none;">
              <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">None
                required.</font></div>
            </td>
            <td align="left" valign="top" width="6%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
          </tr>

      </table>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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            <td align="left" valign="bottom" width="1%">
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                Keating Securities, LLC and Multi-Link Telecommunications,
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            <td align="left" valign="bottom" width="1%">&#160;</td>
            <td align="left" valign="top" width="65%">&#160;</td>
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            <td align="left" valign="top" width="7%">
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            <td align="left" valign="top" width="65%">&#160;</td>
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        Georgia</font></div>
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      <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>REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</u></strong></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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        have
        audited the accompanying balance sheet of Auriga Laboratories, Inc. as of
        March
        31, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006,
        and
        the related statements of operations, stockholders' deficit and cash flows
        for
        the period</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        from
        April 12, 2005 (inception) to March 31, 2006. These financial statements
        are the
        responsibility of the Company's management. Our responsibility is to express
        an
        opinion on these financial statements based on our audit.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
        conducted our audit in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of 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 </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">principles
        used and significant estimates made by management, as well as evaluating
        the
        overall</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        financial statement presentation. We believe that our audit provides 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="justify">&#160;</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">In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of Auriga Laboratories, Inc. as
        of
        March 31, 2006 and the results of its </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">operations,
        stockholders' deficit and its cash flows for the period from April 12, 2005
        (inception)</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        to March
        31, 2006 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="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><img src="sig.jpg" alt=""></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">Williams
        &amp; Webster, P.S.</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"><em>Certified
        Public Accountants</em></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">Spokane,
        Washington</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">April
        27,
        2006</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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Members
        </em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>of
        </em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Private
        Companies Practice Section, SEC Practice Section, AICPA and WSCPA
</em></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"><em>Bank
        of America Financial Center&#160;<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#183;</font></em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>601
        W
        Riverside, Suite 1940 </em></font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><em><font size="2">&#183;</font></em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Spokane,
        WA 99201 </em></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"><em>Phone
        (509) 838-5111 &#183; Fax (509) 838-5114 </em></font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><em><font size="2">&#183;</font></em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>www</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>.williams-webster.com</em></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: ">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>&#160;</div>
      <div>
        <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AURIGA
          LABORATORIES, INC. AND SUBSIDIARIES</strong></font></div>
      </div>
      <div>
        <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CONSOLIDATED
          BALANCE SHEET</strong></font></div>
        <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>MARCH
          31, 2006</strong></font><br></div>
        <div>
          <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%">&#160;</td>
                <td width="2%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
                <td align="right" valign="bottom" width="11%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ASSETS</strong></font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 9pt" 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: white;">&#160;</td>
                <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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 18pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                    and cash equivalents</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="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: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">504,344
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 18pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
                    receivable, net</font>&#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;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">774,722
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 18pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Inventory</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">308,708
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 18pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Prepaid
                    expenses</font>&#160;</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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">119,491
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc solid;">
                  <div style="MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; 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: #ccffcc 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,707,265
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin 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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc solid;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">PROPERTY
                    AND EQUIPMENT, net</font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">311,125
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin 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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 9pt" 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: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 18pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Goodwill</font>&#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;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">92,316
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc solid;">
                  <div style="MARGIN-LEFT: 18pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Deposits</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">22,724
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                    Other 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">115,040
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">&#160;</td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TOTAL
                    ASSETS</strong></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 double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,133,430
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">&#160;</td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>LIABILITIES
                    AND STOCKHOLDERS' DEFICIT</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;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 9pt" 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: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 18pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
                    payable</font>&#160;</div>
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                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">504,168
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 18pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accrued
                    expenses </font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">281,785
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 18pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Bank
                    notes payable</font>&#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;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">234,813
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 18pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Royalties
                    payable</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">492,516
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 18pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Related
                    party loan, current portion</font>&#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;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">511,751
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc solid;">
                  <div style="MARGIN-LEFT: 18pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Deposit
                    on stock subscriptions </font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">578,627
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; 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 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,603,660
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">&#160;</td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">LONG-TERM
                    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;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc solid;">
                  <div style="MARGIN-LEFT: 18pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Related
                    party loan, less current portion</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,414,802
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                    Long-Term Debt</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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,414,802
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">&#160;</td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; 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 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,018,462
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">&#160;</td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 9pt" 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 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 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 thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">&#160;</td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">STOCKHOLDERS'
                    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="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 18pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
                    stock, $0.0001 par value, 50,000,000 shares </font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">authorized;
                    18,762,912 shares</font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">issued
                    and 15,012,912 outstanding</font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,876
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 18pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Additional
                    paid-in capital</font>&#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;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,355,200
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 18pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
                    subscriptions receivable</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(21,500</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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;">
                  <div style="MARGIN-LEFT: 18pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Treasury
                    stock, 3,750,000 shares purchased, at cost</font>&#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;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,070,555</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc solid;">
                  <div style="MARGIN-LEFT: 18pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accumulated
                    deficit</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,150,053</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc solid;">
                  <div style="MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                    Stockholders' Deficit</font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,885,032</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
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                    LIABILITIES AND</strong></font></div>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc solid;">
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                <td width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc solid;">&#160;</td>
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          </table>
        </div>
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        <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">The
          accompanying notes are an integral part of these financial
          statements.</font></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">
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          <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>
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              <hr style="COLOR: black" noshade size="2">
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          </div>
          <div id="HDR">
            <div id="GLHDR" style="WIDTH: 100%" align="right">
            </div>
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        <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>AURIGA
          LABORATORIES, INC. AND SUBSIDIARIES</strong></font></div>
        <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>CONSOLIDATED
          STATEMENT OF OPERATIONS </strong></font></div>
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      <div>
        <div>
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              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%">&#160;</td>
                <td width="2%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
                <td align="right" valign="bottom" width="11%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
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                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
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                <td width="2%" style="border-bottom: white;">&#160;</td>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc solid;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Royalties
                    from related party</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc 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;">
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                    </font></div>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                    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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,596,873
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">&#160;</td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">COST
                    OF GOODS SOLD</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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Materials
                    and supplies</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
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                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Royalties</font>&#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;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,443,679
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc solid;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                    cost of sales</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">134,452
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc solid;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                    Cost of Goods Sold</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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,626,488
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">&#160;</td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">GROSS
                    PROFIT</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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,970,385
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">&#160;</td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">GENERAL
                    AND ADMINISTRATIVE 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;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Marketing
                    and advertising</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">867,244
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Legal
                    and professional fees</font>&#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;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">735,805
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consulting</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">317,351
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Labor
                    and benefits</font>&#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;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,060,208
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Travel</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">414,968
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                    general and administrative expenses</font>&#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;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">576,640
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc solid;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Non-cash
                    professional fees</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">92,116
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                    General and Administrative Expenses</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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,064,332
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">&#160;</td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">OPERATING
                    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;">
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                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">&#160;</td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">OTHER
                    INCOME(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;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
                    income</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,778
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
                    expense</font>&#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;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(71,292</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc solid;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Non-cash
                    financing expense</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,986,592</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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 solid;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                    Other Income(Expenses)</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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(2,056,106</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">&#160;</td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                  <div 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 thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,150,053</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">&#160;</td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NET
                    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="11%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">BASIC
                    AND DILUTED</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(0.24</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">&#160;</td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">WEIGHTED
                    AVERAGE NUMBER OF COMMON</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="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SHARES
                    OUTSTANDING, BASIC AND DILUTED</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12,975,107
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
              </tr>

          </table>
        </div>
      </div>
      <div>&#160;</div>
      <div>
        <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">The
          accompanying notes are an integral part of these financial
          statements.</font></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-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>&#160;</div>
      <div>
        <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>AURIGA
          LABORATORIES, INC. AND SUBSIDIARIES</strong></font></div>
      </div>
      <div>
        <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>CONSOLIDATED
          STATEMENT OF STOCKHOLDERS' DEFICIT</strong></font></div>
      </div>
      <div>
        <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>FROM
          APRIL 12, 2005 (DATE OF INCEPTION) TO MARCH 31, 2006</strong></font></div><br>
        <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: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="5" valign="bottom" width="17%" style="border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">Common
                    Stock </font><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: #ffffff thin solid;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">Additional</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: #ffffff thin solid;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">Stock</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="5" valign="bottom" width="17%" style="border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">Treasury
                    Stock</font><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;Accumulated
                    Deficit</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="27%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">Number
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;Paid-in</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">Subscriptions</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">Number
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              </tr>
              <tr>
                <td align="left" valign="bottom" width="27%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">of
                    Shares </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;Amount</font></div>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: black thin solid;">
                  <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">Total</font></div>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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              <tr bgcolor="white">
                <td align="left" valign="bottom" width="27%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" colspan="2" valign="bottom" width="8%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="27%" style="border-bottom: #ccffcc;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">Stock
                    issued in connection with the Company's</font></div>
                </td>
                <td width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="27%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">reorganization</font></div>
                </td>
                <td width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">11,156,624
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">1,115
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">1,115</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="27%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="27%" style="border-bottom: #ccffcc;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">Stock
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                </td>
                <td width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">1,600,000
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                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">160
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">at
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                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">Stock
                    issued to member of the board of directors</font></div>
                </td>
                <td width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">150,000
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">15
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                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
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                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">(1,500</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">-
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="27%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">at
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                <td width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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              <tr bgcolor="white">
                <td align="left" valign="bottom" width="27%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">Stock
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                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
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                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">1,500
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                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="27%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">at
                    $0.01 per common share</font></div>
                </td>
                <td width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="27%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="27%" style="border-bottom: #ccffcc;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">Stock
                    issued in connection with employment </font></div>
                </td>
                <td width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">2,250,000
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">225
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">22,275
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
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                <td align="left" valign="bottom" width="27%" style="border-bottom: #ccffcc;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">Stock
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                <td width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="27%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">$1.00
                    per share, net of offering costs</font></div>
                </td>
                <td width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">1,456,288
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                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">146
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">1,231,447
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">1,231,593
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                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="27%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="27%" style="border-bottom: #ccffcc;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">Warrant
                    exercised for services and stock subscription</font></div>
                </td>
                <td width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">2,000,000
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">200
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">2,098,508
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">(20,000</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="27%" style="border-bottom: #ccffcc;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">Stock
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                </td>
                <td width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">1,500,000
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
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                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">)</font></div>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">)</font></div>
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              <tr bgcolor="white">
                <td align="left" valign="bottom" width="27%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="27%" style="border-bottom: #ccffcc;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">Stock
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                </td>
                <td width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">2,250,000
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                <td align="left" valign="bottom" width="27%" style="border-bottom: #ccffcc;">
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="27%" style="border-bottom: white solid;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">Balance,
                    March 31, 2006</font></div>
                </td>
                <td width="1%" style="border-bottom: white thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black double;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">18,762,912
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">1,876
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">3,355,200
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">(21,500</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black double;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">3,750,000
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">(2,070,555</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">(3,150,053</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">$</font></div>
                </td>
                <td align="right" valign="bottom" width="7%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">(1,885,032</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Times New Roman">)</font></div>
                </td>
              </tr>

          </table>
        </div>
      </div>
      <div>&#160;</div>
      <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">The
        accompanying notes are an integral part of these financial
        statements.</font></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-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>&#160;</div>
      <div>
        <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>AURIGA
          LABORATORIES, INC. AND SUBSIDIARIES</strong></font></div>
      </div>
      <div>
        <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>CONSOLIDATED
          STATEMENT OF CASH FLOWS</strong></font></div>
      </div>
      <div>
        <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>FROM
          APRIL 12, 2005 (DATE OF INCEPTION) TO MARCH 31, 2006</strong></font></div><br>
        <div>
          <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%">&#160;</td>
                <td width="2%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
                <td align="right" valign="bottom" width="11%">&#160;</td>
                <td align="left" valign="bottom" width="1%">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div 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: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                    loss</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: white;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,150,053</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Adjustments
                    to reconcile net loss to net cash</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">flows
                    provided (used) by operating activities:</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation</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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">42,147
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Non-cash
                    expenses</font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,078,708
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amortization
                    of note payable 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,498
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Changes
                    in assets and liabilities</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Receivables</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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(705,707</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; 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: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(308,708</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(119,491</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; 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: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(22,724</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">453,497
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accrued
                    expenses</font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">272,509
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Royalties
                    payable</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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">492,516
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc solid;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                    cash used by operating activities</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(938,808</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div 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: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purchase
                    of fixed assets</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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(353,272</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc solid;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                    cash used by investing activities</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(353,272</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div 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: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                    proceeds from stock 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,255,484
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                    proceeds on bank notes payable</font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">234,813
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Payments
                    on related party loans</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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; 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="1%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Proceeds
                    from deposits on stock subscriptions</font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">578,627
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Repurchase
                    of treasury stock</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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(22,500</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc solid;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                    cash provided by financing activities</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,796,424
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin 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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                    increase in cash</font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">504,344
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc solid;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash,
                    beginning of period</font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc 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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 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: #ccffcc thin 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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc solid;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash,
                    end of period</font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="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="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">504,344
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc 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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUPPLEMENTAL
                    CASH FLOW DISCLOSURES:</font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
                    paid</font>&#160;</div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="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: #ccffcc;">
                  <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">42,794
                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NON-CASH
                    INVESTING AND FINANCING:</font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 9pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
                    repurchased in exchange for note payable</font>&#160;</div>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
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                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
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                    purchased by acquisition/reorganization:</font>&#160;</div>
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                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
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                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
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                <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="#ccffcc">
                <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; 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: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
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                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                  <div style="MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Related
                    party loan</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;">
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                    </font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
              </tr>

          </table>
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      <div>
        <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">The
          accompanying notes are an integral part of these financial
          statements.</font></div>
      </div>
      <div><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: ">F-5</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
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          </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"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AURIGA
        LABORATORIES, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INC.
        AND
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSIDIARIES
        </font></strong></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS </font></strong></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 151.2pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></strong></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;

        <div>
          <hr style="COLOR: black" align="left" noshade size="1" width="100%">
        </div>
      </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"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTE
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1-</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">BUSINESS
        ORGANIZATION</font></strong></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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga
        Laboratories, Inc. ("Auriga") was formed as a Delaware corporation in April
        12,
        2005 as part of a reorganization transaction involving several companies
        owned
        by the founders and is authorized to issue 50,000,000 shares of $0.0001 par
        value common stock. In April 2005, all of the stock of Tryon Labs, Inc. (a
        Delaware corporation) and Auriga Pharmaceuticals, LLC (a Delaware limited
        liability corporation) was contributed to Auriga in exchange for stock in
        Auriga. As part of the reorganization transaction, Tryon Labs, Inc. changed
        its
        name to Auriga Development, Inc. and operates as a wholly-owned subsidiary
        engaged in drug development. Auriga Pharmaceuticals, LLC also became a
        wholly-owned subsidiary of Auriga, and is engaged in the sales and marketing
        of
        Company products.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Auriga
        Laboratories, Inc. and subsidiaries (hereinafter, "the Company") is a
        pharmaceutical company organized to develop pharmaceutical products using
        patented delivery technologies in niche markets while marketing and selling
        prescription pharmaceutical products.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        March
        30, 2006, Auriga entered into a letter of intent with Multi-Link
        Telecommunications, Inc. ("Multi-Link"), a Colorado corporation, whereby
        Multi-Link would acquire the Company. Multi-Link is currently a public "shell"
        company with nominal assets whose sole business has been to identify, evaluate
        and investigate various companies for the purpose of acquiring a company
        with an
        operating business with the intent of continuing the acquired company's business
        as a publicly held company.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
        the
        transactions contemplated under the letter of intent, Multi-Link would issue
        restricted shares of its convertible preferred stock, the designations, rights
        and preferences of which will be established by Multi-Link's board of directors
        prior to closing ("Series A Preferred Shares"), to the holders of the Company's
        outstanding equity securities including any securities sold and issued to
        accredited investors participating in the Company's limited offering pursuant
        to
        its private placement memorandum (collectively, the "Auriga Stockholders").
        The
        closing of the proposed acquisition would be subject to the Company's completion
        of a private placement of its equity securities to certain accredited investors
        of not less than $750,000 ("Offering").</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Series A Preferred Shares that would be issued to the Company's Stockholders
        together with any options, warrants and other convertible securities of the
        Company assumed by Multi-Link in connection with the acquisition of the Company
        would, in the aggregate, represent no less than 95% of the issued and
        outstanding shares of common stock of Multi-Link on a fully diluted and
        as-converted basis following the acquisition of the Company. In exchange
        for the
        Series A Preferred Shares that would be issued to the Company's Stockholders,
        such Auriga Stockholders would transfer to Multi-Link or a newly-fouued
        wholly-owned subsidiary of Multi-Link, 100% of the outstanding capital stock
        of
        the Company. As a result, the Company would become a wholly-owned subsidiary
        of
        Multi-Link following the acquisition. At the close of the acquisition, it
        is
        contemplated that a new board of directors would be designated by the Company.
        The current stockholders of Multi-Link are expected to own no more than
        approximately 5% of the issued and outstanding common stock of Multi-Link
        after
        completion of the acquisition of the Company and the Offering, calculated
        on a
        fully diluted and as-converted basis.</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: ">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="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AURIGA
        LABORATORIES, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INC.
        AND
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSIDIARIES</font></strong></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS</font></strong></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></strong></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="justify">
        <hr style="COLOR: black" align="left" noshade size="1" width="100%">&#160;</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">The
        completion of the acquisition is subject to certain conditions to closing,
        including but not limited to, the negotiation and execution of a definitive
        acquisition agreement, the delivery of audited financial statements of the
        Company prepared in accordance with generally accepted accounting principles
        in
        the United States of America, the approval by the Company's board and
        stockholders and Multi-Link's board.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company anticipates that the acquisition agreement would also provide that
        Multi-Link take the following corporate actions ("Actions") promptly following
        the closing of the acquisition: (a) change the company name to a name selected
        by Auriga; and (b) increase Multi-Link's authorized number of shares of common
        stock and a reverse stock split of Multi-Link's common stock, on such terms
        as
        mutually agreed to by the parties, to permit Multi-Link to issue the additional
        shares of its common stock to be issued upon the conversion of the Series
        A
        Preferred Shares and to allow Multi-Link to have additional shares of authorized
        and unissued common stock for other corporate purposes. The Series A Preferred
        Shares will automatically convert without further action of the holder thereof
        into shares of Multi-Link's common stock upon stockholder approval of the
        Actions and compliance with the waiting periods under applicable securities
        laws.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subject
        to the satisfaction of the above conditions and other customary conditions,
        the
        acquisition is presently expected to close on or about May 15, 2006. However,
        there can be no assurances that the acquisition or the Offering will be
        completed on the timeline anticipated or at all.</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">In
        connection with the above transaction, Multi-Link filed a Form 8-K. with
        the
        Securities and Exchange Commission on March 30, 2006.</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>NOTE
        2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</strong></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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
        summary of significant accounting policies of the Company is presented to
        assist
        in understanding the Company's financial statements. The financial statements
        and notes are representations of the Company's management, which is responsible
        for their integrity and objectivity. These accounting policies conform to
        accounting principles generally accepted in the United States of America,
        and
        have been consistently applied in the preparation of the financial
        statements.</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"><u>Basis
        of Accounting</u></font></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">The
        Company's financial statements are prepared using the accrual basis of
        accounting in accordance with accounting principles generally accepted in
        the
        United States of America. The Company has a March 31 year-end. References
        to
        "fiscal 2006" are for the period April 12, 2005 to March 31, 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 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-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><br></div>
      <div>
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          LABORATORIES, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INC.
          AND
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSIDIARIES</font></strong></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS</font></strong></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
          </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
          </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></strong></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="justify">
          <hr style="COLOR: black" align="left" noshade size="1" width="100%">
        </div>
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      <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"><u>Principles
        of Consolidation</u></font></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">The
        accompanying consolidated financial statements include all accounts of the
        Company and its wholly owned subsidiaries. All significant intercompany accounts
        and transactions have been eliminated in consolidation.</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"><u>Estimates</u></font></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">The
        process of preparing financial statements in conformity with accounting
        principles generally accepted in the United States of America requires the
        use
        of estimates and assumptions regarding certain types of assets, liabilities,
        revenues, and expenses. Such estimates primarily relate to unsettled
        transactions and events as of the date of the financial statements. Accordingly,
        upon settlement, actual results may differ from estimated amounts.</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"><u>Fair
        Value of Financial Instruments</u></font></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">The
        Company's financial instruments as defined by Statement of Financial Accounting
        Standards No. 107, "Disclosures about Fair Value of Financial Instruments,"
        include cash, receivables, prepaid expenses, payables, accrued expenses,
        royalties payable and short-term borrowings. All instruments are accounted
        for
        on an historical cost basis, which, due to the short maturity of these financial
        instruments, approximates fair value at March 31, 2006.</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"><u>Cash
        and Cash Equivalents</u></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
        Company considers all highly liquid investments, with a maturity of three
        months
        or less at the date of acquisition, to be cash equivalents.</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"><u>Accounts
        Receivable</u></font></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">The
        Company carries its accounts receivable at net realizable value. On a periodic
        basis, the Company evaluates its accounts receivable and establishes an
        allowance for doubtful accounts, based upon the aging of accounts receivable
        over 180 days and current credit conditions. As of March 31, 2006, none of
        the
        Company's accounts receivable accounts were over 180 days. The Company's
        policy
        is not to accrue interest on trade receivables. The Company has recorded
        a
        $56,836 allowance for doubtful accounts as of March 31, 2006.</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"><u>Inventory</u></font></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">The
        Company maintains an inventory of pharmaceutical products and samples.
        Inventories are stated at the lower of cost or market. Cost has been determined
        by using the first-in, first-out method. As of March 31, 2006, the Company's
        inventory consisted of the following:</font><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
        <div style="MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
          <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="50%">

              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Phannaceutical
                    products</font></div>
                </td>
                <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="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="21%" style="border-bottom: #ccffcc;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">214,300</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              </tr>
              <tr bgcolor="white">
                <td align="left" valign="bottom" width="75%" 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">Pharmaceutical
                    samples</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="21%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">94,408</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
              </tr>
              <tr bgcolor="#ccffcc">
                <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc 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: #ccffcc 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="21%" 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">308,708</font></div>
                </td>
                <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc solid;">&#160;</td>
              </tr>

          </table>
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; 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"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Property
        and Equipment</u></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">Property
        and equipment are recorded at cost and depreciated using the straight-line
        method over estimated useful lives of three to five years. See Note
        3.</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: ">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><br>
        <div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AURIGA
            LABORATORIES, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INC.
            AND
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSIDIARIES</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></strong></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="justify">
            <hr style="COLOR: black" align="left" noshade size="1" width="100%">
          </div>
        </div>
      </div>
      <div>&#160;</div>
      <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Long-Lived
        Assets</u></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 3.6pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        October 2001, the Financial Accounting Standards Board issued Statement of
        Financial Accounting Standards No. 144, "Accounting for the Impairment or
        Disposal of Long-Lived Assets" (hereinafter "SFAS No. 144"). This standard
        establishes a single accounting model for long-lived assets to be disposed
        of by
        sale, including discontinued operations. SFAS No. 144 requires that these
        long-lived assets be measured at the lower of carrying amount or fair value
        less
        cost to sell, whether reported in continuing operations or discontinued
        operations. The Company has long-term assets consisting of $22,724 relating
        to
        rent deposits.</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: 3.6pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Goodwill
        and Other Intangible Assets</u></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 3.6pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
        the
        provisions of Statement of Financial Accounting Standards No. 141, "Business
        Combinations," and Statement of Financial Accounting Standards No. 142,
        "Goodwill and Other Intangible Assets" ("SFAS No. 142"), all business
        combinations are accounted for using the purchase method and goodwill and
        intangible assets with indefinite useful lives are not amortized but instead
        are
        tested for impairment annually, or more frequently, if facts and circumstances
        indicate such assets may be impaired. The only intangible asset the Company
        classifies as indefinite lives is goodwill. SFAS No. 142 requires testing
        of
        intangible assets with indefinite lives and goodwill for impairment at least
        annually. The Company has performed its annual test and has determined no
        impairment adjustment is required.</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: 3.6pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Compensated
        Absences</u></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 3.6pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Employees
        of the Company are entitled to paid vacation, paid sick days and personal
        days
        off depending on job classification, length of service and other factors.
        The
        Company has a policy of providing for earned but unused vacation and a provision
        has been recorded in the accompanying financial statements as of March 31,
        2006
        in the amount of $22,472.</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: 3.6pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Revenue
        Recognition</u></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 3.6pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company recognizes revenue from the sale of pharmaceutical products, including
        shipping fees, if any, when title to the products is transferred to the customer
        (which usually occurs on delivery) and when collectibility is reasonably
        assured.</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: 3.6pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenue
        from sales of the Company's products is recorded, net of allowances. According
        to the teens of sales contracts, a customer may return product up to a maximum
        amount and under certain conditions. Allowances are calculated based upon
        current economic conditions and the underlying contractual terms. Royalty
        revenue is recognized when earned.</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: 3.6pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company records a sales return allowance for product returns and contractual
        rebates as product is sold. At March 31, 2006, the balance in the allowance
        account was $76,837.</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: 3.6pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Treasury
        Stock</u></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 3.6pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company may from time to time reacquire common stock based on agreements
        to
        repurchase such stock in certain instances. The Company may dispose of such
        treasury shares for such consideration as may be determined from time to
        time by
        the board of directors. When the Company reacquires common stock by issuing
        a
        note, the Company records the securities as treasury stock. Treasury stock
        is
        considered cancelled when the related note is paid off.</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: ">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>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><br>AURIGA
              LABORATORIES, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INC.
              AND
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSIDIARIES</font></strong></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
              TO
              CONSOLIDATED FINANCIAL STATEMENTS</font></strong></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
              </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
              </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></strong></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="justify">
              <hr style="COLOR: black" align="left" noshade size="1" width="100%">
            </div>
          </div>
        </div>
      </div>
      <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"><u>Cost
        of Sales</u></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">Cost
        of
        sales consists of the purchase price of materials and supplies, freight,
        royalties and other direct costs associated with distribution.</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"><u>Research
        and Development</u></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">Research
        and development expenses are charged to operations as incurred. The Company's
        research and development expenses for the period ended March 31, 2006 were
        $91,130.</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"><u>Advertising
        and Marketing</u></font></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">Advertising
        and marketing costs are charged to operations in the period incurred. The
        Company's advertising and marketing expenses for the period ended March 31,
        2006
        were $867,244.</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"><u>Accounting
        for Stock Options and Warrants Granted to Employees and
        Non-employees</u></font></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">In
        December 2004, the Financial Accounting Standards Board issued a revision
        to
        Statement of Financial Accounting Standards No. 123R, "Accounting for Stock
        Based Compensation." This statement supercedes APB Opinion No. 25, "Accounting
        for Stock Issued to Employees," and its related implementation guidance.
        This
        statement establishes standards for the accounting for transactions in which
        an
        entity exchanges its equity instruments for goods or services. It also addresses
        transactions in which an entity incurs liabilities in exchange for goods
        or
        services that are based on the fair value of the entity's equity instruments
        or
        that may be settled by the issuance of those equity instruments. This statement
        focuses primarily on accounting for transactions in which an entity obtains
        employee services in share-based payment transactions. This statement does
        not
        change the accounting guidance for share based payment transactions with
        parties
        other than employees provided in Statement of Financial Accounting Standards
        No.
        123. This statement does not address the accounting for employee share ownership
        plans, which are subject to AICPA Statement of Position 93-6, "Employers'
        Accounting for Employee Stock Ownership Plans." The Company expects no changes
        to its financial reporting as it is already reporting and complying with
        the
        fair value method of SFAS No. 123.</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"><u>Provision
        for Taxes</u></font></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">Income
        taxes are provided based upon the liability method of accounting pursuant
        to
        Statement of Financial Accounting Standards No. 109, "Accounting for Income
        Taxes" (hereinafter "SFAS No. 109"). Under this approach, deferred income
        taxes
        are recorded to reflect the tax consequences in future years of differences
        between the tax basis of assets and liabilities and their financial reporting
        amounts at each year-end. A valuation allowance has been recorded against
        deferred tax assets as management does not believe the Company has met the
        "more
        likely than riot" standard imposed by SFAS No. 109 to allow recognition of
        such
        an asset. See Note 6.</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"><u>Basic
        and Diluted Earnings Per Share</u></font></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">The
        Company has adopted Statement of Financial Accounting Standards Statement
        No.
        128, "Earnings Per Share". Basic earnings per share is computed by dividing
        net
        income (loss) by the weighted average number of common shares outstanding
        for
        the period. Diluted earnings per share is computed by dividing the net income
        (loss) by the weighted average number of basic</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">
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          <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>
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      <div><br>
        <div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AURIGA
            LABORATORIES, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INC.
            AND
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSIDIARIES</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></strong></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="justify">
            <hr style="COLOR: black" align="left" noshade size="1" width="100%">
          </div>
        </div>
      </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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">shares
        outstanding increased by the number of shares that would be outstanding assuming
        conversion of the exercisable stock options and warrants. Diluted net loss
        per
        share is the same as basic net loss per share at March 31, 2006 as inclusion
        of
        the common stock equivalents would be antidilutive. The Company has a total
        of
        5,385,400 shares at March 31, 2006 that would be issued if all options and
        warrants were exercised. The fair market value of all granted options and
        warrants is $5,836,782.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Recent
        Accounting Pronouncements</u></font></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">In
        March
        2006, the Financial Accounting Standards Board issued Statement of Financial
        Accounting Standards No. 156, "Accounting for Servicing of Financial Assets-an
        amendment of FASB Statement No. 140." This statement requires an entity to
        recognize a servicing asset or servicing liability each time it undertakes
        an
        obligation to service a financial asset by entering into a servicing contract
        in
        any of the following situations: a transfer of the servicer's financial assets
        that meets the requirements for sale accounting; a transfer of the servicer's
        financial assets to a qualifying special-purpose entity in a guaranteed mortgage
        securitization in which the transferor retains all of the resulting securities
        and classifies them as either available-for-sale securities or trading
        securities; or an acquisition or assumption of an obligation to service a
        financial asset that does not relate to financial assets of the servicer
        or its
        consolidated affiliates. The statement also requires all separately recognized
        servicing assets and servicing liabilities to be initially measured at fair
        value, if practicable, and permits an entity to choose either the amortization
        or fair value method for subsequent measurement of each class of servicing
        assets and liabilities. The statement further permits, at its initial adoption,
        a one-time reclassification of available for sale securities to trading
        securities by entities with recognized servicing rights, without calling
        into
        question the treatment of other available for sale securities under Statement
        115, provided that the available for sale securities are identified in some
        manner as offsetting the entity's exposure to changes in fair value of servicing
        assets or servicing liabilities that a servicer elects to subsequently measure
        at fair value and requires separate presentation of servicing assets and
        servicing liabilities subsequently measured at fair value in the statement
        of
        financial position and additional disclosures for all separately recognized
        servicing assets and servicing liabilities. This statement is effective for
        fiscal years beginning after September 15, 2006, with early adoption permitted
        as of the beginning of an entity's fiscal year. Management believes the adoption
        of this statement will have no impact on the Company's financial condition
        or
        results of operations.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        February 2006, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 155, "Accounting for Certain Hybrid Financial
        Instruments, an Amendment of FASB Standards No. 133 and 140" (hereinafter
        "SFAS
        No. 155"). This statement established the accounting for certain derivatives
        embedded in other instruments. It simplifies accounting for certain hybrid
        financial instruments by permitting fair value remeasurement for any hybrid
        instrument that contains an embedded derivative that otherwise would require
        bifurcation under SFAS No. 133 as well as eliminating a restriction on the
        passive derivative instruments that a qualifying special-purpose entity ("SPE")
        may hold under SFAS No. 140. This statement allows a public entity to
        irrevocably elect to initially and subsequently measure a hybrid instrument that
        would be required to be separated into a host contract and derivative in
        its
        entirety at fair value (with changes in fair value recognized in earnings)
        so
        long as that</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">
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          </div>
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          <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><br></div>
      <div>
        <div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AURIGA
            LABORATORIES, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INC.
            AND
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSIDIARIES</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></strong></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="justify">
            <hr style="COLOR: black" align="left" noshade size="1" width="100%">
          </div>
        </div>
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">instrument
        is not designated as a hedging instrument pursuant to the statement. SFAS
        No.
        140 previously prohibited a qualifying special-purpose entity from holding
        a
        derivative financial instrument that pertains to a beneficial interest other
        than another derivative financial instrument. This statement is effective
        for
        fiscal years beginning after September 15, 2006, with early adoption peimitted
        as of the begirming of an entity's fiscal year. Management believes the adoption
        of this statement will have no impact on the Company's financial condition
        or
        results of operations.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        May
        2005, the Financial Accounting Standards Board issued Statement of Financial
        Accounting Standards No. 154, "Accounting Changes and Error Corrections,"
        (hereinafter "SFAS No. 154") which replaces Accounting Principles Board Opinion
        No. 20, "Accounting Changes", and SFAS No. 3, "Reporting Accounting Changes
        in
        Interim Financial Statements - An Amendment of APB Opinion No. 28". SFAS
        No. 154
        provides guidance on accounting for and reporting changes in accounting
        principle and error corrections. SFAS No. 154 requires that changes in
        accounting principle be applied retrospectively to prior period financial
        statements and is effective for fiscal years beginning after December 15,
        2005.
        The Company does not expect SFAS No. 154 to have a material impact on its
        consolidated financial position, results of operations, or cash
        flows.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        December 2004, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 153. This statement addresses the measurement
        of exchanges of nonmonetary assets. The guidance in APB Opinion No. 29,
        "Accounting for Nonmonetary Transactions," is based on the principle that
        exchanges of nonmonetary assets should be measured based on the fair value
        of
        the assets exchanged. The guidance in that opinion, however, included certain
        exceptions to that principle. This statement amends Opinion 29 to eliminate
        the
        exception for nonmonetary exchanges of similar productive assets and replaces
        it
        with a general exception for exchanges of nonmonetary assets that do not
        have
        commercial substance. A nonmonetary exchange has commercial substance if
        the
        future cash flows of the entity are expected to change significantly as a
        result
        of the exchange. This statement is effective for financial statements for
        fiscal
        years beginning after June 15, 2005. Management believes the adoption of
        this
        statement will have no impact on the financial statements of the
        Company.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        December 2004, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 152, which amends FASB Statement No. 66,
        "Accounting for Sales of Real Estate," to reference the financial accounting
        and
        reporting guidance for real estate time-sharing transactions that is provided
        in
        AICPA Statement of Position (SOP) 04-2, "Accounting for Real Estate Time-Sharing
        Transactions." This statement also amends FASB Statement No. 67, "Accounting
        for
        Costs and Initial Rental Operations of Real Estate Projects," to state that
        the
        guidance for (a) incidental operations and (b) costs incurred to sell real
        estate projects does not apply to real estate time-sharing transactions.
        The
        accounting for those operations and costs is subject to the guidance in SOP
        04-2. This statement is effective for financial statements for fiscal years
        beginning after June 15, 2005. Management believes the adoption of this
        statement will have no impact on the financial statements of 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 id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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          </div>
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          <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">
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          </div>
        </div>
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      <div><br>
        <div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AURIGA
            LABORATORIES, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INC.
            AND
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSIDIARIES</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></strong></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="justify">
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          </div>
        </div>
      </div>
      <div>&#160;</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">In
        November 2004, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 151, "Inventory </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Costs-</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        an
        amendment of ARB No. 43, Chapter 4." This statement amends the guidance in
        ARB
        No. 43, Chapter 4, "Inventory Pricing," to clarify the accounting for abnormal
        amounts of idle facility expense, freight, handling costs, and wasted material
        (spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated that ". .
        .
        under some circumstances, items such as idle facility expense, excessive
        spoilage, double freight, and rehandling costs may be so abnormal as to require
        treatment as current period charges...." This statement requires that those
        items be recognized as current-period charges regardless of whether they
        meet
        the criterion of "so abnonnal." In addition, this statement requires that
        allocation of fixed production overheads to the costs of conversion be based
        on
        the normal capacity of the production facilities. This statement is effective
        for inventory costs incurred during fiscal years beginning after June 15,
        2005.
        There has been no financial impact to its financial statements from the
        Company's adoption of this statement for its fiscal period ended March 31,
        2006.</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"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTE
        3 -
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">PROPERTY
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AND
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">EQUIPMENT</font></strong></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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Property
        and equipment are stated at cost. Depreciation is provided using the
        straight-line method over the estimated useful lives of the assets ranging
        from
        3 to 5 years. The following is a summary of property, equipment and accumulated
        depreciation at March 31, 2006:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 144pt" align="left"><br></div>
      <div style="MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="60%">

            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; 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
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              </td>
              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-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 id="TAB2" style="MARGIN-LEFT: 0px; COLOR: black; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; LETTER-SPACING: 18pt"></font></div>
              </td>
              <td align="right" valign="bottom" width="21%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font id="TAB2" style="MARGIN-LEFT: 0px; COLOR: black; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; LETTER-SPACING: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">177,279</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="75%" 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">Furniture
                  and fixtures</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="21%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">79,840</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc 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">Leasehold
                  improvements</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc 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="21%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">63,596</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="75%" 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="21%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">320,715</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; 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</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="21%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(42,147</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><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="75%" 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:
                  Assets under construction</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="21%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">32,557</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc 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: #ccffcc 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><font id="TAB2" style="MARGIN-LEFT: 0px; COLOR: black; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; LETTER-SPACING: 17.1pt"></font></div>
              </td>
              <td align="right" valign="bottom" width="21%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font id="TAB2" style="MARGIN-LEFT: 0px; COLOR: black; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; LETTER-SPACING: 17.1pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">311,125</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc 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="justify">&#160;</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">Depreciation
        expense for the period ended March 31, 2006 was $42,147. The Company evaluates
        the recoverability of property and equipment when events and circumstances
        indicate that such assets might be impaired. Maintenance and repairs are
        expensed as incurred. Replacements and betterments are capitalized. The cost
        and
        related reserves of assets sold or retired are removed from the accounts,
        and
        any resulting gain or loss is reflected in results of operations.</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>NOTE
        4 - GOODWILL</strong></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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        April
        2005, the Company acquired all the stock of Tryon Labs, Inc. and Auriga
        Pharmaceuticals, LLC in an exchange for stock in the Company. No cash
        consideration was paid. For the period ended March 31, 2006, the Company
        recorded $92,316 in goodwill associated with initial Company
        reorganization.</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: ">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><br>
        <div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AURIGA
            LABORATORIES, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INC.
            AND
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSIDIARIES</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></strong></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="justify">
            <hr style="COLOR: black" align="left" noshade size="1" width="100%">
          </div>
        </div>
      </div>
      <div>&#160;</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>NOTE
        5 - NOTES PAYABLE</strong></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"><u>Bank
        Notes Payable</u></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 3.6pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        November 2005, the Company obtained an asset-based line of credit from Silicon
        Valley Bank ("SVB") in the amount of $1,000,000. As of March 31, 2006, the
        amount of credit extended by SVB and owed by the Company was $172,519. The
        agreement with SVB provides for advances of up to $1,000,000 against the
        Company's current invoiced trade receivables. The loan agreement was entered
        into on November 22, 2005 and runs for a period of 364 days. Advances under
        the
        loan agreement are subject to finance charges based on an interest rate of
        1.5%
        to 2.00% over prime and a collateral handling fee with a minimum monthly
        charge
        of $2,500 per month.</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: 14.4pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        advances are subject to repayment normally when payment is received but are
        also
        subject</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        to
        automatic repayment if the loan covenants are no longer maintained by the
        Company.</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: 3.6pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        addition, the Company has a short-term financing facility with Wells Fargo,
        which as of March 31, 2006 was $62,294. This financing arrangement was
        personally guaranteed by the Company's chairman. The interest rate is variable
        and during the fiscal year varied from 10.0% to 12.25%.</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"><u>Related
        Party Loan</u></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 3.6pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 15, 2005, the Company repurchased 1,500,000 shares of outstanding
        common </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">stock
        of
        the Company from several selling stockholders in connection with the resignation
        of one</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        of the
        Company directors. The adjusted aggregate purchase price for the shares was
        $2,048,055 plus imputed interested of $201,945. In conjunction with the stock
        purchase agreement, the Company entered into an unsecured subordinated
        promissory note (the "Note") with the selling shareholders. The $2,250,000
        principal is payable in annual installments with $150,000 having been paid
        on
        January 2, 2006 ("installment date"). Associated with this transaction, the
        Company recorded $201,945 in imputed loan interest "loan discount" in order
        to
        realize a 7.5% effective interest rate. This loan discount will be realized
        as
        interest expense based upon the outstanding principal. The remaining balance
        will be paid in the first, second, and third anniversaries of the installment
        date in amounts of $600,000, $750,000 and $750,000, respectively. Interest
        accrues at a rate equal to 2% per annum on the unpaid principal amount of
        the
        Note. Interest is to be paid in arrears in cash by the Company on each
        anniversary of the installment 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: ">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><br></div>
      <div>
        <div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AURIGA
            LABORATORIES, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INC.
            AND
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSIDIARIES</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></strong></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="justify">
            <hr style="COLOR: black" align="left" noshade size="1" width="100%">
          </div>
        </div>
      </div>
      <div><br><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>NOTE
        6 - INCOME TAXES</strong></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">The
        following is a reconciliation of income tax computed at March 31,
        2006:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 57.6pt" align="left"><br></div>
      <div align="center">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="60%">

            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; 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 per books</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="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="21%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,150,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><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="75%" 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">Nondeductible
                  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="21%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">22,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc;">
                <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">Non-cash
                  compensation (Warrants)</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="21%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,078,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="75%" 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">Depreciation
                  &amp; amortization</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="21%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(14,000</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="#ccffcc">
              <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc;">
                <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">Net
                  tax loss</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="21%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,064,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><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="75%" 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">Statutory
                  federal tax rate</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="21%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">34.00</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="#ccffcc">
              <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc 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">Federal
                  income tax benefit</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc 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><font id="TAB2" style="MARGIN-LEFT: 0px; COLOR: black; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; LETTER-SPACING: 11.25pt"></font></div>
              </td>
              <td align="right" valign="bottom" width="21%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font id="TAB2" style="MARGIN-LEFT: 0px; COLOR: black; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; LETTER-SPACING: 11.25pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">362,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 108pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 57.6pt" 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">Deferred
        income taxes reflect the net tax effects of temporary differences between
        the
        carrying amounts of assets and liabilities for financial reporting purposes
        and
        the amounts used for income tax purposes.</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"><u>Deferred
        Taxes</u></font></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">Deferred
        taxes reflect the net tax effects of temporary differences between the carrying
        amounts of assets and liabilities for financial reporting purposes and the
        amounts used for income tax purposes, and operating losses and tax credit
        carryforwards.</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">The
        significant components of net deferred income tax assets are:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="80%">

            <tr bgcolor="white">
              <td valign="bottom" width="61%" style="border-bottom: white thin solid;">&#160;</td>
              <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="17%" 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">March
                  31,</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">2006</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td colspan="2" valign="bottom" width="17%" 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">Statutory</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">Tax
                  Rate</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="61%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Federal
                  net operating loss</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">carryforward</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-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 id="TAB2" style="MARGIN-LEFT: 0px; COLOR: black; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; LETTER-SPACING: 4.65pt"></font></div>
              </td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font id="TAB2" style="MARGIN-LEFT: 0px; COLOR: black; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; LETTER-SPACING: 4.65pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">362,000</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(34.00</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><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="61%" 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">State
                  net operating loss carryforward</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="16%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">63,800</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="16%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(6.00</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="#ccffcc">
              <td align="left" valign="bottom" width="61%" style="border-bottom: #ccffcc 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">Deferred
                  tax liabilities - Excess tax</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">depreciation
                  and amortization</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc 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="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">(4,800</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 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="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">1.00</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><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="61%" 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">Deferred
                  tax assets before valuation</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="16%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">421,000</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="16%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(39.00</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="#ccffcc">
              <td align="left" valign="bottom" width="61%" style="border-bottom: #ccffcc 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">Valuation
                  allowance</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc 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="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">(421,000</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 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>
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                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">39.00</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><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="justify">&#160;</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">Statement
        of Financial Accounting Standards No. 109 requires that the tax benefit of
        net
        operating losses, temporary differences and credit carryforwards be recorded
        as
        an asset to the extent that management assesses that realization is "more
        likely
        than not." Realization of the future tax benefits is dependent on the Company's
        ability to generate sufficient taxable income within the carryforward period.
        Because of the Company's history of operating losses, management has provided
        a
        valuation allowance equal to its net deferred tax assets.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
        March
        31, 2006, the Company had net operating loss carryforwards of approximately
        $1,063,000 to reduce United States federal taxable income in future years.
        This
        carryforward will expire in the year 2026.</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">
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          </div>
        </div>
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          <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>
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          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AURIGA
            LABORATORIES, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INC.
            AND
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSIDIARIES</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></strong></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="justify">
            <hr style="COLOR: black" align="left" noshade size="1" width="100%">
          </div>
        </div>
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      <div>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTE
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7-
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">DEPOSIT
        ON STOCK SUBSCRIPTIONS</font></strong></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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        March
        2006, the Company commenced a second private placement to sell up to 2,000,000
        of its common stock at $1.85 per share. At March 31, 2006, the Company had
        received subscriptions for the purchase of 317,636 shares for an aggregate
        of
        $578,627 from two investors. Since the stock had not been issued as of March
        31,
        2006, the Company has recorded this subscription as a deposit on stock
        subscriptions.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company currently anticipates that the transactions contemplated by a private
        placement memorandum ("PPM") will close by April 30, 2006, but no assurances
        can
        be provided that the transaction contemplated by the PPM will close by then
        or
        at all. See Note 15.</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>NOTE
        8 - CAPITAL STOCK</strong></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"><u>Common
        Stock</u></font></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">The
        Company is authorized to issue 50,000,000 shares of common stock, par value
        $0.001 per share. The Company is not authorized to issue preferred stock
        under
        its certificate of incorporation. As of March 31, 2006, there are 18,762,912
        shares of common stock issued, consisting of 3,750,000 shares of treasury
        stock,
        as detailed in Note 9, and 15,012,912 shares of common stock outstanding.
        Each
        share of common stock is entitled to one vote per share for the election
        of
        directors and on all other matters submitted to a vote of stockholders. There
        are no cumulative voting rights. The common stockholders have contractual
        preemptive rights to subscribe for additional shares in the event the Company
        proposes to sell and issues shares of its common stock in a transaction other
        than: (i) shares issued pursuant to any employee equity plan as determined
        by
        the Company's board of directors, (ii) any securities of the Company that
        are
        issued as a dividend on the common stock, or upon any subdivision or split-up
        of
        the outstanding shares of common stock, (iii) any securities issued in
        connection with an acquisition by the Company, or (iv) any securities issued
        in
        connection with an underwritten public offering of common stock, resulting
        in
        gross proceeds to the Company of at least five million dollars. The Company
        has
        asked the common stockholders to: (i) waive this right with respect to past
        sales and issuances and the Company's currently proposed limited offering
        pursuant to a private placement memorandum, and (ii) amend its prior agreements
        with the Company to eliminate this preemptive right. The common stock is
        not
        subject to conversion or redemption. In the event of liquidation, the holders
        of
        common stock will share equally in any balance of corporate assets available
        for
        distribution to them. Subject to the rights of holders of any other securities
        subsequently issued, holders of the common stock are entitled to receive
        dividends when and as declared by the Company's board of directors out of
        funds
        legally available. The Company has not paid any dividends since its inception
        and has no stated intention to pay any dividends in the foreseeable future.
        Any
        future dividends would be subject to the discretion of the Company's board
        of
        directors and would depend on, among other things, future earnings, the
        operating and financial condition of the Company, its capital requirements,
        and
        general business conditions.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        part
        of the reorganization in April 2005, the Company issued 11,146,624 shares
        of
        common stock in exchange for all of the outstanding stock of Tryon Labs,
        Inc.
        and the reorganization</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div><br></div>
      <div>
        <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
          <div id="FTR">
            <div style="WIDTH: 100%" align="left">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
              </div>
            </div>
            <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 style="WIDTH: 100%" align="left">
            </div>
          </div>
        </div>
      </div>
      <div><br>
        <div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AURIGA
            LABORATORIES, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INC.
            AND
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSIDIARIES</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></strong></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="justify">
            <hr style="COLOR: black" align="left" noshade size="1" width="100%">
          </div>
        </div>
        <div>&#160;</div>
      </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">associated
        with Auriga Pharmaceuticals, LLC. In addition, the Company issued 10,000
        shares
        of common stock to its chainnan in connection with the Company's
        formation.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        April
        2005, the Company issued 1,600,000 shares of common stock in exchange for
        royalty rights in and to the Company's Extendryl products then owned by the
        owner of Champion Pharmaceuticals, Inc.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        August
        2005, the Company completed a private placement of its common stock at an
        average price per common share of $1.00. Pursuant to this private placement,
        the
        Company issued 1,456,288 common shares and received approximately $1,231,593,
        net of offering costs of $224,695.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
        the period ended March 31, 2006, several stock transactions took place, all
        subject to the right of repurchase. The Company issued 2,250,000 shares of
        common stock at a price of $0.01 per share associated with the employment
        of
        former officers,150,000 shares of common stock at a price of $0.01 per share
        to
        a member of the board of directors in conjunction with his director agreement,
        and 150,000 shares of common stock at a price of $0.01 per share to the
        Company's outside corporate counsel.</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>NOTE
        9 - TREASURY STOCK</strong></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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 15, 2005, the Company repurchased 1,500,000 shares of its outstanding
        common stock from several selling stockholders in connection with the
        resignation of a member of the Company's board of directors. The adjusted
        aggregate purchase price for the shares was $2,048,055. In March 2006, the
        Company exercised its right to repurchase 2,250,000 shares of outstanding
        common
        stock of the Company for $22,500 from certain former officers in connection
        with
        the teens and provision of those parties' stock purchase
        agreements.</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>NOTE
        10 - STOCK OPTIONS</strong></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"><u>2005
        Stock Plan</u></font></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">In
        June
        2005, the Company's board of directors approved the 2005 Stock Option Plan
        ("2005 Stock Plan") in which 5,000,000 shares of common stock are available
        to
        be issued under the plan. The 2005 Stock Plan is intended to permit the grant
        of
        common stock options to certain company employees, service providers, and
        non-employee members of the board of directors. As of March 31, 2006, the
        Company had 2,224,000 options available for grant under the 2005 Stock Plan
        and
        2,776,000 options granted but not yet vested.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
        options granted under the 2005 Stock Plan will qualify as incentive stock
        options if the 2005 Stock Plan is approved by stockholders by June, 2006.
        In the
        event that the Company's stockholders do not approve the plan, all options
        that
        may have been granted and that were intended to qualify as incentive stock
        options automatically convert into non-statutory stock options.</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">
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          </div>
        </div>
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          <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">
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          </div>
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      </div>
      <div><br></div>
      <div>
        <div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AURIGA
            LABORATORIES, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INC.
            AND
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSIDIARIES</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></strong></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="justify">
            <hr style="COLOR: black" align="left" noshade size="1" width="100%">
          </div>
        </div>
        <div>&#160;</div>
      </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">All
        awards granted under the 2005 Stock Plan are governed by separate written
        agreements between the Company and the participants and regulated by the
        laws of
        the State of Delaware.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
        the period ended March 31, 2006, the Company granted stock options to purchase
        a
        total of 2,776,000 shares of common stock to its participants. The options
        are
        exercisable at prices </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ranging
        from $0.85 to $1.85 per share but are subject to a repurchase right of the
        Company in the</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        event
        the grantee fails to meet certain vesting requirements The options vest 12/48ths
        after one year of continuous service and 1/48</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>th</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        for each
        month thereafter until fully vested. The average fair value of the options
        of
        $1.12 each was estimated using the Black Scholes Option model. The following
        assumptions were made to value the stock options: risk free interest rate
        of 4%;
        expected life of 10 years; and expected volatility of 39% with no dividends
        expected to be paid.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td valign="bottom" width="27%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td colspan="2" valign="bottom" width="22%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td colspan="2" valign="bottom" width="22%" 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">Weighted-</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td colspan="2" valign="bottom" width="22%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr>
              <td valign="bottom" width="27%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td colspan="2" valign="bottom" width="22%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" colspan="2" valign="bottom" width="22%" 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">average
                  exercise</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td colspan="2" valign="bottom" width="22%" 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">Number
                  of securities</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="27%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="right" colspan="2" valign="bottom" width="22%" 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">Number
                  of securities to</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" colspan="2" valign="bottom" width="22%" 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">price
                  of</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td colspan="2" valign="bottom" width="22%" 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">remaining
                  available for</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="27%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="right" colspan="2" valign="bottom" width="22%" 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">be
                  issued upon exercise</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="right" colspan="2" valign="bottom" width="22%" 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">outstanding</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td colspan="2" valign="bottom" width="22%" 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">future
                  issuance under</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></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: 60.55pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Plan</font></div>
              </td>
              <td width="2%" style="border-bottom: white thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" colspan="2" 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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">of
                  outstanding options</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" colspan="2" 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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">options</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="right" colspan="2" 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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">equity
                  compensation plans</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="27%" style="border-bottom: #ccffcc solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 60.55pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2005
                  Stock Plan</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></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">&#160;</font></td>
              <td align="right" valign="bottom" width="21%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2,776,000</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.20</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></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">&#160;</font></td>
              <td align="right" valign="bottom" width="21%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2,224,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="27%" 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</font></div>
              </td>
              <td width="2%" style="border-bottom: white thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></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">&#160;</font></td>
              <td align="right" valign="bottom" width="21%" 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; FONT-FAMILY: Times New Roman">2
                  776,000</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="11%" style="border-bottom: #ffffff solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: white thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></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">&#160;</font></td>
              <td align="right" valign="bottom" width="21%" 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; FONT-FAMILY: Times New Roman">2,224,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Following
        is a summary of the status of the options outstanding during the period ended
        March </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
        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 align="left">
        <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td valign="bottom" width="61%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td colspan="2" valign="bottom" width="17%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td colspan="2" valign="bottom" width="17%" 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">Weighted</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr>
              <td valign="bottom" width="61%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" colspan="2" valign="bottom" width="17%" 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">Number
                  of Shares</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td colspan="2" valign="bottom" width="17%" 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">Average
                  Exercise</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="61%" style="border-bottom: white solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="2%" style="border-bottom: white thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="right" colspan="2" valign="bottom" width="17%" 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">Under
                  Options</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="right" colspan="2" valign="bottom" width="17%" 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">Price</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="61%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; 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: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2,776,000</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.20</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="61%" 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">Exercised</font></div>
              </td>
              <td width="2%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="61%" style="border-bottom: #ccffcc 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">Forfeited</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></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">&#160;</font></td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></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">&#160;</font></td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: black thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc thin solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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            <tr bgcolor="white">
              <td align="left" valign="bottom" width="61%" 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">Options
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              </td>
              <td width="2%" style="border-bottom: white solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></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">&#160;</font></td>
              <td align="right" valign="bottom" width="16%" 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; FONT-FAMILY: Times New Roman">2,776,000</font></div>
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              <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></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; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="16%" 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; FONT-FAMILY: Times New Roman">1.20</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="61%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; 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 fair value of options granted at</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="61%" style="border-bottom: #ccffcc 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">March
                  31, 2006</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></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">&#160;</font></td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: black double;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></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; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="16%" 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; FONT-FAMILY: Times New Roman">1.12</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="61%" 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
                  compensation costs related to non-</font></div>
              </td>
              <td width="2%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="61%" style="border-bottom: white solid;">
                <div style="MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">vested
                  stock options as of March 31, 2006</font></div>
              </td>
              <td width="2%" style="border-bottom: white solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></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">&#160;</font></td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: black double;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></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="16%" style="border-bottom: black double;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3,117,221</font></td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="61%" style="border-bottom: #ccffcc solid;">
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Weighted
                  average period of non-vested stock</font></div>
                <div style="MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">options
                  as of March 31, 2006&#160;</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: #ccffcc solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></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">&#160;</font></td>
              <td align="right" valign="bottom" width="16%" style="border-bottom: black double;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.75</font></td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc solid;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></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: ">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><br></div>
      <div>
        <div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AURIGA
            LABORATORIES, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INC.
            AND
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSIDIARIES</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></strong></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="justify">
            <hr style="COLOR: black" align="left" noshade size="1" width="100%">
          </div>
        </div>
      </div>
      <div>&#160;</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">Summarized
        information about stock options outstanding at March 31, 2006 is 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: #ffffff solid;">&#160;</td>
              <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td align="right" colspan="8" valign="bottom" width="70%" 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">Outstanding
                  Options</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="top" 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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exercise
                  Price</font></div>
              </td>
              <td valign="top" width="2%" style="border-bottom: white solid;">&#160;</td>
              <td align="right" colspan="2" valign="top" 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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Number
                  of</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">Shares</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</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">Options</font></div>
              </td>
              <td align="left" valign="top" width="2%" style="border-bottom: white solid;">&#160;</td>
              <td align="left" colspan="2" valign="top" 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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Weighted
                  Average</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">Remaining
                  Life</font></div>
              </td>
              <td align="left" valign="top" width="2%" style="border-bottom: white solid;">&#160;</td>
              <td align="left" colspan="2" valign="top" 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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Weighted
                  Average</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">Exercise
                  Price</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="27%" style="border-bottom: #ccffcc;">
                <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">$0.85</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="21%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">485,000</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="21%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9.27</font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="21%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.85</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$1.00</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="21%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,536,000</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="21%" 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">9.92</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>
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              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
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              <td align="right" valign="bottom" width="21%" style="border-bottom: white solid;">&#160;</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;">
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTE
        </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11-</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        COMMON
        STOCK WARRANTS</font></strong></div>
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      <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">During
        the period ended March 31, 2006, the Company issued a total of 109,400 warrants
        to consultants for services and $92,116 was recognized as non-cash professional
        fees. These warrants are exercisable from $0.85-$2.50 per share and expire
        from
        June 2015 - February 2016.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Also
        during the period ended March 31, 2006, the Company issued a warrant enabling
        the holder to purchase 2,000,000 shares of common stock at $0.01 to its chairman
        in exchange for his agreement to personally guarantee up to $5,000,000 of
        debt.
        This warrant was exercised during the period ended March 31, 2006 and $1,986,592
        was recognized as a non-cash financing expense. Additionally, the Company
        issued
        2,500,000 warrants to its chairman enabling the purchase of common stock
        at an
        exercise price of $1.85 in connection with his employment agreement as chief
        executive officer. This warrant expires March 2016 and vests 12/48ths after
        one
        year of service, then 1/48</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>`x'</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        for each
        month thereafter. The warrant becomes fully vested and exercisable upon the
        Company consurmnating a public offering of its equity securities or a merger
        or
        other reorganization with a corporation, or such corporation's subsidiary,
        that
        is subject to the periodic reporting requirements of Section 13 of the Exchange
        Act or Section 15(d) of the Securities Act. This warrant remains outstanding
        at
        March 31, 2006 and has an average fair value of $1.05 for each share purchasable
        as calculated using the Black Scholes Option model.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        charge for common stock warrants for the current period using the Black Scholes
        Option model was $2,078,708. The following assumptions were made to value
        the
        warrants: risk free interest rate of 4%, expected lives of 10 years; and
        expected volatility of 39% with no payment of dividends.</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">There
        are
        2,609,400 warrants outstanding at March 31, 2006, of which none have
        vested.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#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-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%" align="right">
          </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="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AURIGA
              LABORATORIES, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INC.
              AND
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSIDIARIES</font></strong></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
              TO
              CONSOLIDATED FINANCIAL STATEMENTS</font></strong></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
              </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
              </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></strong></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="justify">
              <hr style="COLOR: black" align="left" noshade size="1" width="100%">
            </div>
          </div>
        </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"><strong>NOTE
        12 - 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        licensing agreement with Fleming and Company Pharmaceuticals ("Fleming")
        for the
        Extendryl line of products is between Cornerstone BioPharma, Ltd.
        ("Cornerstone") and the Company and is referred to as the Fleming license
        agreement. Additionally, the sublicensing agreement with Cornerstone for
        the
        Extendryl line of products is between Cornerstone and the Company and is
        referred to as the Cornerstone sublicense agreement. See Note 14 for further
        information. During the period ended March 31, 2006, Messrs. Craig Collard
        and
        Philip Pesin, the Company's chairman, sat on the board of directors of both
        Cornerstone and the Company. Although Mr. Pesin resigned from the Cornerstone's
        board in January 2006, he remains a significant stockholder of
        Cornerstone.</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: 3.6pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
        a
        result of the Tryon transaction in April 2005, the Company acquired a $100,000
        note and $7,873 accrued interest payable to Cornerstone. The note, which
        accrued
        interest at 10% per annum, was paid in full during the period ended March
        31,
        2006.</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: 3.6pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
        July
        2005, the Company entered into an agreement for advisory services with The
        Sorrento Financial Group, LLC ("SFG,LLC"), an entity owned by the Company's
        chairman. Under an amended and restated agreement, the Company is obligated
        to
        pay $250,000 to SFG,LLC upon the successful completion of the second round
        of
        private placement funding. The amended and restated advisory agreement
        terminates on April 30, 2006. During the period ended March 31, 2006, the
        Company paid $382,583 to SFG, LLC.</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: 3.6pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        October 1, 2006, the Company issued a warrant to purchase 2,000,000 shares
        of
        common stock at $0.01 to the Company's chairman in exchange for his agreement
        to
        personally guarantee up to $5,000,000 of the Company's debt. The warrant
        was
        exercised on March 13, 2006.</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: 3.6pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
        fiscal 2005, the company utilized the legal services of Sorrento Law Group,
        P.C., an entity owned by the Company's chairman and paid $294,324 to this
        entity.</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: 3.6pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        November 20, 2005, the Company sold and issued 150,000 shares of common stock
        at
        a purchase price of $0.01 per share subject to a right of repurchase to a
        member
        of the board of directors in conjunction with his director
        agreement.</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: 3.6pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        November 20, 2005, the Company sold and issued 150,000 shares of common stock
        at
        a purchase price of $0.01 per share to the Company's outside corporate
        counsel.</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: 3.6pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        December 15, 2005, the Company repurchased 1,500,000 shares of the outstanding
        common stock of the Company from several selling stockholders. This transaction
        is more fully described in Note 5.</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: 3.6pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        March
        29, 2006, the Company entered into an employment agreement with its chief
        executive officer, which provided in part a warrant to purchase 2,500,000
        shares
        of common stock at a price of $1.85 per share in addition to a bonus of $250,000
        upon the Company becoming publicly traded.</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: ">F-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%" align="right">
          </div>
        </div>
      </div>
      <div><br></div>
      <div>
        <div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AURIGA
            LABORATORIES, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INC.
            AND
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSIDIARIES</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></strong></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="justify">
            <hr style="COLOR: black" align="left" noshade size="1" width="100%">
          </div>
        </div>
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
        the period ended March 31, 2006, the Company received royalty income associated
        with the Extendryl licensing agreement of $21,619 from Cornerstone. This
        Extendryl licensing agreement was revised effective August 1, 2005 whereby
        the
        Company pays a royalty to Cornerstone for its sales of Extendryl. The royalty
        expense to Cornerstone for the period ended March 31, 2006 amounted to
        approximately $764,000.</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>NOTE
        13 - CONCENTRATIONS</strong></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"><u>Credit
        Risk for Cash Held at Banks</u></font></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">The
        Company maintains its cash accounts at various financial institutions. These
        funds are insured to a maximum of $100,000. At March 31, 2006, none of the
        funds
        in these accounts were uninsured.</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"><u>Major
        Customer</u></font></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">During
        the period ended March 31, 2006, there were two major customers with sales
        in
        excess of 90% of gross sales: one accounted for approximately 46% and the
        other
        accounted for approximately 44% of the Company's gross sales.</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>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="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"><u>Fleming
        License Agreement for Extendryl</u></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">In
        May
        2005, Tryon, Cornerstone and Auriga amended the terms of the Fleming Extendryl
        License Agreement as a result of the Company's reorganization in April
        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 style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Effective
        October 1, 2005, the Company will pay royalties to Fleming on net sales as
        follows:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 234pt" align="left"><br></div>
      <div align="left">
        <table cellpadding="0" cellspacing="0" id="ftable" width="60%">

            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;"><font size="2">Legacy
                Product Lines:</font></td>
              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                <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">Calendar
                  year 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;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; 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;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><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="#ccffcc">
              <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                <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">Calendar
                  year 2006</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; 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</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><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;">
                <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">Calendar
                  year 2007 and thereafter</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</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="#ccffcc">
              <td align="left" valign="bottom" width="85%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Line
                  Extensions:</font></div>
              </td>
              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; 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="1%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><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="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"><u>Cornerstone
        Sublicense Agreement for Extendryl</u></font></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">In
        conjunction with the reorganization in April 2005, Auriga, Tryon and Cornerstone
        entered into revised terms for the licensing and development of the Extendryl
        line of products with an effective date of August 1, 2005. Beginning August
        1,
        2005, the Company will pay Cornerstone a royalty based upon a calendar year
        legacy net sales in accordance with the following schedule: 30% of legacy
        net
        sales up to $4,000,000; 8% of legacy net sales thereafter and 0% royalty
        on net
        sales in line extensions. The annual maximum royalty is capped at
        $1,700,000.</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"><u>Integrated
        Commercialization Solutions,</u></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 212.4pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Inc.</u></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 18pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>("ICS")
        Commercial Outsourcing Services</u></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"><u>Agreement
        ("ICS Agreement")</u></font></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">Effective
        June 2005, the Company entered into a three-year commercial outsourcing services
        agreement with ICS to receive exclusive commercialization services relating
        to
        the Company's</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: ">F-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%" align="right">
          </div>
        </div>
      </div>
      <div><br></div>
      <div>
        <div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AURIGA
            LABORATORIES, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INC.
            AND
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSIDIARIES</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></strong></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="justify">
            <hr style="COLOR: black" align="left" noshade size="1" width="100%">
          </div>
        </div>
      </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">pharmaceutical
        products. The Company is committed to pay ICS a minimum of $93,000 in year
        one
        and $177,000 per year in years two and three of the related
        contract.</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"><u>IMS
        Health Incorporated ("IMS') Information Services Agreement</u></font></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">Effective
        October 2005, the Company entered into an information services agreement
        to
        receive data, software, documentation, and services until September 2008.
        Minimum fee commitments are $191,200 in year one, $349,000 in year two, and
        $350,000 in year three of the related contract.</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"><u>Operating
        Leases</u></font></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">The
        Company leases office space for facilities and equipment under operating
        agreements </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">expiring
        from October 2007 through August 2010. Minimum lease payments for fixture
        years
        are</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
        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="center">
        <table cellpadding="0" cellspacing="0" id="ftable" width="50%">

            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc;"><font size="2">Fiscal
                2006</font></td>
              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="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="21%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; 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: #ccffcc;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="75%" style="border-bottom: white;"><font size="2">Fiscal
                2007</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="21%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">208,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc;"><font size="2">Fiscal
                2008</font></td>
              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="21%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">135,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="75%" style="border-bottom: white;"><font size="2">Fiscal
                2009</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="21%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">73,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="75%" style="border-bottom: #ccffcc;"><font size="2">Fiscal
                2010</font></td>
              <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="right" valign="bottom" width="21%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,000</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            </tr>
            <tr bgcolor="white">
              <td align="left" valign="bottom" width="75%" style="border-bottom: white;">
                <div style="MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font size="2">Total</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="21%" style="border-bottom: white;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">649,000</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="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">Total
        rental expense, including common area charges, for the period ending March
        31,
        2006 was approximately $94,000.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Litigation</u></font></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">From
        time
        to time the Company is involved in legal actions arising in the nounal course
        of
        its business. The Company is not presently subject to any material litigation
        nor, to management's knowledge, is any litigation threatened against the
        Company
        that collectively is expected to have a material adverse effect on the Company's
        cash flows, financial condition or results of operations.</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="justify"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTE
        15 -
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSEQUENT
        EVENTS</font></strong></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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Company is currently in the process of raising capital through the sale and
        issuance of common stock to accredited investors pursuant to a private placement
        memorandum ("PPM"). The PPM provides the sale and issuance of up to 2,000,000
        shares of common at a price of $1.85 per share. The PPM also provides for
        the
        issuance of up to an additional 2,000,000 shares of common stock at a price
        of
        $1.85 per share pursuant to an over-allotment option. In exchange for assistance
        in connection with the PPM, the Company has agreed to issue warrants to an
        individual equal to 12% of the number of shares sold and issued pursuant
        to the
        PPM. Subsequent to March 31, 2006 the Company issued 1,478,078 shares of
        common
        stock for $2,734,844 in cash.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        April
        10, 2006, the Company signed a development agreement with Balchem Encapsulates
        to develop an orally dissolving tablet combination of acetaminophen and
        hydrocodone (the "Balchem Agreement"). Under the Balchem Agreement, the Company
        retains Balchem to scale</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">
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          <div style="WIDTH: 100%; TEXT-ALIGN: center">
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        </div>
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      <div>&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
        <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">AURIGA
            LABORATORIES, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">INC.
            AND
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SUBSIDIARIES</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS</font></strong></div>
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">March
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31,
            </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></strong></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="justify">
            <hr style="COLOR: black" align="left" noshade size="1" width="100%">
          </div>
        </div><br><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">up
        and
        validate the Balchem taste masking technology for use with Company products.
        No
        new development is anticipated, and Balchem will continue to own all
        intellectual property in its technology. If any new development becomes
        necessary, a separate development agreement that takes into account ownership
        and/or use rights of the new development will be negotiated between the
        parties.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
        Balchem Agreement remains in force until December 31, 2007, and may be renewed
        by mutual agreement of the parties. Either party may terminate the Balchem
        Agreement if the other party commits an uncured material breach or becomes
        bankrupt. The maximum compensation to be paid to Balchem under the Balchem
        Agreement is $165,000, $140,000 of which is dependent on Balchem meeting
        certain
        milestones and requirements. The Balchem Agreement contains industry standard
        terms and conditions with respect to warranty, indemnity, limitation of
        liability and miscellaneous provisions. A separate license and supply agreement
        will be negotiated by the parties to allow the Company to use the Balchem
        technology with its products.</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
        April
        13, 2006, the Company signed an engagement agreement with Trilogy Capital
        Partners, Inc. ("Trilogy"). Under the engagement agreement, Trilogy will
        provide
        services to the Company, including merchant banking, strategic planning,
        financial marketing, and communications. Pursuant to the engagement agreement,
        the Company issued warrants for 1,250,000 shares of the Company's common
        stock
        to Trilogy and will pay Trilogy $175,000 over the one-year life of the
        engagement agreement and provide an expense allowance of up to
        $250,000.</font></div>
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{"company-data": {"conformed-name": "MULTI LINK TELECOMMUNICATIONS INC", "cik": "0001072313", "assigned-sic": "7389", "irs-number": "841334687", "state-of-incorporation": "CO", "fiscal-year-end": "0930"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-26013", "film-number": "06852949"}, "business-address": {"street1": "4704 HARLAN ST", "street2": "STE 420", "city": "DENVER", "state": "CO", "zip": "80212", "phone": "3038311977"}, "mail-address": {"street1": "4704 HARLAN STREET SUITE 400", "city": "DENVER", "state": "CO", "zip": "80212"}}
UNITED
      STATES
SECURITIES
      AND EXCHANGE COMMISSION
Washington,
      D.C. 20549
FORM
      8-K
CURRENT
      REPORT
PURSUANT
      TO SECTION 13 OR 15(d) OF THE
SECURITIES
      EXCHANGE ACT OF 1934
Date
      of Report: May 18, 2006
Date
      of earliest event reported: May 17, 2006
MULTI-LINK
      TELECOMMUNICATIONS, INC.
(Exact
      name of registrant as specified in charter)
Colorado
(State
      or
      other Jurisdiction of Incorporation or Organization)
0-26013
(Commission
                File Number)
84-1334687
(IRS
                Employer Identification No.)
5555
                Triangle Parkway, Suite 300
Norcross,
                GA 30092
(Address
                of Principal Executive Offices and zip code)
(678)
      282-1600
(Registrant's
      telephone
number,
      including area code)
936A
      Beachland Boulevard, Suite 13
Vero
      Beach, FL 32963
(Former
      Name or Former Address, if Changed Since Last Report)
Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of registrant under any of the following
      provisions:
o
Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)
o
Soliciting
      material pursuant to
      Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))
o
Pre-commencement
      communications
      pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
      240.14d-2(b))
o
Pre-commencement
      communications
      pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
      240.13e-4(c))
SAFE
      HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
      1995
Information
      included in this Form 8-K may contain forward-looking statements within the
      meaning of Section 27A of the Securities Act and Section 21E of the Securities
      Exchange Act of 1934, as amended (the "Exchange Act"). This information may
      involve known and unknown risks, uncertainties and other factors which may
      cause
      Auriga Laboratories, Inc. ("Auriga") and Multi-Link Telecommunications, Inc.'s
      ("Multi-Link") actual results, performance or achievements to be materially
      different from future results, performance or achievements expressed or implied
      by any forward-looking statements. Forward-looking statements, which involve
      assumptions and describe Auriga and Multi-Link's future plans, strategies and
      expectations, are generally identifiable by use of the words "may," "will,"
      "should," "expect," "anticipate," "estimate," "believe," "intend" or "project"
      or the negative of these words or other variations on these words or comparable
      terminology. Forward-looking statements are based on assumptions that may be
      incorrect, and there can be no assurance that any projections or other
      expectations included in any forward-looking statements will come to pass.
      Auriga and Multi-Link's actual results could differ materially from those
      expressed or implied by the forward-looking statements as a result of various
      factors. Except as required by applicable laws, Multi-Link undertakes no
      obligation to update publicly any forward-looking statements for any reason,
      even if new information becomes available or other events occur in the
      future.
SECTION
      2 - FINANCIAL INFORMATION
ITEM
      2.01 Completion of Acquisition or Disposition of Assets.
On
      May
      17, 2006, Multi-Link Telecommunications, Inc., a Colorado corporation
      ("Multi-Link"), completed a merger (the "Merger") with Auriga Laboratories,
      Inc., a Delaware corporation ("Auriga"). The Merger was effected pursuant to the
      terms of an Agreement and Plan of Merger ("Merger Agreement"), entered into on
      May 4, 2006, by and among Multi-Link, Auriga and Multi-Link Acquisition, Inc.
      a
      newly formed Delaware corporation and wholly-owned subsidiary of Multi-Link
      ("Subsidiary"). Pursuant to the terms of the Merger Agreement, the Subsidiary
      was merged with and into Auriga, with Auriga as the surviving entity. Auriga
      will continue its business under the name Auriga Laboratories, Inc. as a
      subsidiary of Multi-Link and will retain its Certificate of Incorporation and
      Bylaws. The officers and directors of Auriga prior to the Merger will remain
      the
      officers and directors of Auriga after the Merger. Following the Merger, the
      separate existence of Subsidiary ceased. Unless the context otherwise requires,
      "Company," "we," "our," or "us" shall refer to Multi-Link and Auriga on a
      combined basis.
Pursuant
      to the terms of the Merger Agreement, Multi-Link acquired all of the outstanding
      shares of Common Stock of Auriga ("Auriga Common Stock") for shares of Series A
      Convertible Preferred Stock, par value $0.01 per share of Multi-Link ("Preferred
      Stock"). At the closing of the Merger ("Closing"), in exchange for the Auriga
      Common Stock, Multi-Link issued to the stockholders of Auriga ("Auriga
      Stockholders") 1,000,042 shares of Preferred Stock which will be convertible
      into 494,977,491 shares of Multi-Link Common Stock ("Conversion Shares"). Each
      outstanding share of Auriga Common Stock was converted into the right to receive
      0.0606392 shares of Preferred Stock and each outstanding option and warrant
      to
      purchase one (1) share of Auriga Common Stock will be assumed by Multi-Link
      and
      was converted into an option or warrant to purchase 30.013762 shares of
      Multi-Link Common Stock (with the exercise price being adjusted accordingly).
1
At
      the
      Closing, Auriga had Common Stock, options and warrants issued and outstanding
      as
      follows:
·
16,490,990
                shares of Common Stock.
·
Options
                to purchase 3,021,000 shares of Common Stock at exercise prices ranging
                from $0.85 to $1.85 per share.
·
Warrants
                to purchase 4,257,283 shares of Common Stock at exercise prices ranging
                from $0.85 to $2.50 per share.
Each
      share of Preferred Stock will be convertible into 494.95677028 shares of
      Multi-Link's Common Stock. Accordingly, after the Closing, and assuming no
      Auriga Stockholder elects dissenter's rights, the Auriga Stockholders owned
      1,000,042 shares of Preferred Stock (equivalent to 494,977,491 shares of
      Multi-Link's Common Stock on an as-converted basis) and the current Multi-Link
      stockholders owned 37,215,913 shares of Multi-Link's Common Stock. Upon
      conversion of the Preferred Stock, the Auriga stockholders will own
      approximately 93% of the total outstanding shares of Multi-Link's Common Stock,
      and the current Multi-Link stockholders will own approximately 7% of the total
      outstanding shares of Multi-Link's Common Stock.
The
      ownership interests of the Auriga stockholders and the current Multi-Link
      stockholders will be subject to dilution upon exercise, if any, of the
      outstanding Auriga options and warrants that were assumed by Multi-Link in
      connection with the Merger. Accordingly, upon conversion of the Preferred Stock,
      the holders of Auriga's Common Stock, options and warrants will own
      approximately 95% of Multi-Link's Common Stock on a fully diluted basis, and the
      current Multi-Link stockholders will own approximately 5% of the Multi-Link's
      Common Stock on a fully diluted basis.
The
      Preferred Stock will immediately and automatically be converted into shares
      of
      Multi-Link's Common Stock (the "Mandatory Conversion") upon the approval by a
      majority of Multi-Link's stockholders (voting together on an
      as-converted-to-common-stock basis), following the Merger, of a 1 for 15 reverse
      stock split of Multi-Link's outstanding Common Stock ("Reverse Split").
The
      holders of shares of Preferred Stock are entitled to vote together with the
      holders of Multi-Link's Common Stock, as a single class, upon all matters
      submitted to holders of Common Stock for a vote. Each share of Preferred Stock
      is entitled to a number of votes equal to the number of shares of Common Stock
      issuable as if converted at the record date. As such, the Auriga stockholders
      have approximately 93% of the total combined voting power of all classes of
      Multi-Link stock entitled to vote.
2
Upon
      Mandatory Conversion of the shares of Preferred Stock, and subject to an
      adjustment of the Conversion Rate as a result of the Reverse Split, the Auriga
      stockholders will, in the aggregate, receive approximately 32,998,564 shares
      of
      Multi-Link's Common Stock. Upon completion of the Reverse Split, the current
      Multi-Link stockholders will own approximately 2,481,063 shares of Multi-Link's
      Common Stock. Therefore, the Auriga stockholders will own approximately 93%
      of
      the total outstanding shares of Multi-Link's Common Stock, and the current
      Multi-Link stockholders will own approximately 7% of the total outstanding
      shares of Multi-Link's Common Stock.
On
      a
      fully diluted basis, after the conversion of the Preferred Stock, the holders
      of
      Auriga's Common Stock, options and warrants will own approximately 95% of
      Multi-Link's Common Stock, and the current Multi-Link stockholders will own
      approximately 5% of the Multi-Link's Common Stock.
In
      connection with the Reverse Split, Multi-Link's board of directors may, in its
      discretion, provide special treatment to certain Multi-Link stockholders to
      preserve round lot holders (i.e., holders owning at least 100 shares) after
      the
      Reverse Split. In the event Multi-Link's board determines to provide such
      special treatment, Multi-Link stockholders holding 1,500 or fewer shares of
      Common Stock but at least 100 shares of Common Stock will receive 100 shares
      of
      Common Stock after the Reverse Split, and persons holding less than 100 shares
      of Common Stock would not be affected. The terms and conditions of special
      treatment afforded to Multi-Link stockholders to preserve round lot
      stockholders, if any, including the record dates for determining which
      stockholders may be eligible for such special treatment, will be established
      in
      the discretion of Multi-Link's board of directors.
Effective
      as of the Closing, Kevin R. Keating, Multi-Link's current sole officer and
      director, resigned such positions and the following were appointed as directors
      and officers:
·
Philip
                S. Pesin, Chairman, CEO and Chief Financial
                Officer
·
Dayne
                Wagoner, Secretary and Director
Additional
      information concerning Philip S. Pesin and Dayne Wagoner is set forth below.
Multi-Link
      plans to promptly seek approval from its stockholders to elect such other
      persons to the Board of Directors that may be designated by the Directors,
      reincorporate in Delaware, effect a 1 for 15 reverse stock split, adopt a stock
      incentive plan and change Multi-Link's corporate name to Auriga Laboratories,
      Inc. (collectively the "Actions"). At the Closing, KI Equity Partners I, LLC,
      and Auriga Stockholders holding at least a majority of the Preferred Stock
      received in the Merger, entered into a Voting Agreement, whereby the parties
      agreed to vote their shares of Multi-Link's voting securities to approve the
      Actions. The Voting Agreement terminates upon approval of the
      Actions.
As
      soon
      as commercially practicable following the Closing, Multi-Link has agreed to
      cause its board of directors to satisfy the independence, audit and compensation
      committee and other corporate governance requirements under the Sarbanes-Oxley
      Act of 2002, the rules and regulations promulgated by the SEC, and the
      requirements of either NASDAQ or American Stock Exchange ("AMEX") as selected by
      Multi-Link, whether or not Multi-Link's Common Stock is listed or quoted, or
      qualifies for listing or quotation, on such national exchanges.
3
At
      the
      Closing, Multi-Link entered into a Financial Advisory Agreement with Keating
      Securities, LLC ("Keating Securities"), a registered broker-dealer, pursuant to
      which Keating Securities was compensated by Multi-Link for its advisory services
      rendered to Multi-Link in connection with the Merger with Auriga. The
      transaction advisory fee was $340,000, which fee was paid at Closing. The
      Financial Advisory Agreement is attached as Exhibit 10.1 to this Form 8-K,
      and
      is incorporated herein by reference.
Kevin
      R.
      Keating is the father of Timothy J. Keating, the principal member of Keating
      Investments, LLC. Keating Investments, LLC is the managing member of KI Equity,
      which was the majority stockholder of Multi-Link, and Keating Securities, LLC,
      the registered broker-dealer affiliate of Keating Investments, LLC. Kevin R.
      Keating is not affiliated with and has no equity interest in Keating
      Investments, LLC, KI Equity or Keating Securities, LLC and disclaims any
      beneficial interest in the shares of Multi-Link's Common Stock owned by KI
      Equity. Similarly, Keating Investments, LLC, KI Equity and Keating Securities,
      LLC disclaim any beneficial interest in the shares of Multi-Link's Common Stock
      currently owned by Kevin R. Keating.
The
      issuance of the Preferred Shares and, upon conversion, the Conversion Shares
      to
      the Auriga Stockholders was exempt from registration under the Securities Act
      of
      1933, as amended (the "Securities Act"), pursuant to Section 4(2).
Except
      for the Merger Agreement and the transactions contemplated by that agreement,
      neither Multi-Link, nor its directors and officers, had any material
      relationships with Auriga, its officers, directors or principal
      stockholders.
Multi-Link
      and Auriga are headquartered in Norcross, Georgia and will continue to trade
      under the Multi-Link name and ticker symbol until the completion of the
      corporate name change to Auriga Laboratories, Inc. and the other
      Actions.
On
      March
      30, 2006, in its Current Report on Form 8-K dated March 30, 2006, Multi-Link
      reported the execution of a letter of intent to acquire Auriga. On May 5, 2006,
      in its Current Report on Form 8-K dated May 4, 2006, Multi-Link reported the
      entry into the Merger Agreement with Auriga and included a copy of the Agreement
      and Plan of Merger therein as Exhibit 2.1. On May 8, 2006, Multi-Link filed
      an
      Amended Current Report on Form 8-K. Additionally, on May 8, 2006, Multi-Link
      filed an Information Statement on Schedule 14f-1 reporting the proposed Merger
      of Auriga and the pending change of control of Multi-Link at the Closing. These
      Current Reports and Information Statement are hereby incorporated by
      reference.
4
BUSINESS
      OF MULTI-LINK
Prior
      to
      the Closing, Multi-Link was a public "shell" company with nominal assets whose
      sole business was to identify, evaluate and investigate various companies to
      acquire or with which to merge.
BUSINESS
      OF AURIGA
SUMMARY
      OF THE COMPANY
Auriga
      Laboratories, Inc. ("Auriga" or the "Company") was formed as a Delaware
      corporation in April 12, 2005 as part of a reorganization transaction involving
      several companies owned by the founders and is authorized to issue 50,000,000
      shares of $0.0001 par value common stock. In April 2005, all of the stock of
      Tryon Labs, Inc. (a Delaware corporation) and Auriga Pharmaceuticals, LLC (a
      Delaware limited liability corporation) was contributed to Auriga in exchange
      for stock in Auriga. As part of the reorganization transaction, Tryon Labs,
      Inc.
      changed its name to Auriga Development, Inc. and operates as a wholly-owned
      subsidiary engaged in drug development. Auriga Pharmaceuticals, LLC also became
      a wholly-owned subsidiary of Auriga.
Auriga
      is
      a specialty pharmaceutical company with stand-alone sales, marketing, and
      development capabilities. Auriga currently markets the Extendryl
®
family
      of
      products with approximately a 40-person sales force. Auriga has an exclusive
      license to the Extendryl
®
product
      line. Currently there are 7 separate products that fall under
      Extendryl
®
.
      This
      product line is indicated for treatment and relief of cough, cold and allergy
      symptoms. These products offer different combinations of antihistamines,
      expectorants, decongestants, anticholinergics, and anti-tussive that are
      designed to provide symptomatic relief for several patient types in the acute
      respiratory disease area.
Auriga
      plans to become a fully integrated pharmaceutical company by acquiring its
      own
      manufacturing and development capabilities. Since the launch of its first
      product line in August 2005, Auriga has achieved approximately $6.5 million
      in
      revenue. Moving forward, the Company will seek to acquire and/or in-license
      additional products and technologies to further grow revenues.
Over
      time, the Company plans on building three therapeutically focused product
      franchises in the areas of respiratory diseases, gastrointestinal (GI)
      disorders, and the central nervous system (CNS)/pain areas. The conceptual
      framework for this strategy is to initially acquire/license a mature product
      for
      each therapeutic area with brand equity that is no longer the primary focus
      of
      its originator. The Company has already done this in the respiratory space
      with
      its Extendryl
®
product
      line, but anticipates acquiring and/or developing a GI and CNS/pain product.
      These opportunities will then provide the impetus for further expansion of
      the
      sales force, allowing for additional promotional reach and geographic scope.
      Simultaneously, the Auriga development team, through collaboration with the
      Auriga commercial team, plans to identify and develop new products as well
      as
      enhance existing products with proprietary technologies in order to introduce
      additional products for each therapeutic division. In addition, the Company
      intends to file for regulatory approval for these newly developed products
      (and
      enhanced existing products) in order to achieve both regulatory and intellectual
      property (IP) exclusivity in the market.
5
Ultimately,
      as these therapeutic divisions expand and mature in the marketplace, Auriga
      plans to realize synergies between divisions and will be able to "cross-promote"
each division's products in an effort to enhance product launches, intensify
      promotion during seasonal peaks and react to competitive threats, among other
      things.
The
      Company currently operates out of two wholly-owned subsidiaries located in
      Atlanta, Georgia: Auriga Pharmaceuticals, LLC and Auriga Development, Inc.
      The
      Company's strategy is five-fold:
(i)
To
                focus on low-risk and short-term opportunities that can reach the
                market
                within short time frames in order to establish focused therapeutic
                divisions within the company
. 
                In general, Auriga is interested in pharmaceutical products that
                are
                already approved, or on the market, have a market presence and an
                established reputation in the medical community, but may no longer
                have
                patent protection.  Using its expertise, the Company plans to combine
                such drugs with patented reformulation and/or drug delivery or other
                technologies in an effort to produce unique product profiles with
                distinct
                market and/or clinical advantages.  These proprietary and potentially
                patented products will then be re-introduced to the market by leveraging
                the existing brand equity and patient base of the original product
                and the
                improved formulation and drug delivery technology which Auriga has
                added.
                Extendryl
®
is
                an example if this type of product and strategy.
(ii)
To
                attract co-promote partners and in-license
                opportunities.
Auriga anticipates that product additions may fund expansion of
                therapeutically-focused sales divisions and development of pipeline
                products and provide opportunities for the Company to co-promote
                with
                other products.
(iii)
To
                focus on low-risk and medium term opportunities that can reach the
                market
                within 48 months.
Products
                in this category of interest have been
previously
                approved, but may be able to be introduced to the market by making
                changes
                in the delivery route or dosing schedule of the drug. By utilizing
                the
                505(b)(2) regulatory approval pathway within Food & Drug
                Administration (the "FDA"), Auriga hopes to introduce well-known products
                with renewed market exclusivity upon approval.
Auriga
                is currently working on a pain product that is the most widely prescribed
                drug combination in the U.S. By applying a rapid-dissolve technology
                to
                the product, Auriga hopes to be able to introduce this product within
                an
                expected FDA approval time frame of 48 months and possibly recapture
                a
                portion of this annual 100 million prescription
                market.
(iv)
To
                develop a proprietary patent portfolio to protect therapeutic categories
                Auriga desires to enter
.
                Auriga is aggressively working with its regulatory and intellectual
                property attorneys in an effort to file and secure patent claims
                in the
                United States covering product inventions and innovations that it
                believes
                are unique. These patents, if issued and ultimately found to be valid,
                may
                enable Auriga to create a barrier to entry for any competitors in
                the
                United States market (in addition to regulatory exclusivity provided
                by
                FDA approval).
6
(v)
To
                identify and develop new products utilizing known chemical entities
                combined with proprietary delivery technologies for use in new disease
                areas/indications for that chemical entity.
By
                identifying high value markets with unmet or under-met needs and
                developing products to serve those needs, the company may yield
                significant franchise value through product introduction with both
                regulatory and IP exclusivity in the market. Currently, the Company
                is
                working on delivering fluticasone, a highly effective topical steroid
                used
                in asthma and dermatology, to the colon and lower intestine for use
                in
                treating Crohn's disease, which represents approximately a $1.3 billion
                market according to The 2004 IMS Year in Review for the U.S. Prescription
                Market.
DEVELOPMENT
      PROJECTS
On
      April
      10, 2006, the Company signed a development agreement with Balchem Corporation
      to
      develop an orally dissolving tablet (ODT) combination of acetaminophen and
      hydrocodone (HC/APAP) (the "Balchem Agreement"). This combination represents the
      most widely prescribed class of pain management medication in the U.S. as
      measure by dispensed prescriptions. In 2005, approximately 130 million
      prescriptions of HC/APAP combinations were dispensed in the U.S. market
      according to the 2004 IMS National Prescription Audit. By utilizing a
      taste-masking technology, combined with a rapid, orally dissolving tablet (ODT)
      form, and filing for regulatory approval using the 505(b)(2) pathway, the
      Company believes commercial launch with exclusivity may be accomplished in
      approximately 2-3 years. Originally developed for use in the food industry,
      the
      pharmaceutical applications of this taste-masking technology may offer a
      innovative and unique solution to the problem of taste masking that may give
      Auriga's products a competitive advantage over its competitors if Auriga is
      successful in obtaining the license to this technology. Additionally, the
      manufacturing costs of the taste-masking technology are expected to be lower
      than traditional taste-masking methods further affording a marketing advantage
      in addition to potentially higher margins to Auriga.
Under
      the
      Balchem Agreement, the Company retained Balchem to scale up and validate the
      Balchem taste masking technology for use with Company products.  No new
      development is anticipated, and Balchem will continue to own all intellectual
      property in its technology.  If any new development becomes necessary, a
      separate development agreement that takes into account ownership and or use
      rights of the new development will be negotiated between the
      parties.
The
      Balchem Agreement remains in force until December 31, 2007, and may be renewed
      by mutual agreement of the parties.  Either party may terminate the Balchem
      Agreement if the other party commits an uncured material breach or becomes
      bankrupt. The maximum compensation to be paid to Balchem under the Balchem
      Agreement is $165,000, $140,000 of which is dependent on Balchem meeting certain
      milestones and requirements. The Balchem Agreement contains industry standard
      terms and conditions with respect to warranty, indemnity, limitation of
      liability and miscellaneous provisions.  A separate license and supply
      agreement will be negotiated by the parties to allow Company to use the Balchem
      technology with its products. There can be no assurance that the Company will
      be
      able to license the Balchem technology or enter into a license agreement on
      acceptable terms. The Balchem Agreement is attached hereto as Exhibit
      10.13.
7
Auriga
      plans to launch in Fall 2006 two line extensions to the Extendryl® family of
      products. Auriga has already identified a manufacturer and formulations for
      these products. These new line extensions will bring the total number of
      products sold under the Extendryl® name to nine.
Auriga's
      current development pipeline opportunities have been prioritized according
      to
      market size, un-addressed market needs, availability of differentiating drug
      delivery technologies, and potential for market approval within 36 months of
      the
      start of development. We have identified product opportunities in the
      respiratory, pain/CNS and GI therapeutic areas.
Auriga
      is
      currently working on applying an internally developed (and patent pending)
      delivery technology that combines rapid dissolve and extended release (ER/RD)
      formulation of drug product. While both of these delivery methods are prevalent
      in the pharmaceutical market, utilization of both in the same product is
      reasonably unique. Auriga plans on developing an ER/RD form of its Extendryl
      Jr
      product. This product is used for pediatric cough/cold and fits very nicely
      within Auriga's respiratory franchise growth plan. Formulation development is
      near completion, prototype production is currently expected in the third quarter
      of 2006, patents for the technology have been filed in the United States, and
      commercial launch is currently planned for fall 2007.
In
      the
      area of gastrointestinal ("GI") diseases, a market that Auriga's management
      believes is attractive for drug reformulations, Auriga plans to focus its
      initial development activities on inflammatory diseases of the bowel such as
      Ulcerative Colitis and Crohn's disease. Auriga believes that is has currently
      identified formulations that can achieve colonic delivery of anti-inflammatory
      agents that may offer a reduction in the side effects typically associated
      with
      these drugs. This is of particular importance for drugs such as steroids, which
      offer superior efficacy in suppressing GI inflammation. However, because
      inflammatory bowel diseases often require long term or chronic treatment, the
      benefit of steroids has been sharply limited by side effects which can include
      significant weight gain, damage to adrenal glands and other vital organs,
      diminished bone mass density, increased susceptibility to infection, and
      elevated blood cholesterol levels. While industry analysts estimate the market
      for GI anti-inflammatory products to be in excess of $1.3 billion, the largest
      part of this market is attributable to the 5-acetylsalicylic acid (5-ASA) based
      drugs, despite their limited efficacy. In light of this, the Company believes
      that the introduction of an effective topically-delivered steroid to the colon
      may achieve an acceptable share of this market and possibly expand the overall
      size of the market as well.
Through
      partnerships with third parties, Auriga has access to several proprietary drug
      delivery technologies. These technologies include those that achieve oral
      controlled release, rapid dissolve/taste masking, and buccal absorption
      (absorption by the lining cells in the oral cavity). Access to such technologies
      comes from the Company's experience, knowledge base and networks in the drug
      delivery field. In general, the strategy of Auriga will be to license
      technologies from specialty drug delivery companies for specific product
      applications and to lever the experience of such companies for Auriga's product
      development. Auriga anticipates that the initial products in its currently
      planned development pipeline will use technologies that have regulatory
      approvals and well-established histories in the market. In some cases the
      Company believes that it has unique access to certain technologies as a result
      of its initial involvement in their development. Auriga's intellectual property
      strategy attempts to ensure that new products are protected by composition
      of
      matter, use and process patents while providing freedom to operate in the market
      place.
8
Auriga's
      product development strategy is to make improvements to drugs that have already
      been approved and thereby significantly reduce overall development risk. Filings
      for regulatory approval will use the 505 (b)(2) New Drug Application ("NDA")
      pathway that allows use of historical data on drug efficacy and safety thus
      reducing the overall development time. Auriga plans to further manage
      development risk through a tiered approach that initially launches product
      line
      extensions of existing brands followed by new products that apply new delivery
      approaches to approved drugs. Subsequently, Auriga anticipates that new products
      that address new clinical indications for approved drugs can be
      developed.
PRODUCT
      PORTFOLIO
Extendryl®:
Auriga
      has an exclusive license to the Extendryl
®
product
      line. Currently there are 7 separate products that fall under
      Extendryl
®
.
      This
      product line is indicated for treatment and relief of cough, cold and allergy
      symptoms. These products offer different combinations of antihistamines,
      expectorants, decongestants, anticholinergics, and anti-tussive that are
      designed to provide symptomatic relief for several patient types in the acute
      respiratory disease area. The Extendryl
®
product
      line consists of the following separate products:
Extendryl®
      HC - (
1,000mg
      Guaifenesin, 10mg hydrocodone)
Extendryl®
      Sr - (
8mg
      chlorphenaramine, 20mg phenylepherine, 2.5mg methscopolamine)
Extendryl®
      JR- (
4mg
      chlorphenaramine, 10mg phenylepherine, 1.25mg methscopolamine)
Extendryl®
      pse- (
120mg
      psuedoephederine, 2.5mg methscopolamine)
extendryl®
      dm- (
8mg
      chlorphenaramine, 30mg dextromethorphan, 2.5mg methscopolamine)
extendryl®
      chews- (
4mg
      chlorphenaramine, 10mg phenylepherine, 1.25mg methscopolamine)
extendryl
      ®syrup- (
4mg
      chlorphenaramine, 10mg phenylepherine, 1.25mg methscopolamine)
Extendryl
®
products
      are manufactured for the Company by Sovereign Pharma and Provident
      Pharmaceuticals. The Company has not obtained specific regulatory approval
      from
      the Food and Drug Administration ("FDA").
9
Currently,
      an FDA program allows the Company, in its opinion, to manufacture and market
      its
      current Extendryl® products, without going through the formal approval process
      of submitting an NDA with safety and efficacy data. The Company believes its
      current Extendryl® products are governed by a special regime established by a
      string of legislation spanning from 1938 through 1984 and administrative
      guidance as recent as 2003. Prior to 1938, drugs could be marketed in the U.S.
      as long as a drug's label did not present false information regarding the drug's
      strength and purity. The Federal Food, Drug and Cosmetic Act of 1938 (the "Act")
      required the manufacturer to prove the
safety
of a
      drug before introducing it to the market. In 1962, the Act was amended to
      further require the manufacturer to prove new drugs were
effective
as well.
      The FDA then undertook a Drug Efficacy Study Implementation program ("DESI") for
      all drugs approved between 1938 and 1962, allowing these drugs to remain on
      the
      market while evidence of their effectiveness was reviewed. These pre-1962 drugs
      are commonly referred to as DESI Drugs. While the FDA may consider Auriga's
      products to be new drugs, it has indicated its intent to exercise enforcement
      discretion and not pursue regulatory action for DESI drugs, such as Auriga's
      Extendryl® products, unless certain conditions occur. If these conditions were
      to materialize, or the FDA disagreed with Auriga's conclusions about the
      regulatory status of these products, Auriga might be required to submit an
      NDA
      and/or cease marketing until the FDA grants approval to do so.
SALES
      & MARKETING STRATEGY
The
      Company has executed the first stage of its commercialization strategy by
      acquiring an established, branded prescription product line
      (Extendryl
®
)
      and
      deploying a therapeutically (respiratory) focused 40-person sales force focused
      on influencing the prescribing habits of physicians through promotion and
      building relationships with high prescribing targets. This initial stage has
      yielded a revenue base of $6.5 million that provides current revenues to Auriga
      that management anticipates will at least partially support product acquisitions
      and development.
In
      essence, the sales and marketing strategy for Auriga can be described as a
"high
      compression" promotional effort. Our sales and marketing team will attempt to
      identify those physician offices that offer the highest potential return for
      promotional effort; these targeted physicians will then receive promotion in
      the
      form of:
1.
Frequent
                personal sales calls from Auriga
                representatives
2.
Drug
                samples
3.
Promotional
                and clinical materials designed to support clinical rationale for
                use of
                Auriga products
4.
Peer-to-peer
                educational conferences/meetings.
5.
Journal
                Advertising
The
      key
      to this strategy will be to only focus on the most productive prescribers who
      respond to promotional efforts. The Company's sales analytics team will attempt
      to track prescribing response to promotional activities which should result
      in a
      continuous adjustment of targeting and concentration of promotional
      activities.
The
      Auriga team will also endeavor to ensure that sufficient product stock is
      established and maintained within both wholesale and retail distribution outlets
      so any demand created by the sales force can be met with adequate supply in
      the
      market.
10
As
      Auriga
      attempts to build a broader product portfolio for its respiratory sales
      division, the executive team currently intends to simultaneously seek product
      opportunities in the CNS/Pain and GI therapeutic areas in order to begin
      building additional sales teams to focus on these additional therapeutic areas.
      As it moves into additional therapeutic areas, Auriga will execute the same
      organizational structure evolution process and sales and marketing plan for
      each
      subsequent therapeutic division.
PATENTS
      AND PROPRIETARY RIGHTS
Auriga's
      success depends in part on its ability to:
-
      Obtain
      patents;
-
      Protect
      trade secrets;
-
      Operate
      without infringing the proprietary rights of others; and
-
      Prevent
      others from infringing on its proprietary rights.
In
      addition to filing its own patents, Auriga will obtain licenses to patents
      and
      patent applications and other proprietary rights from others.
The
      Company has two patent applications presently pending in the United States
      Patent and Trademark Office and plans to use Patent Cooperation Treaty filings
      in an attempt to expand coverage of the pending U.S. patent applications to
      individual countries outside the U.S. at appropriate times as it sees
      fit.
Auriga's
      initial patent application is on sequential release formulations of
      cough/cold/allergy actives designed to orchestrate the effectiveness of their
      pharmacologic action.
Auriga's
      second patent application describes what it believes is a novel mixed-release
      tablet formulation containing cough/cold therapeutic agents that dissolves
      rapidly in the mouth and provides continuous (immediate and extended) dosing
      for
      8-12 hours.
Development
      of the Company's GI product will use licensed technology that is covered by
      multiple U.S. and European patents with coverage up to 2021.
The
      Company primarily protects its proprietary information by filing U.S. and
      foreign patent applications related to its proprietary technology, inventions
      and improvements. Proprietary rights relating to the Company's technologies will
      be protected from unauthorized use by third parties only to the extent that
      they
      are covered by valid and enforceable patents or are effectively maintained
      as
      trade secrets. The strength and breadth of patent positions of pharmaceutical
      companies are extremely complex and uncertain. The scope and extent of the
      Company's patent protections for some of its products, including the Extendryl®
line are particularly uncertain because formulations for the actives in this
      product line have existed in the public domain for many years, some of which
      have patent protection. With respect to fluticasone, other parties have been
      granted patents on methods for producing the drug, specific formulations, and
      the methods of treatment or use. The publication of this information limits
      the
      scope of any patents the Company is seeking and may prevent it from obtaining
      any meaningful patent protection. The Company cannot assure you that any patents
      that it is seeking, or that are licensed to it, will afford protection against
      competitors. Nor can the Company assure you that any patent applications will
      result in patents being issued.
11
In
      addition, the laws of certain foreign countries do not protect the Company's
      intellectual property rights to the same extent as do the laws of the United
      States. The patent position of pharmaceutical companies involves complex legal
      and factual questions. The Company cannot predict whether the intellectual
      property laws of foreign countries will be enforceable. The Company cannot
      assure you that any of its patents or patent applications, if issued, will
      not
      be challenged, invalidated or designed around. Nor can the Company assure you
      that the patents will provide proprietary protection or competitive advantages
      to it. Furthermore, the Company cannot assure you that others will not
      independently develop similar technologies or duplicate any technology developed
      by it.
Auriga's
      commercial success depends significantly on its ability to operate without
      infringing the patents and other proprietary rights of third parties. The
      Company cannot assure you that its technologies do not and will not infringe
      the
      patents or violate other proprietary rights of third parties. In the event
      any
      of the Company's technologies are found to infringe or violate the intellectual
      property rights of others, the Company may be prevented from pursuing research,
      development or commercialization of its products.
There
      has
      been extensive litigation regarding patents and other intellectual property
      rights in the biotechnology and pharmaceutical industries. The defense and
      prosecution of intellectual property suits and related legal and administrative
      proceedings in the United States and abroad involve complex legal and factual
      questions. These proceedings are costly and time-consuming to pursue and their
      outcome is uncertain. Litigation may be necessary to enforce patents issued
      to
      or licensed by the Company, to protect trade secrets or know-how owned or
      licensed by it and to determine the enforceability, scope and validity of the
      proprietary rights of others.
The
      Company will incur substantial expense and be forced to divert significant
      effort and resources of its technical and management personnel in the event
      it
      must prosecute or defend any litigation or other administrative proceeding.
      If
      an adverse determination were made, the Company could incur significant
      liabilities to third parties or be required to seek licenses which may not
      be
      available from third parties or may be prevented from selling its products
      in
      certain markets, if at all. Although patent and intellectual property disputes
      are often settled through licensing or similar arrangements, costs associated
      with these arrangements may be substantial and could include ongoing royalties.
      Furthermore, the Company cannot assure you that the necessary licenses would
      be
      available to it on satisfactory terms, if at all.
In
      addition to patents, the Company relies on trade secrets and proprietary
      know-how, which it seeks to protect, in part, through confidentiality agreements
      with some of its employees. The Company cannot assure you that these
      confidentiality or proprietary information agreements will meaningfully protect
      its technology or provide it with adequate remedies in the event of unauthorized
      use or disclosure of this information. Nor can the Company assure you that
      the
      parties to these agreements will not breach these agreements or that its trade
      secrets will not otherwise become known to or be independently developed by
      competitors.
12
RISK
      FACTORS
You
      should consider carefully the following Risk Factors and all other information
      set forth in this Report before making an investment in the Company. Investing
      in Auriga involves a high degree of risk. Any of the following risks could
      materially harm Auriga's business and could result in a complete loss of your
      investment.
RISKS
      RELATED TO THE BUSINESS
THE
      REGULATORY STATUS OF SOME OF AURIGA'S PRODUCTS MAKES THESE PRODUCTS SUBJECT TO
      INCREASED COMPETITION AND OTHER RISKS
The
      regulatory status of Auriga's products may allow third parties to more easily
      introduce competitive products, and may make it more difficult for the Company
      to sell its products in the future. Currently, an FDA program allows the
      Company, in its opinion, to manufacture and market its products, and permits
      others to manufacture and market similar products, without submitting safety
      or
      efficacy data. With respect to the Company's current products, the Company does
      not hold rights in patents protecting it against such competitive pressures.
      This results in increased competition because other companies can enter the
      market without having to submit safety and efficacy data to sell competing
      products. On several occasions, the FDA has considered changing the
      classification of certain single entity and combination product types of drugs
      from prescription to over-the-counter use, and which permit sponsors to utilize
      foreign over-the-counter experience data to establish a product as safe and
      effective for over-the-counter use in the U.S. If the FDA does change the
      classification, we might have to reformulate certain of the Company's products
      or submit safety and efficacy data on those products, which could be costly,
      or
      the Company might have to discontinue selling certain products if the FDA does
      not approve any marketing application filed by it.
In
      addition, the FDA considers certain products to be new drugs, but has indicated
      its intent to exercise enforcement discretion and not pursue regulatory action
      unless certain conditions occur. If these conditions were to materialize, or
      the
      FDA disagreed with the Company's conclusions about the regulatory status of
      these products, the Company might be required to submit an NDA and/or cease
      marketing until the FDA grants approval to do so. The FDA could also, at any
      time, promulgate new regulations or policies to require the submission of an
      NDA
      for each of these products.
FURTHER
      FINANCING CANNOT BE GUARANTEED.
It
      is
      likely that Auriga will need to raise additional capital in order to meet its
      business plan, and the required additional financing may not be available on
      terms acceptable to Auriga, or at all. There can be no assurances that Auriga's
      anticipated future financings will occur, or that such financings will be
      available on acceptable terms. No one should rely on the prospect of future
      financings in evaluating Auriga.
13
ABILITY
      TO OBTAIN OR SUSTAIN MARKET ACCEPTANCE FOR AURIGA'S SERVICES AND
      PRODUCTS.
Failure
      to establish a brand and presence in the marketplace on a timely basis could
      adversely affect the financial condition and operating results of Auriga.
      Moreover, Auriga cannot be sure that it will successfully complete the
      development and introduction of new products or product enhancements or that
      any
      new products developed will achieve acceptance in the marketplace. It may also
      fail to develop and deploy new products and product enhancements on a timely
      basis.
In
      addition, a material component of Auriga's revenue to date has been used, and
      Auriga anticipates will be used in the future, by
its
      customers, who may include wholesalers/distributors, retail pharmacies and
      hospitals,
for
      the
      purpose of accumulating inventory. This inventory held by Auriga's customers is
      subject to the standard returns policies of the Company and its distributors.
      Some or even a material component of Auriga's revenue to date, and any revenues
      it generates in the future, could be significantly adversely impacted due to
      returns as a result of insufficient demand in the marketplace or product
      expiration dating. Such product returns and the resulting financial impact
      could
      have a
material
      adverse effect on the operations and financial condition of the Company if
      such
      product returns exceed established reserves for anticipated product
      returns.
THE
      COMPANY'S BUSINESS IS HEAVILY REGULATED BY GOVERNMENTAL AUTHORITIES, AND FAILURE
      TO COMPLY WITH SUCH REGULATION OR CHANGES IN SUCH REGULATIONS COULD NEGATIVELY
      AFFECT OUR RESULTS
Many
      government authorities regulate our business, including, among others, the
      FDA,
      the SEC, foreign regulatory authorities, the Drug Enforcement Administration,
      the Consumer Product Safety Commission, the Federal Trade Commission, the
      Occupational Safety and Health Administration, the Department of Health &
Human Services, the Centers for Medicare and Medicaid Services, the
      Environmental Protection Agency, the Department of Labor, state, local and
      foreign governments and the Internal Revenue Service. We may incur significant
      expenses to comply with regulations imposed by these authorities. Also, our
      future results could be negatively impacted by changes in governmental
      regulation over the pharmaceutical industry, including regulation of Medicare,
      Medicaid and similar programs, by reducing our revenue and profits and/or
      increasing our costs and expenses in order to comply with such regulation.
      In
      addition, all of our third-party manufacturers, third-party sample distributors
      and product packaging companies are subject to inspection by the FDA and, in
      appropriate cases, the Drug Enforcement Administration and foreign regulators.
      If our third-party manufacturers and other supply and distribution chain
      partners do not comply with FDA regulations in the future, they may not deliver
      products to us or deliver samples to our representatives, or we may have to
      recall products. Even if deficiencies observed by the FDA do not relate to
      our
      products, our third-party manufacturers, third-party sample distributors and
      product packaging companies may be delayed in manufacturing and supplying our
      products to us in a timely manner until they address their compliance issues
      with the FDA.
14
THE
      MARKET FOR PRODUCTS AND SERVICES IN THE PHARMACEUTICALS INDUSTRY IS COMPETITIVE;
      AURIGA MAY NOT BE ABLE TO COMPETE SUCCESSFULLY.
The
      market for products and services in the pharmaceuticals industry is highly
      competitive. Most of these competitors have longer operating histories and
      significantly greater financial, technical, marketing and other resources than
      Auriga, and may be able to respond more quickly than Auriga can to new or
      changing opportunities and customer requirements. Also, the competitors have
      greater name recognition and more extensive customer bases that they can
      leverage to gain market share. These competitors are able to undertake more
      extensive promotional activities, adopt more aggressive pricing policies and
      offer more attractive terms to purchasers than Auriga can.
LOSS
      OF
      KEY EXECUTIVES AND FAILURE TO ATTRACT QUALIFIED MANAGEMENT COULD LIMIT AURIGA'S
      GROWTH AND NEGATIVELY IMPACT AURIGA'S OPERATIONS.
Auriga
      depends highly upon its senior management team. It will continue to depend
      on
      operations management personnel with pharmaceutical and scientific industry
      experience. At this time, Auriga does not know the availability of such
      experienced management personnel or how much it may cost to attract and retain
      such personnel. The loss of the services of any member of senior management
      or
      the inability to hire experienced operations management personnel could have
      a
      material adverse effect on the operations and financial condition of
      Auriga.
DEPENDENCE
      ON COLLABORATORS.
Auriga
      relies on various third parties for certain aspects of the development,
      manufacture and promotion of the Company's present and planned products. There
      can be no assurance that Auriga will be able to enter into future collaborative
      arrangements on favorable terms, or at all. Even if Auriga is successful in
      entering into such collaborative agreements, there can be no assurance that
      any
      such arrangement will be successful. The success of any such arrangement is
      dependent on, among other things, the skills, experience and efforts of the
      third party's employees responsible for the project, the third party's
      commitment to the arrangement, and the financial condition of the third party,
      all of which are beyond the control of the Company.
RESULTS
      OF OPERATIONS MAY BE AFFECTED BY CHANGING MARKET PRICES AND/OR REQUIREMENTS
      FOR
      PHARMACEUTICALS.
Auriga's
      results of operations may be affected by changing resale prices or market
      requirements for pharmaceuticals, some of which are priced on a commodity basis.
      The sale price, and market demand for, these materials can be volatile due
      to
      numerous factors beyond Auriga's control, which may cause significant
      variability in its period-to-period results of operations.
15
RESULTS
      OF OPERATIONS WILL FLUCTUATE.
Auriga's
      revenues and results of operations will vary from quarter to quarter in the
      future. A number of factors, many of which are outside of Auriga's control, may
      cause variations in Auriga's results of operations, including:
·
demand
                and price for Auriga's products;
·
the
                timing and recognition of product
                sales;
·
unexpected
                delays in developing and introducing
                products;
·
unexpected
                delays in manufacturing Auriga's
                products;
·
increased
                expenses, whether related to marketing, product development or
                administration or otherwise;
·
insufficient
                demand in the marketplace could cause Auriga's distributors to return
                product;
·
the
                mix of revenues derived from
                products;
·
the
                hiring, retention and utilization of personnel;
                and
·
general
                economic factors.
IF
      PHYSICIANS AND PATIENTS DO NOT ACCEPT AURIGA'S CURRENT OR FUTURE PRODUCTS,
      AURIGA MAY BE UNABLE TO GENERATE SIGNIFICANT REVENUE, IF ANY.
The
      products Auriga currently markets, or products that it may develop or acquire
      in
      the future, could fail to gain market acceptance among physicians, health care
      payors, patients and the medical community. Physicians may elect not to
      recommend these drugs for a variety of reasons including:
·
timing
                of market introduction of competitive
                drugs;
·
lower
                demonstrated clinical safety and efficacy compared to other
                drugs;
·
lack
                of cost-effectiveness;
·
lack
                of availability of reimbursement from managed care plans and other
                third-party payors;
·
convenience
                and ease of administration;
·
prevalence
                and severity of adverse side
                effects;
·
other
                potential advantages of alternative treatment methods;
                and
·
ineffective
                marketing and distribution support.
If
      Auriga's products fail to achieve market acceptance, Auriga would not be able to
      generate significant revenue.
16
NO
      ASSURANCE OF ADEQUATE THIRD-PARTY REIMBURSEMENTS
The
      Company's ability to commercialize successfully its products under development
      or under consideration for acquisition or license is dependent in part on the
      extent to which appropriate levels of reimbursement for the
      Extendryl
®
products
      are obtained from government authorities, private health insurers, and managed
      care organizations such as health maintenance organizations or HMOs. The Company
      estimates that significant portion of its cumulative Extendryl
®
revenue
      may be subjected to the reimbursement rules of such organizations. Managed
      care
      organizations and other third-party payors are increasingly challenging the
      pricing of pharmaceutical products. The trend toward managed healthcare in
      the
      United States, the growth of organizations such as HMOs, and legislative
      proposals to reform healthcare and government insurance programs could
      significantly influence the purchase of pharmaceutical products, resulting
      in
      lower prices and reduced demand for Extendryl
®
or
      the
      Company's products under development or under consideration for acquisition or
      license. Such cost containment measures and potential legislative reform could
      affect the Company's ability to sell Extendryl
®
,
      or its
      products under development or consideration for acquisition or license and
      may
      have a material adverse effect on the Company. Significant uncertainty exists
      about the reimbursement status of newly approved pharmaceutical products.
      Although the Company has obtained approvals for reimbursement for the cost
      of
      Extendryl
®
from
      many
      third-party payors, such approvals, in the United States and in foreign
      countries, may be discontinued for Extendryl
®
or
      any of
      the Company's products under development or under consideration for acquisition
      or license. The unavailability or inadequacy of third-party reimbursement for
      Extendryl
®
,
      or
the
      Company's products under development or to be acquired or licensed
,
      may
      reduce the demand for, or negatively affect the price of, these products, which
      would have a material adverse effect on the Company.
There
      have been, and the Company expects that there will continue to be, federal
      and
      state proposals to constrain expenditures for medical products and services,
      which may affect payments for any of its approved products. The Centers for
      Medicare and Medicaid Services frequently change product descriptors, coverage
      policies, product and service codes, payment methodologies and reimbursement
      values. Third-party payors often follow Medicare coverage policy and payment
      limitations in setting their own reimbursement rates and may have sufficient
      market power to demand significant price reductions. As a result of actions
      by
      these third-party payors, the health care industry is experiencing a trend
      toward containing or reducing costs through various means, including lowering
      reimbursement rates, limiting therapeutic class coverage and negotiating reduced
      payment schedules with service providers for drug products.
The
      Company's inability to promptly obtain coverage and profitable reimbursement
      rates from government-funded and private payors for any approved products could
      have a material adverse effect on its operating results and its overall
      financial condition.
RECENT
      FEDERAL LEGISLATION WILL INCREASE THE PRESSURE TO REDUCE PRICES OF
      PHARMACEUTICAL PRODUCTS PAID FOR BY MEDICARE, WHICH COULD ADVERSELY AFFECT
      AURIGA'S REVENUES, IF ANY.
The
      Medicare Prescription Drug Improvement and Modernization Act of 2003, or MMA,
      changes the way Medicare will cover and pay for pharmaceutical products. The
      legislation expanded Medicare coverage for drug purchases by the elderly and
      eventually will introduce a new reimbursement methodology based on average
      sales
      prices for drugs. In addition, this legislation provides authority for limiting
      the number of drugs that will be covered in any therapeutic class. As a result
      of this legislation and the expansion of federal coverage of drug products,
      Auriga expects that there will be additional pressure to contain and reduce
      costs. These cost reduction initiatives and other provisions of this legislation
      could decrease the coverage and price that Auriga receives for any approved
      products and could seriously harm its business. While the MMA applies only
      to
      drug benefits for Medicare beneficiaries, private payors often follow Medicare
      coverage policy and payment limitations in setting their own reimbursement
      rates, and any reduction in reimbursement that results from the MMA may result
      in a similar reduction in payments from private payors.
17
ACQUISITION
      OF PRODUCTS
As
      part
      of the Auriga's growth strategy, Auriga intends to acquire and develop
      additional product candidates or approved products. The success of this strategy
      depends upon Auriga's ability to identify, select and acquire pharmaceutical
      products that meet the criteria it has established. Any product candidate the
      Company acquires or licenses may require additional research and development
      efforts prior to commercial sale, including extensive pre-clinical and/or
      clinical testing and approval by the FDA and corresponding foreign regulatory
      authorities. All product candidates are prone to the risks of failure inherent
      in pharmaceutical product development, including the possibility that the
      product candidate will not be safe, non-toxic and effective or approved by
      regulatory authorities. In addition, Auriga cannot assure that any approved
      products that it develops, acquires or licenses will be manufactured or produced
      economically; successfully commercialized; widely accepted in the marketplace
      or
      that Auriga will be able to recover its significant expenditures in connection
      with the development, acquisition or license of such products. In addition,
      proposing, negotiating and implementing an economically viable acquisition
      or
      license is a lengthy and complex process. Other companies, including those
      with
      substantially greater financial, marketing and sales resources, may compete
      with
      Auriga for the acquisition or license of product candidates and approved
      products. Auriga may not be able to acquire the rights to additional product
      candidates and approved products on terms that it finds acceptable, or at all.
      In addition, if Auriga acquires or licenses product candidates from third
      parties, Auriga will be dependent on third parties to supply such products
      to
      Auriga for sale. Auriga could be materially adversely affected by the failure
      or
      inability of such suppliers to meet performance, reliability and quality
      standards.
AURIGA
      MAY ENGAGE IN STRATEGIC TRANSACTIONS THAT FAIL TO ENHANCE STOCKHOLDER VALUE.
From
      time
      to time, Auriga may consider possible strategic transactions, including the
      potential acquisitions or licensing of products, technologies and companies,
      and
      other alternatives with the goal of maximizing stockholder value. Auriga will
      continue to evaluate potential strategic transactions and alternatives that
      Auriga believes may enhance stockholder value. Auriga may never complete a
      strategic transaction(s) and in the event that Auriga does complete a strategic
      transaction(s), it may not be consummated on terms favorable to Auriga. Further,
      such transactions may impair stockholder value or otherwise adversely affect
      Auriga's business. Any such transaction may require Auriga to incur
      non-recurring or other charges and may pose significant integration challenges
      and/or management and business disruptions, any of which could harm Auriga's
      results of operation and business prospects.
18
AURIGA
      MAY BE EXPOSED TO LITIGATION.
Since
      Auriga will participate in the pharmaceuticals industry, Auriga may be subject
      to liability claims by employees, customers, end users and third parties. Auriga
      intends to have proper insurance in place, however, there can be no assurance
      that any liability insurance Auriga has or purchases will be adequate to cover
      claims asserted against Auriga or that Auriga will be able to maintain such
      insurance in the future. Management believes Auriga intends to adopt or has
      adopted prudent risk management programs to reduce these risks and potential
      liabilities; however, there can be no assurance that such programs if, and
      when
      adopted, will fully protect Auriga. Adverse rulings in any legal matters,
      proceedings and other matters could have a material adverse effect on
      Auriga.
RISK
      OF
      PRODUCT LIABILITY CLAIMS; NO ASSURANCE OF ADEQUATE INSURANCE.
Manufacturing,
      marketing, selling, and testing Extendryl
®
,
      and
      Auriga's products under development or to be acquired or licensed, entails a
      risk of product liability. The Company could be subject to product liability
      claims in the event that its products or products under development fail to
      perform as intended. Even unsuccessful claims could result in the expenditure
      of
      funds in litigation and the diversion of management time and resources and
      could
      damage the Auriga's reputation and impair the marketability of its products.
      While the Company currently maintains liability insurance, the Company may
      not
      be able to maintain such insurance at a commercially reasonable cost. If a
      successful claim were made against the Company, and the amount of insurance
      were
      inadequate to cover the costs of defending against or paying such a claim,
      or
      the damages payable by Auriga, the Company would experience a material adverse
      effect on its business, financial condition, and results of
      operations.
AURIGA'S
      BUSINESS IS HEAVILY REGULATED BY GOVERNMENTAL AGENCIES
Auriga
      is
      subject to extensive regulation by the FDA, the Drug Enforcement Administration,
      and state government agencies. The Federal Food, Drug and Cosmetic Act, the
      Controlled Substances Act and other federal statutes and rules regulate the
      testing, manufacture, packaging, labeling, storage, record keeping, promotion,
      distribution, and sale of the Company's products. If the Company or its
      manufacturers fail to comply with those regulations, it could become subject
      to
      significant penalties or claims, which could materially and adversely affect
      its
      operating results or its ability to conduct its business. In addition, the
      adoption of new regulations or changes in the interpretations of existing
      regulations may result in significant compliance costs or discontinuation of
      product sales and may adversely affect our revenue and the marketing of Auriga's
      products.
In
      accordance with the Federal Food, Drug and Cosmetic Act and FDA regulations,
      the
      manufacturing processes of the Company's third party manufacturers must also
      comply with current good manufacturing practices ("cGMPs"). The FDA inspects the
      facilities of the Company's third party manufacturers periodically to determine
      if such third party manufacturers are complying with GMPs. The FDA may implement
      additional regulations with which the Company would have to comply, which would
      increase its expenses.
19
Auriga's
      business is also subject to regulation under state, federal and local laws,
      rules, regulations, and policies relating to the protection of the environment
      and health and safety, including those governing the use, generation,
      manufacture, storage, air emission, effluent discharge, handling, and disposal
      of certain materials. Auriga believes that it is in compliance in all material
      respects with all such laws, rules, regulations, and policies applicable to
      Auriga. However, non-compliance with such environmental and health and safety
      laws and regulations in the future would require Auriga to incur significant
      costs to comply. Auriga's research and development involves the controlled use
      of hazardous materials. Although the Company believes that its safety procedures
      for handling and disposing of such materials comply with the standards
      prescribed by applicable state, federal, and local regulations, the risk of
      contamination or injury from these materials cannot be completely eliminated.
      In
      the event of such contamination or injury, the Company could be held liable
      for
      any damages that result and any such liability could exceed its resources and
      materially adversely affect the Company's business, financial condition and
      results of operations.
AURIGA
      MAY NOT BE ABLE TO OBTAIN MARKETING APPROVAL FOR ANY OF THE PRODUCTS RESULTING
      FROM ITS DEVELOPMENT EFFORTS AND FAILURE TO OBTAIN THESE APPROVALS COULD
      MATERIALLY HARM ITS BUSINESS
While
      all
      new medicines must be approved by the FDA before they can be marketed and sold
      in the United States, the FDA has indicated its intent to exercise enforcement
      discretion and not pursue regulatory action against unapproved new medicines
      unless certain conditions occur. If these conditions were to materialize, or
      the
      FDA disagreed with the Company's conclusions about the regulatory status of
      these products, the Company might be required to submit an NDA and/or cease
      marketing until the FDA grants approval to do so. Successfully completing
      extensive clinical trials and demonstrating manufacturing capability is
      typically required to obtain FDA approval. Clinical development is expensive,
      uncertain and lengthy, often taking a number of years for a NDA to be filed
      with
      and ultimately approved by the FDA. Of the large number of drugs in development,
      only a small percentage result in the submission of a NDA to the FDA and even
      fewer are approved for commercialization.
Auriga
      may need to successfully address a number of challenges in order to complete
      the
      development of its future products. For example, to obtain marketing approval
      for a new product candidate, the Company and its third party manufacturers
      will
      be required to consistently produce the active pharmaceutical ingredient in
      commercial quantities and of specified quality on a repeated basis. This
      requirement is referred to as process validation. If Auriga is unable to satisfy
      this process validation requirement for a future product candidate, through
      its
      third party manufacturers or otherwise, it will not receive approval to market
      such product.
In addition, the FDA and other regulatory agencies may apply new standards
      for
      safety, manufacturing, packaging, and distribution of future product candidates.
      Complying with such standards may be time consuming or expensive and could
      result in delays in the Company obtaining marketing approval for future product
      candidates, or possibly preclude it from obtaining such approval. Such a delay
      could also increase Auriga's commercialization costs, possibly materially.
20
Furthermore, the Company's future products may not be effective or may prove to
      have undesirable or unintended side effects, toxicities or other characteristics
      that may preclude the Company from obtaining regulatory approval or prevent
      or
      limit commercial use. The FDA and other regulatory authorities may not approve
      any product that the Company develops. Even if the Company does obtain
      regulatory approval, such regulatory approvals may be subject to limitations
      on
      the indicated uses for which the Company may market a product, which may limit
      the size of the market for such product.
OTHER
      COMPANIES MAY CLAIM THAT AURIGA INFRINGED UPON THEIR INTELLECTUAL PROPERTY
      OR
      PROPRIETARY RIGHTS.
Auriga
      does not believe that its products or processes violate third party intellectual
      property rights. Nevertheless, there is no guarantee that such rights are not
      being, and will not be, violated. If any of the products or processes are found
      to violate third party intellectual property rights, Auriga may be required
      to
      re-engineer or cause to be re-engineered one or more of those products or
      processes or seek to obtain licenses from third parties to continue offering
      its
      products or processes without substantial re-engineering, and such efforts
      may
      not be successful.
In
      addition, future patents may be issued to third parties upon which Auriga's
      technology may infringe. Auriga may incur substantial costs in defending against
      claims under any such patents. Furthermore, parties making such claims may
      be
      able to obtain injunctive or other equitable relief, which effectively could
      block Auriga's ability to further develop or commercialize some or all of its
      products in the U.S. or overseas and could result in the award of substantial
      damages against Auriga. In the event of a claim of infringement, Auriga may
      be
      required to obtain one or more licenses from third parties. There can be no
      assurance that the Company will be able to obtain such licenses at a reasonable
      cost, if at all. Defense of any lawsuit or failure to obtain any such license
      could have a material adverse effect on Auriga.
SUCCESS
      DEPENDS ON AURIGA'S ABILITY TO PROTECT ITS PROPRIETARY TECHNOLOGY.
Auriga's
      success depends, to a significant degree, upon the protection of its, and that
      of its licensors' proprietary technologies. Legal fees and other expenses
      necessary to obtain and maintain appropriate patent protection could be
      material. Insufficient funding may inhibit the ability of Auriga to obtain
      and
      maintain such protection. Additionally, if Auriga must resort to legal
      proceedings to enforce its intellectual property rights, the proceedings could
      be burdensome and expensive and could involve a high degree of risk to its
      proprietary rights if it is unsuccessful in, or cannot afford to pursue, such
      proceedings.
Auriga
      has filed patent applications covering technologies pertaining to extended
      release formulations. The Company is aware that certain European and U.S.
      patents have been issued with claims covering products that contain certain
      extended release formulations. It may be argued that certain or all of the
      Company's products under development may use a formulation covered by such
      European or U.S. patents. If that is shown to be the case, the Company would
      be
      prevented from making, using or selling such products unless Auriga obtains
      a
      license under such patents, which license may not be available on commercially
      reasonable terms, or at all, or unless such patents are determined to be invalid
      in Europe or invalid or unenforceable in the United States. The Company's
      development of products that may be covered by such patents and its failure
      to
      obtain licenses under such patents in the event such patents are determined
      to
      be valid and enforceable could have an adverse effect on the Company's
      business.
21
Auriga
      also relies on trade secrets and contract law to protect certain of its
      proprietary technology. There can be no assurance that any such contract will
      not be breached, or that if breached, it will have adequate remedies.
      Furthermore, there can be no assurance that any of Auriga's trade secrets will
      not become known or independently discovered by third parties.
There
      can
      be no assurance that others will not independently develop substantially
      equivalent proprietary information and techniques or otherwise gain access
      to
      Auriga's trade secrets and know-how. In addition, Auriga may be required to
      obtain licenses to patents or other proprietary rights from third parties.
      There
      can be no assurance that any licenses required under any patents or proprietary
      rights would be made available on acceptable terms, if at all. If Auriga does
      not obtain required licenses, it may encounter delays in product development
      or
      find that the development, manufacture or sale of products requiring such
      licenses could be foreclosed. Additionally, it may, from time to time, support
      and collaborate in research conducted by universities and governmental research
      organizations. There can be no assurance that the Company will have or be able
      to acquire exclusive rights to the inventions or technical information derived
      from such collaborations, or that disputes will not arise with respect to rights
      in derivative or related research programs conducted by Auriga or collaborators.
Because
      the patent positions of pharmaceutical and biotechnology companies are highly
      uncertain and involve complex legal and factual questions, any patents owned
      and
      licensed by Auriga, or any future patents, may not prevent other companies
      from
      developing competing products or ensure that others will not be issued patents
      that may prevent the sale of the Company's products or require licensing and the
      payment of significant fees or royalties. Furthermore, to the extent that
      (1) any of the Company's future products or methods are not patentable,
      (2) such products or methods infringe upon the patents of third parties, or
      (3) the Company's patents or future patents fail to give Auriga an
      exclusive position in the subject matter to which those patents relate, the
      Company will be adversely affected. The Company may be unable to avoid
      infringement of third party patents and may have to obtain a license, or defend
      an infringement action and challenge the validity of the patents in court.
      A
      license may be unavailable on terms and conditions acceptable to the Company,
      if
      at all. Patent litigation is costly and time consuming, and the Company may
      be
      unable to prevail in any such patent litigation or devote sufficient resources
      to even pursue such litigation. If the Company does not obtain a license under
      such patents, or if it is found liable for infringement and if it is not able
      to
      have such patents declared invalid, the Company may be liable for significant
      money damages, may encounter significant delays in bringing products to market,
      or may be precluded from participating in the manufacture, use, or sale of
      products or methods of treatment requiring such licenses.
FAILURE
      TO IMPLEMENT NEW TECHNOLOGIES.
Auriga's
      future growth is partially tied to its ability to improve its knowledge and
      implementation of pharmaceutical technologies. Inability to successfully
      implement commercially viable pharmaceutical technologies in response to market
      conditions in a manner that is responsive to its customers' requirements could
      have a material adverse effect on Auriga.
22
DEPENDENCE
      ON SINGLE SOURCES OF SUPPLY.
The
      Company's products are currently sourced from single qualified suppliers or
      manufacturers. The Company has not established arrangements with alternative
      suppliers for these ingredients or from alternative manufacturers for the
      manufacture of the Company's products. Any interruption of raw material supply,
      for any reason, in (i) any of the required ingredients for the Company's
      products or (ii) the manufacture of the product, could have a material adverse
      effect on Auriga's ability to manufacture its products or to obtain or maintain
      regulatory approval of such products.
RISK
      RELATED TO COMMON STOCK
THE
      COMPANY'S COMMON STOCK IS THINLY TRADED AND STOCKHOLDERS MAY NOT BE ABLE TO
      LIQUIDATE THEIR INVESTMENT AT ALL, OR MAY ONLY BE ABLE TO LIQUIDATE THE
      INVESTMENT AT A PRICE LESS THAN THE COMPANY'S VALUE.
The
      Company's common stock is very thinly traded, and the price if traded may not
      reflect the value of the Company. Consequently, investors may not be able to
      liquidate their investment at all, or if they are able to liquidate it may
      only
      be at a price that does not reflect the value of the business. Even if a more
      active market should develop, the price may be highly volatile. Because the
      price for the Company's common stock is low, many brokerage firms may not be
      willing to effect transactions in the securities. Even if an investor finds
      a
      broker willing to effect a transaction in the Company's common stock, the
      combination of brokerage commissions, transfer fees, taxes, if any, and any
      other selling costs may exceed the selling price. Further, many lending
      institutions will not permit the use of the Company's common stock as collateral
      for any loans.
The
      Company does not qualify or meet the requirements for the listing and/or
      quotation of the Company's common stock on the NASDAQ SmallCap and the American
      Stock Exchange. If the Company determines that it would like to pursue such
      listing and attempt to meet the listing standards, in order to achieve the
      minimum required price per share, the Company would have to effect a reverse
      stock split which could reduce the overall value of your investment.
THE
      COMPANY'S COMMON STOCK HAS NOT BEEN ACTIVELY TRADED ON A PUBLIC MARKET.
For
      a
      number of years the Company's common stock has traded only on a limited basis.
      Therefore, it is not certain whether investor interest in the Company's common
      stock will be sufficient to create or sustain an active public trading market.
      If an active public trading market for shares of the Company's common stock does
      not develop, investors and the other recipients of the common stock underlying
      the Series A convertible preferred stock issued in the Merger transaction may
      have limited liquidity and may be forced to hold their shares for an indefinite
      period of time.
23
THE
      OUTSTANDING SERIES A CONVERTIBLE PREFERRED STOCK ISSUED IN THE MERGER
      TRANSACTION AND THE COMMON STOCK UNDERLYING SUCH PREFERRED STOCK WILL BE
"RESTRICTED SECURITIES" AND MAY NOT BE RESOLD UNLESS THEY ARE REGISTERED UNDER
      THE SECURITIES ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
The
      shares of Series A convertible preferred stock are, and the common stock
      underlying such preferred shares will be, "restricted securities" as such term
      is defined in Rule 144 under the Securities Act. Accordingly, they may not
      be
      resold unless they are registered under the Securities Act and applicable state
      securities laws or unless exemptions from such registration requirements are
      available. Any such exemption must be established to the Company' satisfaction.
      Certain holders of the Company's common stock have registration rights. If the
      Company files a registration statement to register the common stock underlying
      such preferred shares, the shares of common stock having registration rights
      or
      newly issued securities of the Company in the future, there is no guarantee
      that
      the SEC will permit such registration to become effective or that it will be
      effective when a holder of common stock elects to sell the shares of common
      stock. Any inability to sell may affect the ultimate realizable value of the
      common stock.
BECAUSE
      THE COMPANY IS SUBJECT TO THE PENNY STOCK RULES SALE OF THE COMPANY'S COMMON
      STOCK BY INVESTORS MAY BE DIFFICULT.
The
      Company is subject to the SEC's "penny stock" rules.
Penny
      stocks generally are equity securities
with a
      price of less than $5.00. The penny stock rules require
broker-dealers
      to deliver a standardized risk disclosure document prepared by the SEC which
      provides information about penny stocks and the nature and level
of risks
      in the penny stock market. The broker-dealer must also provide the
customer
      with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson, and monthly account
statements
      showing the market value of each penny stock held in the customer's
account.
      The bid and offer quotations, and the broker-dealer and salesperson compensation
      information must be given to the customer orally or in writing prior to
      completing the transaction and must be given to the customer in writing before
      or with the customer's confirmation.
In
      addition, the penny stock rules require that prior to a transaction, the broker
      and/or dealer must make a special written determination that the penny
      stock
is a
      suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction.
The
      penny stock rules are burdensome and may reduce purchases of any
offerings and reduce the trading activity for the Company's common stock. As
      long as the Company's common stock
is
      subject to the penny stock rules, the holders of such common
stock
      may find it more difficult to sell their securities.
24
THE
      COMPANY'S COMMON STOCK PRICES COULD DECREASE IF A SUBSTANTIAL NUMBER OF SHARES
      ARE SOLD UNDER RULE 144.
A
      substantial majority of the Company's outstanding shares of common stock are
      "restricted securities" within the meaning of Rule 144 under the Securities
      Act.
      As restricted shares, these shares may be resold only pursuant to an effective
      registration statement or under the requirements of Rule 144 or other applicable
      exemption from registration under the Act and as required under applicable
      state
      securities laws. Rule 144 provides in essence that a person who has held
      restricted securities for a period of at least one year may, under certain
      conditions, sell every three months, in brokerage transactions, a number of
      shares that does not exceed the greater of 1.0% of the Company's outstanding
      common stock or the average weekly trading volume during the four calendar
      weeks
      prior to the sale. There is no limit on the amount of restricted securities
      that
      may be sold by a non-affiliate after the restricted securities have been held
      by
      the owner for a period of two years or more. If a substantial number of shares
      of the Company's common stock are sold under Rule 144 or other exemption, it
      could cause the price the Company's common stock to go down.
THE
      COMPANY'S PRINCIPAL STOCKHOLDERS HAVE THE ABILITY TO EXERT SIGNIFICANT CONTROL
      IN MATTERS REQUIRING STOCKHOLDER VOTE AND COULD DELAY, DETER OR PREVENT A CHANGE
      IN CONTROL OF THE COMPANY.
Philip
      S.
      Pesin owns approximately 29% of the Company's outstanding common stock (upon
      conversion of the Series A convertible preferred stock) and will be able to
      assert significant influence over the election of directors and other matters
      presented for a vote of stockholders. In addition, assuming the Company
      reincorporates in Delaware as planned, Delaware corporate law provides that
      certain actions may be taken by consent action of stockholders holding a
      majority of the outstanding shares. In the event that the requisite approval
      of
      stockholders is obtained, dissenting or non-participating stockholders generally
      would be bound by such vote. Through this concentration of voting power, Mr.
      Pesin could delay, deter or prevent a change in control of the Company or other
      business combinations that might otherwise be beneficial to the Company's other
      stockholders. In deciding how to vote on such matters, Mr. Pesin may be
      influenced by interests that conflict with yours. You should not buy the
      Company's common stock unless you are willing to entrust all aspects of
      operational control to the Company's current management team.
THE
      CONVERSION OF OUTSTANDING DERIVATIVE SECURITIES COULD CAUSE YOUR OWNERSHIP
      IN
      THE COMPANY TO BE DILUTED AND MAY DECREASE THE VALUE OF YOUR
      INVESTMENT.
Outstanding
      derivative securities and current and future obligations to issue the Company's
      securities to various parties may dilute the value of your investment.
      Immediately after the closing of the Merger, the Company will have options
      and
      warrants outstanding to purchase approximately 14,563,283 shares of its common
      stock at prices ranging from $0.42 to $1.24 per share. For the length of time
      these warrants and options are outstanding, the holders thereof will have an
      opportunity to profit from a rise in the market price of the Company's common
      stock without assuming the risks of ownership. This may have an adverse effect
      on the terms upon which the Company can obtain additional capital. It should
      be
      expected that the holders of such derivative securities would exercise or
      convert them at a time when the Company would be able to obtain equity capital
      on terms more favorable than the exercise or conversion prices provided by
      the
      warrants or options. There are no preemptive rights in connection with the
      Company's common stock.
25
THE
      COMPANY DOES NOT INTEND TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE.
The
      Company does not intend to pay any dividends in the foreseeable future. The
      Company does not plan on making any cash distributions in the manner of a
      dividend or otherwise. The Company's board of directors presently intends to
      follow a policy of retaining earnings, if any.
THE
      COMPANY HAS THE RIGHT TO ISSUE ADDITIONAL COMMON STOCK AND PREFERRED STOCK
      WITHOUT THE CONSENT OF SHAREHOLDERS. THIS WOULD HAVE THE EFFECT OF DILUTING
      YOUR
      OWNERSHIP IN THE COMPANY AND COULD DECREASE THE VALUE OF YOUR
      STOCK.
Following
      the planned reverse stock split and the automatic conversion of the Series
      A
      Preferred Stock, there will be additional authorized but unissued shares of
      the
      Company's common stock that may be later issued by the Company's management for
      any purpose without the consent or vote of the stockholders that would dilute
      a
      stockholder's percentage ownership of the Company.
In
      addition, the Company's articles of incorporation authorize the issuance of
      shares of preferred stock, the rights, preferences, designations and limitations
      of which may be set by the board of directors. The articles of incorporation
      have authorized issuance of up to 5,000,000 shares of preferred stock in the
      discretion of the board of directors, of which 1,200,000 shares have been
      designated as Series A convertible stock. The remaining 3,800,000 shares of
      authorized but undesignated preferred stock may be issued upon filing of amended
      Articles of Incorporation and the payment of required fees; no further
      shareholder action is required. If issued, the rights, preferences, designations
      and limitations of such preferred stock would be set by the board of directors
      and could operate to the disadvantage of the outstanding common stock. Such
      terms could include, among others, preferences as to dividends and distributions
      on liquidation.
IT
      IS
      POSSIBLE THAT THERE ARE CLAIMS OF WHICH THE COMPANY IS UNAWARE THAT MAY COME
      TO
      LIGHT IN THE FUTURE AND COST THE COMPANY CONSIDERABLE TIME, EFFORT AND EXPENSE
      TO RESOLVE.
Although
      Multi-Link Telecommunications, Inc. has not been operational for several years
      prior to the acquisition of Auriga, it is possible that a claim, whether
      colorable or not, may be asserted against the Company in the future with respect
      to matters arising prior to the Merger. There can be no assurance given that
      some person will not devise a claim and attempt to assert it against the Company
      in the hopes of obtaining some monetary benefit. To resolve such a claim,
      including payment, may cost the Company considerable time, effort and expense.
      Any of these may impair management's implementation of the business plan
      concerning the Company with the consequence of a loss of opportunity.
26
MANAGEMENT'S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
All
      references to the "Company," "we," "our," and "us" for periods prior to and
      subsequent to the closing of the Merger refer to Auriga Laboratories and its
      subsidiaries.
THE
      FOLLOWING DISCUSSION SHOULD BE READ TOGETHER WITH THE INFORMATION CONTAINED
      IN
      THE FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED ELSEWHERE IN THIS CURRENT
      REPORT ON FORM 8-K.
Overview
The
      Company was formed as a Delaware corporation in April 12, 2005 as part of a
      reorganization transaction involving several companies owned by the founders
      and
      is authorized to issue 50,000,000 shares of $0.0001 par value common stock.
      As
      part of the reorganization transaction, Tryon Labs, Inc. changed its name to
      Auriga Development, Inc. and operates as a wholly-owned subsidiary engaged
      in
      drug development. Auriga Pharmaceuticals, LLC also became a wholly-owned
      subsidiary of Auriga, and is engaged in the sales and marketing of Company
      products.
We
      are a
      specialty pharmaceutical company with stand-alone sales, marketing, and
      development capabilities. The Company currently markets the Extendryl® family of
      products with a forty-person sales force. We plan to become a fully integrated
      pharmaceutical company by acquiring manufacturing and development capabilities.
      We also seek to acquire and/or in-license additional products and technologies.
Results
      of Operations
From
      April 12, 2005 (Date of Inception) to March 31, 2006
SALES
$
7,350,120
Less
                returns and allowances
753,247
NET
                SALES
6,596,873
COST
                OF GOODS SOLD
2,626,488
GROSS
                PROFIT
3,970,385
OPERATING
                EXPENSES
5,064,332
LOSS
                FROM OPERATIONS
(1,093,947
)
OTHER
                EXPENSES
2,056,106
NET
                LOSS
$
(3,150,053
)
27
RESULTS
      OF OPERATIONS
Auriga
      incurred a net loss of $3,150,053 for the period from inception through March
      31, 2006. This loss represents a loss from operations of $1,093,947, before
      Other Expenses of $2,056,106. The Company's net loss occurred primarily as a
      result of operating expenses and costs related to the start up of operations,
      and noncash financing expenses of $1,986,592 attributed to the exercise of
      a
      warrant, which is included in Other Expenses.
Auriga
      had net sales of $6,596,873 for the period from inception through March 31,
      2006. The Company's management expects that sales will increase in the year
      ended March 31, 2007, although the rate of this increase will depend on the
      success of the of the Company's existing product line as well as additional
      products it plans to add to the overall Company product mix.
Auriga's
      gross profit for the period from inception (April 12, 2005) through March 31,
      2006 was $3,970,385, and its gross margin was 60%. The Company's management
      anticipates that Auriga will continue to experience similar levels of gross
      margin as management seeks out manufacturers, product lines, and suppliers
      with
      competitive pricing for quality products.
Operating
      Expenses
Sales
      and Marketing Expenses
Sales
      and
      marketing expenses consist primarily of salaries and benefits, drug samples,
      market research data, promotions, advertising, consulting fees, and market
      data
      analysis. We expect to continue to increase marketing and development efforts
      in
      the future and as a result expect this class of expenses to continue to
      increase.
General
      and Administrative Expenses
Our
      general and administrative expenses consist primarily of salaries and benefits
      for employees, fees to our professional advisors, rent, and other general
      operating costs. Based on our plans for future growth, we expect our general
      and
      administrative costs are likely to increase significantly.
28
Research
      and Development Expenses
Our
      research and development expenses consist primarily of salaries and benefits
      for
      research and development employees and payments to independent contractors.
      Expenses in this area are likely to increase significantly as the Company
      develops new and existing products and technologies.
THE
      INDUSTRY
The
      pharmaceutical industry has experienced significant growth over the past several
      years.
IMS
      Health ("IMS"), the world's leading provider of market intelligence to the
      pharmaceutical and healthcare industries,
reports
      that the total U.S. prescription drug market was approximately $234 billion
      in
      2004. For the ten years to 2004, the compounded annual growth rate (CAGR) in
      sales was 13.0% and CAGR is expected to be 7%-10% between
      2005-2009.
The
      industry is undergoing a period of consolidation. It is estimated that during
      the years 2001-2005 branded products with estimated 2001 sales in excess of
      $35
      billion will lose patent protection and that in 2006 alone the figure is
      expected to be in the $20 billion range. To replace these revenues and lessen
      their dependence on internal development programs, the large pharmaceutical
      companies are increasingly entering into strategic licensing arrangements with
      specialty pharmaceutical companies with valuable research and development
      programs and technologies. They are also developing strategies to defend
      themselves against generic competition through innovative approaches to
      extension brand life-cycles, exclusivity period and product
      differentiation.
Auriga
      plans to capitalize on these changes by acquiring well known and highly written
      brand names that have become less valuable to larger companies and combining
      them with new drug approvals that are designed to provide periods of market
      exclusivity.
PHARMACEUTICAL
      DEVELOPMENT
Other
      than the products that are exempted from the formal approval process by the
      "DESI" regime as defined below, the Company will be required by the FDA to
      comply with NDA procedures for its branded products prior to commencement of
      marketing by it, or its licensees. New drug compounds and new formulations
      for
      existing drug compounds which cannot be filed as ANDAs are subject to NDA
      procedures. These procedures include (1) preclinical laboratory and animal
      toxicology tests; (2) scaling and testing of production batches;
      (3) submission of an Investigational New Drug Application ("IND"), and
      subsequent approval is required before any human clinical trials can commence;
      (4) adequate and well controlled replicate human clinical trials to
      establish the safety and efficacy of the drug for its intended indication;
      (5) the submission of an NDA to the FDA; and (6) FDA approval of an
      NDA prior to any commercial sale or shipment of the product, including
      pre-approval and post-approval inspections of its manufacturing and testing
      facilities. If all of this data in the product application is owned by the
      applicant, the FDA will issue its approval without regard to patent rights
      that
      might be infringed or exclusivity periods that would affect the FDA's ability
      to
      grant an approval if the application relied upon data which the applicant did
      not own. The Company intends to generate all data necessary to support FDA
      approval of the applications it files.
29
Preclinical
      laboratory and animal toxicology tests must be performed to assess the safety
      and potential efficacy of the product. The results of these preclinical tests,
      together with information regarding the methods of manufacture of the products
      and quality control testing, are then submitted to the FDA as part of an IND
      requesting authorization to initiate human clinical trials. Once the IND notice
      period has expired, clinical trials may be initiated, unless a hold on clinical
      trials has been issued by the FDA.
Clinical
      trials involve the administration of a pharmaceutical product to individuals
      under the supervision of qualified medical investigators that are experienced
      in
      conducting studies under "Good Clinical Practise" guidelines. Clinical studies
      are conducted in accordance with protocols that detail the objectives of a
      study, the parameters to be used to monitor safety and the efficacy criteria
      to
      be evaluated. Each protocol is submitted to the FDA and to an Institutional
      Review Board prior to the commencement of each clinical trial. Clinical studies
      are typically conducted in three sequential phases, which may overlap. In
      Phase I, the initial introduction of the
product
      into human subjects, the compound is tested for absorption, safety, dosage,
      tolerance, metabolic interaction, distribution, and excretion. Phase II
      involves studies in a limited patient population with the disease to be treated
      to (1) determine the efficacy of the product for specific targeted
      indications, (2) determine optimal dosage and (3) identify possible
      adverse effects and safety risks. In the event Phase II evaluations
      demonstrate that a pharmaceutical product is effective and has an acceptable
      safety profile, Phase III clinical trials are undertaken to further
      evaluate clinical efficacy of the product and to further test its safety within
      an expanded patient population at geographically dispersed clinical study sites.
      Periodic reports on the clinical investigations are required. We, or the FDA,
      may suspend clinical trials at any time if either party believes the clinical
      subjects are being exposed to unacceptable health risks. The results of the
      product development, analytical laboratory studies and clinical studies are
      submitted to the FDA as part of an NDA for approval of the marketing and
      commercialization of a pharmaceutical product.
The
      above-described NDA procedures are premised on the applicant being the owner
      of,
      or having obtained a right of reference to, all of the data required to prove
      safety and efficacy. These NDAs are governed by 21 U.S.C. § 355(b)(1),
      also known as Section 505(b)(1) of the FDC Act.
ABBREVIATED
      NEW DRUG APPLICATION
In
      certain cases, where the objective is to develop a generic version of an
      approved product already on the market in controlled-release dosages, an ANDA
      may be filed in lieu of filing an NDA. Under the ANDA procedure, the FDA waives
      the requirement to submit complete reports of preclinical and clinical studies
      of safety and efficacy and instead requires the submission of bioequivalency
      data, that is, demonstration that the generic drug produces the same effect
      in
      the body as its brand-name counterpart and has the same pharmacokinetic profile,
      or change in blood concentration over time. The ANDA procedure would be
      available to us for a generic version of a drug product approved by the FDA.
      In
      certain cases, an ANDA applicant may submit a suitability petition to the FDA
      requesting permission to submit an ANDA for a drug product that differs from
      a
      previously approved reference drug product (the "Listed Drug") when the change
      is one authorized by statute. Permitted variations from the Listed Drug include
      changes in: (1) route of administration, (2) dosage form,
      (3) strength and (4) one of the active ingredients of the Listed Drug
      when the Listed Drug is a combination product. The FDA must approve the petition
      before the ANDA may be submitted. An applicant is not permitted to petition
      for
      any other kinds of changes from listed drugs. The information in a suitability
      petition must demonstrate that the change from the Listed Drug requested for
      the
      proposed drug product may be adequately evaluated for approval without data
      from
      investigations to show the proposed drug product's safety or effectiveness.
      The
      advantages of an ANDA over an NDA include reduced research and development
      costs
      associated with bringing a product to market, and generally a shorter review
      and
      approval time at the FDA.
30
PATENT
      CERTIFICATION AND EXCLUSIVITY ISSUES
ANDAs
      are
      required to include certifications with respect to any patents that claim the
      Listed Drug or that claim a use for the Listed Drug for which the applicant
      is
      seeking approval. If applicable patents are in effect and this information
      has
      been submitted to the FDA, the FDA must delay approval of the ANDA until the
      patents expire. If the applicant believes it will not infringe the patents,
      it
      can make a patent certification to the holder of patents on the drug for which
      a
      generic drug approval is being sought, which may result in patent infringement
      litigation which could delay the FDA approval of the ANDA for up to
      30 months. If the drug product covered by an ANDA were to be found by a
      court to infringe another company's patents, approval of the ANDA could be
      delayed until the patents expire. Under the FDC Act, the first filer of an
      ANDA
      with a "non-infringement" certification is entitled to receive 180 days of
      market exclusivity. Subsequent filers of generic products would be entitled
      to
      market their approved product six months after the earlier of the first
      commercial marketing of the first filer's generic product or a successful
      defense of a patent infringement suit.
Patent
      expiration refers to expiry of U.S. patents (inclusive of any extensions)
      on drug compounds, formulations and uses. Patents outside the United States
      may differ from those in the United States. Under U.S. law, the
      expiration of a patent on a drug compound does not create a right to make,
      use
      or sell that compound. There may be additional patents relating to a person's
      proposed manufacture, use or sale of a product that could potentially prohibit
      such person's proposed commercialization of a drug compound.
The
      FDC
      Act contains non-patent market exclusivity provisions that offer additional
      protection to pioneer drug products and are independent of any patent coverage
      that might also apply. Exclusivity refers to the fact that the effective date
      of
      approval of a potential competitor's ANDA to copy the pioneer drug may be
      delayed or, in certain cases, an ANDA may not be submitted until the exclusivity
      period expires. Five years of exclusivity are granted to the first approval
      of a
      "new chemical entity." Three years of exclusivity may apply to products which
      are not new chemical entities, but for which new clinical investigations are
      essential to the approval. For example, a new indication for use, or a new
      dosage strength of a previously-approved product, may be entitled to
      exclusivity, but only with respect to that indication or dosage strength.
      Exclusivity only offers protection against a competitor entering the market
      via
      the ANDA route, and does not operate against a competitor that generates all
      of
      its own data and submits a full NDA under Section 505(b)(1) of the
      FDC Act.
31
If
      applicable regulatory criteria are not satisfied, the FDA may deny approval
      of
      an NDA or an ANDA or may require additional testing. Product approvals may
      be
      withdrawn if compliance with regulatory standards is not maintained or if
      problems occur after the product reaches the market. The FDA may require further
      testing and surveillance programs to monitor the pharmaceutical product that
      has
      been commercialized. Noncompliance with applicable requirements can result
      in
      additional penalties, including product seizures, injunction actions and
      criminal prosecutions.
ABOUT
      DESI DRUGS
Currently,
      an FDA program allows the Company, in its opinion, to manufacture and market
      its
      current Extendryl® products, without going through the formal approval process
      of submitting an NDA with safety and efficacy data. The Company believes its
      current Extendryl® products are governed by a special regime established by a
      string of legislation spanning from 1938 through 1984 and administrative
      guidance as recent as 2003. Prior to 1938, drugs could be marketed in the U.S.
      as long as a drug's label did not present false information regarding the drug's
      strength and purity. The Federal Food, Drug and Cosmetic Act of 1938 (the "Act")
      required the manufacturer to prove the safety of a drug before introducing
      it to
      the market. In 1962, the Act was amended to further require the manufacturer
      to
      prove new drugs were effective as well. The U.S. Food and Drug Administration
      ("FDA") then undertook a Drug Efficacy Study Implementation program ("DESI") for
      all drugs approved between 1938 and 1962, allowing these drugs to remain on
      the
      market while evidence of their effectiveness was reviewed. These pre-1962 drugs
      are commonly referred to as DESI Drugs. While the FDA may consider Auriga's
      products to be new drugs, it has indicated its intent to exercise enforcement
      discretion and not pursue regulatory action for DESI drugs, such as Auriga's
      Extendryl® products, unless certain conditions occur. If these conditions were
      to materialize, or the FDA disagreed with Auriga's conclusions about the
      regulatory status of these products, Auriga might be required to submit an
      NDA
      and/or cease marketing until the FDA grants approval to do so.
In
      January 2003, the FDA published an OTC Monograph, to establish guidelines for
      many of the DESI Drugs that still exist in the marketplace. As a result, many
      manufacturers are seeking to divest of these products. The Company's strategy to
      maximize the remaining value is to reformulate the acquired drugs, then market
      the reformulated drugs under the same historical brand name. The reformulations
      involve changes in the active ingredients, while maintaining the safety and
      efficacy in treating the indicated conditions. As a "new and improved" version
      of the drug, existing generic substitutes are no longer able to claim generic
      equivalency, therefore obligating pharmacists to dispense the name brand for
      each prescription filled. FDA guidelines for DESI Drugs do not require any
      formal approval process for these reformulations as long as all ingredients
      are
      among those included on an FDA list as both safe and effective. The Draft
      Guidance set forth by FDA allows for the filing of an NDA for a DESI class
      of
      drugs. In accordance with the draft policy guidance, FDA plans to grant a period
      of exclusivity for Company's who obtain NDAs for DESI drugs. This could provide
      a significant opportunity for the Company to eliminate competition and generic
      substitution on many of its historical products.
32
PHARMACEUTICAL
      SALES AND MARKETING
The
      U.S.
      market for prescription cough and cold products was approximately $1.3 billion
      in 2004 according to National Sales Perspectives, a report produced by
IMS
      Health, the world's leading provider of market intelligence to the
      pharmaceutical and healthcare industries
.
      The
      U.S. retail market for OTC cough, cold, allergy, and sinus products is
      approximately $2.6 billion according to Information Resources, Inc. in that
      same
      year. We believe our initial four products combined with the 4 line extensions
      will compete in many of the segments of this combined market that total
      approximately $3.9 billion. In 2005, according to IMS National Prescription
      Audit, the volume of prescriptions in the cough/cold market grew 9.5% from
      72.3
      million in 2004 to 79.2 million total prescriptions in 2005.
BUSINESS
      STRATEGY
As
      Auriga
      seeks to become a fully integrated pharmaceutical company, it will need to
      partner with or acquire companies with stand alone manufacturing and development
      capabilities. In addition, Auriga will seek to partner with or acquire companies
      with complimentary product lines and technologies.
In
      marketing its products, Auriga currently uses three strategies to be successful:
      (1) the creation of a focused product portfolio using its proprietary
      process for selecting appropriate drugs for development, (2) use of experienced
      Product Development Teams to drive development, and (3) use of the most
      effective sales and marketing strategies appropriate to each product
      opportunity.  This approach uses resources available to the Company and
      does not require the use of a large fixed sales force.  The Company
      currently anticipates that internal marketing efforts will be aimed at driving
      products into the national formularies of pharmaceutical benefit managers and
      drug store chains, while external efforts will lever specialist sales
      organizations that market directly to physicians.  The marketing acumen and
      support of both large and small pharmaceutical companies will also be leveraged
      through partnerships with these organizations.
A
      key
      strategy for the development of improved formulations of approved drugs will
      be
      the use of drug delivery technologies and regulatory exclusivity. These
      reformulated drugs can offer improved efficacy, reduced side effects, reduced
      dosing frequency, and improved patient compliance.  In addition, new
      technologies can facilitate the development of drugs that are difficult to
      formulate as well as new drug combinations (two or more drugs in a single
      tablet).  Through its unique network and alliances in the drug delivery
      field, Auriga has gained access to several proprietary oral delivery
      technologies that will be used to create differentiated products.  Each of
      the technologies chosen for this development strategy will involve products
      that, in most cases, have already received FDA approval.  In addition,
      Auriga anticipates that each technology will be protected by patents covering
      composition of matter and use so that Auriga can develop a strong proprietary
      position for products in the marketplace in addition to market exclusivities
      obtained from regulatory approvals.
33
MANUFACTURING
The
      Company's strategy is to initially outsource its manufacturing, packaging and
      distribution functions to produce and package its products in order to achieve
      growth without incurring large capital outlays. Once Auriga achieves certain
      revenue and profitability milestones, it will seek to bring these functions
      in-house through acquisition or partnering. In that regard, the Company intends
      to engage third party contractors (primarily large pharmaceutical companies)
      to
      manufacture its products. The Company believes that in those instances where
      it
      acquires the rights to approved products from another pharmaceutical company,
      the selling or licensing company will agree to manufacture the Company's
      requirements of the products (or to assign rights from pre-existing arrangements
      with respect to manufacturing) for a specified period of time. The following
      table lists the current products Auriga manufactures and which contract
      manufacturing partner is utilized for each of these products:
34
Product
                Information
Product
                Description
NDC#
Bottle
Case
                Pack
Manufacturer
Extendryl
®
SR
20mg
                phenylephrine HCI
14629-101-01
100ct
12
8mg
                chlorpheniramine maleate
Sovereign
                Pharma
2.5mg
                methscopolamine nitrate
Extendryl
®
JR
10mg
                phenylephrine HCI
14629-102-01
100ct
12
4mg
                chlorpheniramine maleate
Sovereign
                Pharma
1.25
                methscopolamine nitrate
Extendryl
®
Chew
10mg
                phenylephrine HCI
10122-403-10
100ct
12
2mg
                chlorpheniramine maleate
Sovereign
                Pharma
1.25mg
                methscopolamine nitrate
Extendryl
®
Syrup
10mg
                phenylephrine HCI
10122-404-16
16oz
12
2mg
                chlorpheniramine maleate
Sovereign
                Pharma
1.25mg
                methscopolamine nitrate
Extendryl
®
PSE
120mg
                pseudoephedrine HCL
14629-201-01
100ct
12
2.5mg
                methscopolamine nitrate
Provident
                Pharma
Extendryl
®
DM
30mg
                dextromethorphan HBR
14629-202-01
100ct
12
8mg
                chlorpheniramine maleate
Provident
                Pharma
2.5mg
                methscopolamine nitrate
Extendryl
®
HC
                Tabs
10mg
                hydrocodone bitartrate
14629-203-01
100ct
12
1000mg
                guaifenesin
Provident
                Pharma
Sovereign
      Pharmaceuticals:
Sovereign
      Pharmaceuticals, established 1990, is a privately owned and operated company.
      Sovereign's committed team of employees excels in cGMP training and is focused
      on delivering high quality products in a timely manner. During the past three
      years Sovereign has upgraded equipment and facilities to meet the demands of
      its
      customers. The firm has recently completed a major expansion of its Research
      & Development Department, moving that department to a state of the art 7,200
      square foot facility and employing several scientists and additional support
      personnel.
35
Sovereign
      Pharmaceuticals specializes in the manufacture of customized dosage forms,
      including those made with their Fastab technology. Sovereign has the capability
      to manufacture over 650 million tablets per year. Sovereign's packaging
      capabilities are even greater at over 700 million tablets per year. In addition,
      Sovereign has liquid formulation capability that encompasses a diverse range
      of
      liquid products including over-the-counter preparations. Sovereign has the
      capability to manufacture 3 million pints each year. Sovereign's liquid
      packaging capabilities are even greater at 3.5 million pints each
      year.
Provident
      Pharmaceuticals:
Provident
      Pharmaceuticals, LLC. is focused on providing product development, contract
      manufacturing and packaging, and laboratory services for the pharmaceutical
      industry. Provident manufacturers a variety of solid dose and oral dose
      prescription products. Provident also has laboratory facilities to conduct
      all
      testing, validation and development activities. Provident Pharmaceuticals is
      headed up by Dr. Brian Crook who brings extensive experience in the
      pharmaceutical manufacturing industry with Pharma-Fab prior to starting
      Provident.
On
      August
      26, 2005, the Company was notified by the Department of Health & Human
      Services ("DHHS") that the Company's listed manufacturer(s) Form(s) FDA 2657
      were incomplete. DHHS required the Company to notify its manufacturers to file
      a
      complete Form FDA 2657 correcting these inadequacies. To the Company's
      knowledge, the Company's manufacturer(s) Form(s) FDA 2657 have been
      supplemented.
EMPLOYEES
As
      of May
      15, 2006, Auriga employed sixty-three full time personnel, fifty of which are
      engaged in sales and marketing, two in research and development, five in finance
      and administration and six in executive positions. None of the employees of
      Auriga are or ever have been the subject of any collective bargaining agreement
      with Auriga. Auriga's management believes that its relationship with its
      employees is good.
FACILITIES
Auriga's
      executive offices, administration and sales and marketing facilities are located
      at 5555 Triangle Parkway, Norcross, Georgia. The approximately 6,200 square
      feet
      is leased until October 31, 2008 at a bare rent of $8,749 per month, increasing
      yearly up to $9,560 per month. Auriga also occupies approximately 3,900 square
      feet at the same location, under a sublease terminating on October 19, 2007,
      at
      a monthly rental of $5,049. Auriga is also a lessee of approximately 2,490
      square feet of office space in Danbury, Connecticut, which lease expires on
      June
      30, 2008. Auriga has subleased this space to a non-affiliate at a monthly rental
      that equals approximately 75% of Auriga's monthly obligation under the lease.
      Auriga's management believes that the Norcross, Georgia facilities are
      sufficient for its existing activities and potential growth, and that the
      facilities are well maintained and in good condition.
36
MANAGEMENT
DIRECTORS
      AND EXECUTIVE OFFICERS
As
      of the
      Closing of the Merger on May 17, 2006, the following lists the name, age and
      business experience of each of the Multi-Link's directors and executive
      officers.
Name
Age
Position
Philip
                S. Pesin
32
Chairman,
                Chief Executive Officer and Chief Financial Officer
Dayne
                Wagoner
41
Director
                and Secretary
Philip
      S. Pesin
was a
      founder and director of Auriga since its inception in April 2005. He was
      appointed Chairman of the Board in December 2005 and became CEO, Treasurer
      and
      Secretary on March 29, 2006. Mr. Pesin is an attorney and certified public
      accountant. He is the founder of the Sorrento Financial Group, LLC, a financial
      services company specializing in private equity and business consulting. Mr.
      Pesin is actively involved in his community and sits on the board of directors
      of the Boys & Girls Club of the Southwest. Mr. Pesin is a member of the bar
      associations of California and the District of Columbia, and holds a Master
      of
      Laws degree from The Georgetown University Law Center, a Juris Doctor from
      the
      University of San Diego School of Law, and a Bachelor of Science in finance
      from
      The University of Arizona.
Dayne
      Wagoner
became a
      director of Auriga in December 2005. In 1995 Mr. Wagoner founded Edge
      Development, Inc. and from that time to the present he has been the CEO. Edge
      Development, Inc. is a leading contractor in the United States.
Employment
      Agreements.
On
      March
      29, 2006, Auriga entered into an Employment Agreement with Philip S. Pesin
      to be
      employed as Auriga's Chief Executive Officer. The agreement provides for a base
      salary of $360,000 annually with incentive bonuses to be based on objective
      or
      subjective criteria established by the Board of Directors. Auriga may terminate
      Mr. Pesin's employment at any time with or without cause. If Mr. Pesin is
      terminated without cause, he will be entitled a severance pay equal to his
      base
      salary for a period of twelve months following his termination plus continued
      health benefits for approximately eighteen months. Mr. Pesin receives no
      benefits if he is terminated for cause. Mr. Pesin will also receive similar
      benefits as aforementioned if he is terminated other than for cause, after
      a
      change in control.
Director
      Compensation.
Directors,
      other than employees of Multi-Link, receive a directors' fee of $2,500 per month
      plus they are reimbursed any expenses incurred by attending Board of Directors'
meetings. Multi-Link has entered into indemnification agreements with each
      of
      its directors.
37
SECURITY
      OWNERSHIP OF
CERTAIN
      BENEFICIAL OWNERS AND MANAGEMENT
The
      following table sets forth certain information regarding Multi-Link's common
      stock beneficially owned on May 17, 2006, for (i) each stockholder known to
      be
      the beneficial owner of 5% or more of Multi-Link's outstanding common stock,
      (ii) each executive officer and director, and (iii) all executive officers
      and
      directors as a group, after giving effect to the Merger, on a pre-Reverse Split
      and post-Reverse Split basis. In general, a person is deemed to be a "beneficial
      owner" of a security if that person has or shares the power to vote or direct
      the voting of such security, or the power to dispose or to direct the
      disposition of such security. A person is also deemed to be a beneficial owner
      of any securities of which the person has the right to acquire beneficial
      ownership within 60 days.
Assuming
      the automatic conversion of the Preferred Stock into Multi-Link's Common Stock
      occurred as of May 17 2006, Multi-Link expects to have 532,193,404 and
      35,479,627 shares of common stock outstanding on a pre-Reverse Split and
      post-Reverse Split basis, respectively.
Name
                of Beneficial Owner
Amount
(Pre-Reverse
                Split)
Amount
(Post-Reverse
                Split)
Percent
Philip
                S. Pesin (1)
5555
                Triangle Parkway, Suite 300
Norcross,
                GA 30092
229,032,465
15,268,831
37.7
%
Dayne
                Wagoner
5555
                Triangle Parkway, Suite 300
Norcross,
                GA 30092
39,539,865
2,635,991
7.4
%
Craig
                Collard (2)
208
                Roseler Court
Cary,
                NC 27519
54,687,120
3,645,808
10.3
%
Timothy
                F. Curran (3)
5555
                Triangle Parkway, Suite 300
Norcross,
                GA  30092
48,022,020
3,201,468
9.0
%
Trilogy
                Capital Partners, Inc. (4)
c/o
                Alfonso Cervantes
11726
                San Vicente, Suite 235
Los
                Angeles, CA  90049
37,517,190
2,501,146
6.6
%
KI
                Equity Partners I, LLC
c/o
                Timothy J. Keating, Manager
5251
                DTC Parkway, Suite 1090
Greenwood
                Village, Colorado 80111 (5)
28,703,182
1,913,545
5.4
%
All
                Executive Officers and Directors
As
                a Group (2 persons) (6)
268,572,330
17,904,822
44.2
%
38
(1)
Includes
                shares held by Sorrento Financial Group, LLC, SFP, LLC and TSFG II,
                LLC,
                over which Mr. Pesin has voting and investment control. Includes
                warrants
                to purchase 75,034,395 and 5,002,293 shares of Multi-Link's common stock,
                on a pre-Reverse Split and post-Reverse Split basis, respectively,
                at an
                exercise price of $0.92 per share on a post-Reverse Split basis.
                These
                warrants expire March 19, 2016. Includes 7,503,435 and 500,229 shares
                of
                Multi-Link's common stock, on a pre-Reverse Split and post-Reverse Split
                basis, respectively, held in an IRA for the benefit of Christine
                Pesin,
                Mr. Pesin's spouse.
(2)
Excludes
                2,532,795 and 168,853 shares of Multi-Link's common stock, on a
                pre-Reverse Split and post-Reverse Split basis, respectively, held
                by C.
                Collard Irrevocable Trust over which Mr. Collard disclaims any beneficial
                interest.
(3)
Excludes
                options to purchase 2,251,035 and 150,069 shares of Multi-Link's common
                stock, on a pre-Reverse Split and post-Reverse Split basis, respectively,
                at an exercise price of $0.92 per share on a post-Reverse Split basis,
                which options begin to vest May 29, 2007.
(4)
Includes
                warrants to purchase 30,013,755 and 2,000,917 shares of Multi-Link's
                common stock, on a pre-Reverse Split and post-Reverse Split basis,
                respectively, at an exercise price of $0.92 per share on a post-Reverse
                Split basis, which warrants expire March 30, 2010. Also includes
                warrants
                to purchase 7,503,435 and 500,229 shares of Multi-Link's common stock, on
                a pre-Reverse Split and post-Reverse Split basis, respectively, at
                an
                exercise price of $1.25 per share on a post-Reverse Split basis,
                which
                warrants expire March 30, 2010.
(5)
Timothy
                J. Keating is the manager of KI Equity Partners I, LLC ("KI Equity") and
                has sole voting and investment control of such shares.
(6)
Includes
                shares held by Sorrento Financial Group, LLC, SFP, LLC and TSFG II,
                LP,
                over which Mr. Pesin has voting and investment control. Includes
                warrants
                to purchase 75,034,395 and 5,002,293 shares of Multi-Link's common stock,
                on a pre-Reverse Split and post-Reverse Split basis, respectively,
                at an
                exercise price of $0.92 per share on a post-Reverse Split basis,
                which are
                held by Mr. Pesin. These warrants expire March 19, 2016. Includes
                7,503,435 and 500,229 shares of Multi-Link's common stock, on a
                pre-Reverse Split and post-Reverse Split basis, respectively, held
                in an
                IRA for the benefit of Christine Pesin, Mr. Pesin's spouse.
CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS
At
      the
      Closing, Multi-Link entered into a Financial Advisory Agreement with Keating
      Securities, LLC ("Keating Securities"), a registered broker-dealer, under which
      Keating Securities was paid $340,000 by Multi-Link for its advisory services
      rendered to Multi-Link in connection with the Merger.
39
The
      licensing agreement with Fleming and Company Pharmaceuticals ("Fleming") for the
      Extendryl® line of products is between Cornerstone BioPharma, Ltd.
      ("Cornerstone") and Auriga and is referred to as the Fleming license agreement.
      Additionally, the sublicensing agreement with Cornerstone for the Extendryl®
line of products is between Cornerstone and Auriga and is referred to as the
      Cornerstone sublicense agreement. During the fiscal year ended March 31, 2006,
      Messrs. Craig Collard and Philip Pesin, Auriga's chairman, sat on the board of
      directors of both Cornerstone and Auriga. Although Mr. Pesin resigned from
      the
      Cornerstone's board in January 2006, he remains a significant stockholder of
      Cornerstone.
During
      the fiscal year ended March 31, 2006, Auriga received royalty income associated
      with the Extendryl® licensing agreement of $21,619 from Cornerstone. This
      Extendryl licensing agreement was revised effective August 1, 2005 whereby
      Auriga pays a royalty to Cornerstone for its sales of Extendryl®. Auriga's
      royalty expense to Cornerstone for the period ended March 31, 2006 amounted
      to
      approximately $492,516.
In
      July
      2005, Auriga entered into an agreement for advisory services with the Sorrento
      Financial Group, LLC ("SFG") an entity owned by Mr. Pesin, Auriga's Chairman,
      Chief Executive Officer and significant stockholder. During the fiscal year
      ended March 31, 2006, Auriga paid $382,583 to SFG for advisory services. On
      April 28, 2006 under an amended and restated agreement, Auriga paid $250,000
      to
      SFG for its financial advice and structuring of a successful private placement
      funding. The amended and restated agreement with SGF expired in accordance
      with
      its terms on April 30, 2006.
During
      the fiscal year ended March 31, 2006, Auriga utilized the legal services of
      Sorrento Law Group, P.C., an entity owned by Mr. Pesin, Auriga's Chairman, Chief
      Executive Officer and significant stockholder, and paid $294,324 to this
      entity.
On
      October 1, 2005, Auriga issued a warrant to purchase 2,000,000 shares of common
      stock at $0.01 per share to Mr. Pesin, Auriga's Chairman, Chief Executive
      Officer and significant stockholder, in exchange for his agreement to personally
      guarantee up to $5,000,000 of Auriga's debt. The warrant was exercised on March
      13, 2006.
On
      November 20, 2005, Auriga sold and issued 150,000 shares of common stock at
      a
      purchase price of $0.01 per share subject to a right of repurchase to Mr.
      Wagoner, a member of Auriga's Board of Directors in conjunction with his
      director agreement.
On
      November 20, 2005, Auriga sold and issued 150,000 shares of common stock at
      a
      purchase price of $0.01 per share to Auriga's outside corporate
      counsel.
On
      December 15, 2005, Auriga entered into a redemption agreement and unsecured
      subordinated promissory note agreement with Craig Collard in connection with
      his
      resignation from Auriga's board of directors. As part of this agreement, Auriga
      repurchased 1,500,000 shares of common stock held by Craig Collard for a per
      share price of $1.50 in exchange for a note. The payment terms of the note
      provide for a $150,000 payment on January 2, 2006, $600,000 on January 2, 2007,
      $750,000 on January 2, 2008 and $750,000 on January 2, 2009. All payments
      occurring after 2006 are subject to an interest rate of 2% per
      annum.
40
On
      March
      29, 2006, Auriga entered into an employment agreement with Philip S. Pesin
      as
      Chief Executive Officer, which provided in part a warrant to purchase 2,500,000
      shares of Common Stock at a price of $1.85 per share in addition to a listing
      bonus of $250,000 upon becoming a publicly traded company. The lisitng bonus
      has
      now been earned as a result of the Closing of the Merger. This employment
      agreement was terminated on May 17, 2006 by the mutual agreement of the parties
      and upon the execution of a new employment agreement with Multi Link
      Telecommunications, Inc. See Employment Agreements.
We
      believe that all of the transactions set forth above were made on terms no
      less
      favorable to us than could have been obtained from unaffiliated third parties.
      We intend that all future transactions with affiliated persons be approved
      by a
      majority of the Board of Directors, including a majority of the independent
      and
      disinterested outside directors on the Board of Directors, and be on terms
      no
      less favorable to us than could be obtained from unaffiliated third
      parties.
SECTION
      16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
      16(a) of the Securities Exchange Act of 1934, as amended, requires Multi-Link's
      directors and executive officers, and persons who beneficially own more than
      10%
      of a registered class of Multi-Link's equity securities, to file reports of
      beneficial ownership and changes in beneficial ownership of Multi-Link's
      securities with the SEC on Forms 3 (Initial Statement of Beneficial Ownership),
      4 (Statement of Changes of Beneficial Ownership of Securities) and 5 (Annual
      Statement of Beneficial Ownership of Securities). Directors, executive officers
      and beneficial owners of more than 10% of Multi-Link's common stock are required
      by SEC regulations to furnish Multi-Link with copies of all Section 16(a) forms
      that they file. Except as otherwise set forth herein, based solely on review
      of
      the copies of such forms furnished to Multi-Link, or written representations
      that no reports were required, Multi-Link believes that for the fiscal year
      ended September 30, 2005 beneficial owners complied with the Section 16(a)
      filing requirements applicable to them in that each officer, director and
      beneficial owner of 10% or more of Multi-Link's securities filed a Form 3 with
      the SEC and has had no change of ownership since such filing.
DESCRIPTION
      OF CAPITAL STOCK
Multi-Link
Multi-Link
's
      authorized capital consists of 150,000,000 shares of Common Stock, no par value,
      and 5,000,000 shares of Preferred Stock, $0.01 par value, of which 1,200,000
      shares have been designated as Series A Convertible Preferred Stock. There
      are
      currently, issued and outstanding, 37,215,913 shares of Common Stock and
      1,000,042 shares of Series A Convertible Preferred Stock ("Preferred Stock"),
      convertible into 494,977,491 shares of Common Stock.
The
      holders of Common Stock are entitled to one vote for each share held of record
      on all matters submitted to a vote of the holders of Common Stock. Subject
      to
      preferences applicable to any outstanding Preferred Stock, holders of Common
      Stock are entitled to receive ratably such dividends as may be declared by
      the
      Board of Directors out of funds legally available therefore. In the event of
      a
      liquidation, dissolution or winding up of Multi-Link, the holders of Common
      Stock are entitled to share ratably all assets remaining after payment of
      liabilities and the liquidation preference of any Preferred Stock. Holders
      of
      Common Stock have no preemptive or subscription rights, and there are no
      redemption or conversion rights with respect to such shares. All outstanding
      shares of Common Stock are fully paid and non-assessable.
41
In
      the
      event of any liquidation, dissolution or winding up of Multi-Link, the assets
      of
      Multi-Link available for distribution to shareholders will be distributed among
      the holders of Preferred Stock and the holders of any other class of equity
      securities of Multi-Link, including its common stock, pro rata, on an
      as-converted-to-common-stock basis, after the payment to the holders of
      Preferred Stock of a di minimus par value amount.
The
      holders of Preferred Stock are entitled to dividends in the event that
      Multi-Link pays cash or other dividends in property to holders of outstanding
      shares of its common stock, which dividends would be made pro rata, on an
      as-converted-to-common-stock basis.
The
      Conversion Rate applicable to the Preferred Stock is subject to adjustment
      from
      time to time in the event of any stock dividend, stock split, reverse stock
      split, reorganization or other corporate event affecting the outstanding capital
      stock of Multi-Link (including the Reverse Split).
During
      any period in which the Preferred Stock is outstanding, Multi-Link is not
      permitted to, without first obtaining the approval (by vote or written consent,
      as provided by law) of the holders of at least a majority of the then
      outstanding Preferred Stock, voting as a separate class:
-
create
                (by reclassification or otherwise) any new class or series of stock
                having
                rights, preferences or privileges equal or senior to the Series A
                Convertible Preferred Stock.
-
directly
                or indirectly, alter or change the rights, preferences or privileges
                of
                the Series A Convertible Preferred Stock.
-
amend
                Multi-Link's Articles of Incorporation in a manner that materially
                adversely affects the rights, preferences or privileges of the holders
                of
                the Series A Convertible Preferred
                Stock.
-
increase
                or decrease the authorized number of shares of preferred stock of
                Multi-Link as a whole;
-
liquidate
                or wind-up Multi-Link; or
-
redeem,
                purchase or otherwise acquire (or pay into or set funds aside for
                a
                sinking fund for such purpose) any share or shares of Preferred Stock
                or
                common stock; provided, however, that this restriction will not apply
                to
                the repurchase of shares of common stock from employees, officers,
                directors, consultants or other persons performing services for Multi-Link
                or any subsidiary pursuant to agreements under which Multi-Link has
                the
                option to repurchase such shares at cost upon the occurrence of certain
                events, such as the termination of employment, or through the exercise
                of
                any right of first refusal.
42
Upon
      the
      occurrence of the Mandatory Conversion, or any other redemption or
      extinguishment of the Series A Convertible Preferred Stock, the shares
      converted, redeemed or extinguished will be automatically returned to the status
      of authorized and unissued shares of preferred stock, available for future
      designation and issuance pursuant to the terms of Multi-Link's Certificate of
      Incorporation.
Multi-Link's
      Articles of Amendment setting forth the Designations, Preferences, Rights and
      Limitations of Series A Convertible Preferred Stock, as filed with the Secretary
      of State of the State of Colorado, is attached as Exhibit 4.1 to this Current
      Report on Form 8-K, and is incorporated herein by reference.
Auriga
Auriga
      is
      authorized under its Articles of Incorporation to issue 50,000,000 shares of
      common stock. Prior to the Closing, 16,490,990 shares of Auriga's common stock
      were issued and outstanding, fully paid, and non-assessable. These shares were
      exchanged for Preferred Stock of Multi-Link in the Merger. All of these shares
      are now owned by Multi-Link.
SECTION
      3 - SECURITIES AND TRADING MARKETS
ITEM
      3.02 Unregistered Sales of Equity Securities
As
      part
      of the formation and reorganization of Auriga in April 2005, Auriga issued
      11,146,634 shares of its Common Stock in exchange for all of the issued and
      outstanding capital stock and issued and outstanding membership interests of
      Tryon Labs, Inc. and Auriga Pharmaceuticals, LLC, respectively. The issuance
      of
      such shares was made in reliance on the exemption from registration requirements
      of the Securities Act, pursuant to Section 4(2) thereof.
In
      April
      2005, Auriga also issued 1,600,000 shares of its Common Stock in exchange for
      royalty rights in and to Extendryl products from Champion Pharmaceuticals,
      Inc.
      The issuance of such shares was made in reliance on the exemption from
      registration requirements of the Securities Act pursuant to Section 4(2)
      thereof.
In
      April
      2005, Auriga sold in a private placement 1,500,000 shares of its Common Stock
      at
      $1.00 per share for an aggregate amount of $1,500,000. The shares were sold
      under Rule 506 of Regulation D promulgated under the Securities Act of 1933,
      as
      amended, (the "Securities Act") to "accredited investors" as such term is
      defined under such Regulation D.
On
      April
      28, 2006, Auriga closed a private placement of 1,478,078 of its Common Stock
      at
      a purchase price of $1.85 per share under Rule 506 of Regulation D promulgated
      under the Securities Act to "accredited investors" as such term is defined under
      such Regulation D. Auriga received $2,734,844 gross proceeds from the sale
      of
      the shares. In connection therewith, Sorrento Financial Group, LLC, an entity
      owned by Auriga Chairman, CEO and significant shareholder, received $250,000
      for
      its financial services in structuring the private placement.
43
At
      the
      Closing, pursuant to the Merger Agreement, all of the stockholders of Auriga
      exchanged their shares of Auriga Common Stock for 1,000,042 shares of Multi-Link
      Series A Convertible Preferred Stock ("Preferred Stock"), which will be
      converted into 494,977,491 shares of Multi-Link Common Stock.
In
      addition each outstanding Auriga option and warrant to purchase shares of Auriga
      Common Stock was assumed by Multi-Link and will be converted into an option
      or
      warrant to purchase shares of Multi-Link Common Stock, with the numbers of
      shares and exercise price being adjusted accordingly. Since Multi-Link is
      presently authorized under its Certificate of Incorporation to issue only
      150,000,000 shares of Common Stock, it will undertake a reverse stock split
      as
      described in Section 2.2 above to enable the conversion of the Preferred Stock
      into Common Stock. The issuance of the Preferred Stock and, upon conversion,
      the
      Common Stock was done pursuant to an exemption from registration in accordance
      with Section 4(2) and/or Regulation D under the Securities Act.
SECTION
      4 - MATTERS RELATED TO ACCOUNTANTS AND FINANCIAL
      STATEMENTS
ITEM
      4.01 Changes in Registrant's Certifying Accountant.
(a)
      Effective as of May 16, 2006, the Board of Directors of Multi-Link dismissed
      Jaspers + Hall, PC as Multi-Link's independent registered public accounting
      firm.
The
      reports of Jaspers + Hall, PC on the financial statements of Multi-Link, under
      the date of December 22, 2005, as of and for the fiscal year ended September
      30,
      2005 did not contain an adverse opinion or disclaimer of opinion and were not
      qualified or modified as to uncertainty, audit scope or accounting principles,
      except the 2005 report did contain an explanatory paragraph related to
      Multi-Link's ability to continue as a going concern.
During
      the fiscal year ended September 30, 2005 and through the interim periods
      subsequent thereto, there have been no disagreements with Jaspers + Hall, PC
      on
      any matter of accounting principles or practices, financial statement disclosure
      or auditing scope or procedure, which disagreements if not resolved to the
      satisfaction of Jaspers + Hall, PC would have caused Jaspers + Hall, PC to
      make
      reference to such disagreement in its report on the financial statements for
      such years and period.
During
      the fiscal year ended September 30, 2005 and through the interim periods
      subsequent thereto, there have been no events requiring identification in
      response to Item 304(a)(1)(iv)(B) of Regulation S-B.
Multi-Link
      has requested that Jaspers + Hall, PC furnish it with a letter addressed to
      the
      SEC stating whether or not it agrees with the above statements. A copy of such
      letter, dated May 18, 2006, is filed as Exhibit 16.0 to this Form
      8-K.
44
(b) 
      Effective as of May 17, 2006, the Board of Directors appointed Williams &
Webster, P.S. as Multi-Link's independent registered public accounting firm and
      engaged Williams & Webster, P.S. to audit the financial statements of
      Multi-Link for the fiscal year ended March 31, 2007. Williams & Webster,
      P.S. has been engaged as the independent auditors of Auriga since April
      2005.
SECTION
      5 - CORPORATE GOVERNANCE AND MANAGEMENT
ITEM
      5.01 Changes in Control of Registrant.
As
      part
      of the Merger, Kevin Keating resigned from his position as the sole director
      of
      Multi-Link effective as of the Closing. Philip Pesin, Chief Executive Officer
      of
      Auriga was appointed as Chairman, Chief Executive Officer and Chief Financial
      Officer of Multi-Link, and Dayne Wagoner, a director of Auriga, was appointed
      Secretary and a director of Multi-Link, each effective as of the
      Closing.
Also
      as
      part of the Merger, Multi-Link issued the shares of its Preferred Stock to
      the
      former stockholders of Auriga as described under Items 2.2 and
      3.02.
ITEM
      5.02 Departure of Directors or Principal Officers; Election of Directors;
      Appointment of Principal Officers.
As
      part
      of the Merger, Kevin Keating resigned from his position as a director,
      President, Treasurer and Secretary of Multi-Link effective as of the Closing.
      Philip Pesin, Chief Executive Officer of Auriga was appointed as Chairman,
      Chief
      Executive Officer and Chief Financial Officer of Multi-Link, and Dayne Wagoner,
      a director of Auriga, was appointed Secretary and a director of Multi-Link,
      each
      effective as of the Closing. The business experience of Messrs. Pesin and
      Wagoner is shown below.
Philip
      Pesin
(Age
      32)
Chairman,
      Chief Executive Officer and Chief Financial Officer
Philip
      S.
      Pesin was a founder and director of Auriga since its inception in April 2005.
      He
      was appointed Chairman of the Board in December 2005 and became CEO, Treasurer
      and Secretary on March 29, 2006. Mr. Pesin is an attorney and certified public
      accountant. He is the founder of the Sorrento Financial Group, LLC, a financial
      services company specializing in private equity and business consulting. Mr.
      Pesin is actively involved in his community and sits on the board of directors
      of the Boys & Girls Club of the Southwest. Mr. Pesin is a member of the bar
      associations of California and the District of Columbia, and holds a Master
      of
      Laws degree from The Georgetown University Law Center, a Juris Doctor from
      the
      University of San Diego School of Law, and a Bachelor of Science in finance
      from
      The University of Arizona.
45
Dayne
      Wagoner
(Age
      41)
Secretary
      and Director
Dayne
      Wagoner became a director of Auriga in December 2005. In 1995 Mr. Wagoner
      founded Edge Development, Inc. and from that time to the present he has been
      the
      CEO. Edge Development, Inc. is rated 192 out of the top building contractors
      in
      the United States.
ITEM
      5.03 Amendments to Articles of Incorporation or Bylaws; Changes in Fiscal
      Year.
Effective
      as of May 17, 2006, the Board of Directors of Multi-Link approved a change
      in
      Multi-Link's fiscal year from September 30 to March 31. Multi-Link will account
      for the transaction contemplated in the Merger Agreement as a "reverse
      acquisition." Consequently, Multi-Link will not file a transition report
      reflecting the change in its fiscal year to that of Auriga, since for accounting
      purposes, Auriga is deemed to be the "accounting acquirer" in the "reverse
      acquisition."
ITEM
      5.06 Change in Shell Company Status.
Please
      see the discussion in Item 2.01 above relating to the Merger with Auriga, which
      discussion is incorporated herein by reference. As a result of the Merger,
      Multi-Link ceased to be a shell company.
SECTION
      9- FINANCIAL STATEMENTS AND EXHIBITS
ITEM
      9.01 F
inancial
      Statements and Exhibits
.
(a) 
      Financial Statements of Business Acquired.
Audited
                Financial Statements of Auriga
Report
                of Independent Registered Public Accounting Firm
F-1
Consolidated
                Balance Sheet at March 31, 2006
F-2
Consolidated
                Statement of Operations for the Period From April 12, 2005 (date
                of
                inception) to Year Ended March 31, 2006.
F-3
Consolidated
                Statement of Stockholders' Deficit for the Period From April 12, 2005
                (date of inception) to Year Ended March 31, 2006.
F-4
Consolidated
                Statements of Cash Flows for the Period From April 12, 2005 (date
                of
                inception) to Year Ended March 31, 2006.
F-5
Notes
                to Consolidated Financial Statements
F-6
(b)
Pro
                Forma Financial Information.
None
                required.
46
(c)
Exhibits.
2.1
Agreement
                and Plan of Merger dated as of May 4, 2006, by and among Multi-Link
                Telecommunications, Inc., Multi-Link Acquisition, Inc. and Auriga
                Laboratories, Inc. (previously filed)
2.2
Certificate
                of Merger of Domestic Corporation as filed with the Delaware Secretary
                of
                State on May 17, 2006
4.1
Articles
                of Amendment to Articles of Incorporation of Multi-Link regarding
                the
                designation rights and limitations of the Series A Convertible Preferred
                Stock.
10.1
Financial
                Advisory Agreement dated effective as of May 17, 2006, by and among
                Keating Securities, LLC and Multi-Link Telecommunications,
                Inc.
10.2
Employment
                Agreement dated May 17, 2006 by and between Philip S. Pesin and Multi
                Link
                Telecommunications, Inc.
10.3
Lease
                Agreement entered into by and between VEF Atlanta Office TWO, LLC
                and
                Auriga Laboratories, Inc. dated June 1, 2005.
10.4
Office
                Lease Agreement entered into by and between Union Carbide Corporation,
                Danbury Buildings Co., L.P. and Auriga Laboratories,
                Inc.
10.5
Sublease
                agreement dated March 21, 2006 by and between Auriga Laboratories,
                Inc.
                and Exstream Software, Inc.
10.6
Sublease
                agreement between Union Carbide Corp., Auriga Laboratories, Inc.
                and The
                Keveke Company, LLC.
10.7
License
                entered into by and between Champion Pharmaceuticals, Inc. and Tryon
                Labs,
                Inc. dated October 1, 2004
10.8
License
                Agreement entered into by and between Fleming and Company,
                Pharmaceuticals, Tryon Labs, Inc., Champion Pharmaceuticals, Inc.
                and
                Cornerstone Biopharma, Inc. dated December 15, 2004.
10.9
License
                Agreement entered into by and between Tryon Laboratories, Inc. and
                Cornerstone Laboratories, Inc. dated January 1, 2005
10.10
License
                Agreement entered into by and between Tryon Laboratories, Inc.,
                Cornerstone Biopharma, Ltd. and Auriga Laboratories, Inc. dated May
                24,
                2005
10.11
First
                Amended License Agreement entered into by and between Tryon Laboratories,
                Inc., Cornerstone Biopharma, Ltd. and Auriga Laboratories, Inc. dated
                August 25, 2006
10.12
Commercial
                Outsourcing Services Agreement by and between Integrated Commercialization
                Solutions, Inc. and Auriga Pharmaceuticals, LLC dated June 8,
                2005
47
10.13
Agreement
                for Development Services by and between Balchem Corporation and Auriga
                Laboratories, Inc. dated April 10, 2006
10.14
Stock
                Purchase Agreement, Unsecured Subordinated Promissory Note between
                Collard
                Family Limited Partnership and Auriga Laboratories, Inc. dated December
                13, 2005
10.15
Indemnification
                Agreement between Multi-Link Telecommunications, Inc. and Philip
                S. Pesin
                dated May 17, 2006
10.16
Indemnification
                Agreement between Multi-Link Telecommunications, Inc. and Dayne Wagoner
                dated May 17, 2006
10.17
Warrant
                issued by Auriga Laboratories, Inc. to Philip S. Pesin dated March
                29,
                2006.
10.18
Warrant
                issued by Auriga Laboratories, Inc. to Trilogy Capital Partners,
                Inc.
                dated April 12, 2006.
10.19
Warrant
                issued by Auriga Laboratories, Inc. to Trilogy Capital Partners,
                Inc.
                dated April 12, 2006.
10.20
Class
                A Warrant issued
by
                Auriga Laboratories, Inc.
to
                Ryan Bowers dated April 28, 2006.
10.21
Class
                A Warrant issued by Auriga Laboratories, Inc. to Marc Seward dated
                April
                28, 2006.
16.0
Letter
                from Jaspers & Hall, PC dated May 18, 2006
99.1
Press
                Release dated May 17, 2006
48
SIGNATURES
Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned hereunto
      duly authorized.
MULTI-LINK
                TELECOMMUNICATIONS, INC.
Date:
May
                18, 2006
By:
/s/
                Philip S. Pesin
Philip
                S. Pesin
Chief
                Executive Officer
49
Auriga
        Laboratories, Inc.
March
        31,
        2006
CONTENTS
Report
                  of Independent Registered Public Accounting Firm
F-1
Balance
                  Sheets
F-2
Statements
                  of Operations
F-3
Statement
                  of Stockholders' Deficit
F-4
Statements
                  of Cash Flows
F-5
Notes
                  to Financial Statements
F-6
Williams
                  & Webster, P.S.
Certified
                  Public Accountants & Business Consultants
Auriga
        Laboratories, Inc.
Norcross,
        Georgia
REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We
        have
        audited the accompanying balance sheet of Auriga Laboratories, Inc. as of
        March
        31,
2006,
        and
        the related statements of operations, stockholders' deficit and cash flows
        for
        the period
from
        April 12, 2005 (inception) to March 31, 2006. These financial statements
        are the
        responsibility of the Company's management. Our responsibility is to express
        an
        opinion on these financial statements based on our audit.
We
        conducted our audit in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of 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 audit provides a
        reasonable basis for our opinion.
In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of Auriga Laboratories, Inc. as
        of
        March 31, 2006 and the results of its
operations,
        stockholders' deficit and its cash flows for the period from April 12, 2005
        (inception)
to March
        31, 2006 in conformity with accounting principles generally accepted in the
        United States of America.
Williams
        & Webster, P.S.
Certified
        Public Accountants
Spokane,
        Washington
April
        27,
        2006
Members
of
Private
        Companies Practice Section, SEC Practice Section, AICPA and WSCPA
Bank
        of America Financial Center
·
601
        W
        Riverside, Suite 1940
·
Spokane,
        WA 99201
Phone
        (509) 838-5111 · Fax (509) 838-5114
·
www
.williams-webster.com
F-1
AURIGA
          LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED
          BALANCE SHEET
MARCH
          31, 2006
ASSETS
CURRENT
                    ASSETS
Cash
                    and cash equivalents
$
504,344
Accounts
                    receivable, net
774,722
Inventory
308,708
Prepaid
                    expenses
119,491
Total
                    Current Assets
1,707,265
PROPERTY
                    AND EQUIPMENT, net
311,125
OTHER
                    ASSETS
Goodwill
92,316
Deposits
22,724
Total
                    Other Assets
115,040
TOTAL
                    ASSETS
$
2,133,430
LIABILITIES
                    AND STOCKHOLDERS' DEFICIT
CURRENT
                    LIABILITIES
Accounts
                    payable
$
504,168
Accrued
                    expenses
281,785
Bank
                    notes payable
234,813
Royalties
                    payable
492,516
Related
                    party loan, current portion
511,751
Deposit
                    on stock subscriptions
578,627
Total
                    Current Liabilities
2,603,660
LONG-TERM
                    DEBT
Related
                    party loan, less current portion
1,414,802
Total
                    Long-Term Debt
1,414,802
Total
                    Liabilities
4,018,462
COMMITMENTS
                    AND CONTINGENCIES
-
STOCKHOLDERS'
                    DEFICIT
Common
                    stock, $0.0001 par value, 50,000,000 shares
authorized;
                    18,762,912 shares
issued
                    and 15,012,912 outstanding
1,876
Additional
                    paid-in capital
3,355,200
Stock
                    subscriptions receivable
(21,500
)
Treasury
                    stock, 3,750,000 shares purchased, at cost
(2,070,555
)
Accumulated
                    deficit
(3,150,053
)
Total
                    Stockholders' Deficit
(1,885,032
)
TOTAL
                    LIABILITIES AND
STOCKHOLDERS'
                    DEFICIT
$
2,133,430
The
          accompanying notes are an integral part of these financial
          statements.
F-2
AURIGA
          LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED
          STATEMENT OF OPERATIONS
FROM
          APRIL 12, 2005 (DATE OF INCEPTION) TO MARCH 31, 2006
REVENUES
Products
$
6,575,254
Royalties
                    from related party
21,619
Total
                    Revenues
6,596,873
COST
                    OF GOODS SOLD
Materials
                    and supplies
1,048,357
Royalties
1,443,679
Other
                    cost of sales
134,452
Total
                    Cost of Goods Sold
2,626,488
GROSS
                    PROFIT
3,970,385
GENERAL
                    AND ADMINISTRATIVE EXPENSES
Marketing
                    and advertising
867,244
Legal
                    and professional fees
735,805
Consulting
317,351
Labor
                    and benefits
2,060,208
Travel
414,968
Other
                    general and administrative expenses
576,640
Non-cash
                    professional fees
92,116
Total
                    General and Administrative Expenses
5,064,332
OPERATING
                    LOSS
(1,093,947
)
OTHER
                    INCOME(EXPENSES)
Interest
                    income
1,778
Interest
                    expense
(71,292
)
Non-cash
                    financing expense
(1,986,592
)
Total
                    Other Income(Expenses)
(2,056,106
)
NET
                    LOSS
$
(3,150,053
)
NET
                    LOSS PER COMMON SHARE,
BASIC
                    AND DILUTED
$
(0.24
)
WEIGHTED
                    AVERAGE NUMBER OF COMMON
SHARES
                    OUTSTANDING, BASIC AND DILUTED
12,975,107
The
          accompanying notes are an integral part of these financial
          statements.
F-3
AURIGA
          LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED
          STATEMENT OF STOCKHOLDERS' DEFICIT
FROM
          APRIL 12, 2005 (DATE OF INCEPTION) TO MARCH 31, 2006
Common
                    Stock
Additional
Stock
Treasury
                    Stock
Accumulated
                    Deficit
Number
Paid-in
Subscriptions
Number
of
                    Shares
Amount
Capital
Receivable
of
                    Shares
Amount
Amount
Total
Stock
                    issued in connection with the Company's
reorganization
11,156,624
$
1,115
$
1,115
Stock
                    issued in exchange for royalty rights
1,600,000
160
160
at
                    $0.0001 per common share
Stock
                    issued to member of the board of directors
150,000
15
$
1,485
$
(1,500
)
-
at
                    $0.01 per common share
Stock
                    issued in connection with legal counsel
150,000
15
1,485
1,500
at
                    $0.01 per common share
Stock
                    issued in connection with employment
2,250,000
225
22,275
22,500
Stock
                    issued for cash at
$1.00
                    per share, net of offering costs
1,456,288
146
1,231,447
1,231,593
Warrant
                    exercised for services and stock subscription
2,000,000
200
2,098,508
(20,000
)
2,078,708
at
                    $1.00 per common share
Stock
                    repurchased at $1.37
1,500,000
$
(2,048,055
)
(2,048,055
)
Stock
                    repurchased in connection with employment
2,250,000
(22,500
)
(22,500
)
agreements
                    at par value
Net
                    loss for the year ended
$
(3,150,053
)
(3,150,053
)
Balance,
                    March 31, 2006
18,762,912
$
1,876
$
3,355,200
$
(21,500
)
3,750,000
$
(2,070,555
)
$
(3,150,053
)
$
(1,885,032
)
The
        accompanying notes are an integral part of these financial
        statements.
F-4
AURIGA
          LABORATORIES, INC. AND SUBSIDIARIES
CONSOLIDATED
          STATEMENT OF CASH FLOWS
FROM
          APRIL 12, 2005 (DATE OF INCEPTION) TO MARCH 31, 2006
CASH
                    FLOWS FROM OPERATING ACTIVITIES:
Net
                    loss
$
(3,150,053
)
Adjustments
                    to reconcile net loss to net cash
flows
                    provided (used) by operating activities:
Depreciation
42,147
Non-cash
                    expenses
2,078,708
Amortization
                    of note payable discount
28,498
Changes
                    in assets and liabilities
Receivables
(705,707
)
Inventory
(308,708
)
Prepaid
                    expenses
(119,491
)
Deposits
(22,724
)
Accounts
                    payable
453,497
Accrued
                    expenses
272,509
Royalties
                    payable
492,516
Net
                    cash used by operating activities
(938,808
)
CASH
                    FLOWS FROM INVESTING ACTIVITIES:
Purchase
                    of fixed assets
(353,272
)
Net
                    cash used by investing activities
(353,272
)
CASH
                    FLOWS FROM FINANCING ACTIVITIES:
Net
                    proceeds from stock sales
1,255,484
Net
                    proceeds on bank notes payable
234,813
Payments
                    on related party loans
(250,000
)
Proceeds
                    from deposits on stock subscriptions
578,627
Repurchase
                    of treasury stock
(22,500
)
Net
                    cash provided by financing activities
1,796,424
Net
                    increase in cash
504,344
Cash,
                    beginning of period
-
Cash,
                    end of period
$
504,344
SUPPLEMENTAL
                    CASH FLOW DISCLOSURES:
Interest
                    paid
$
42,794
NON-CASH
                    INVESTING AND FINANCING:
Stock
                    repurchased in exchange for note payable
$
2,250,000
Warrant
                    exercised for stock
20,000
Stock
                    issued to member of board of directors
1,500
Assets
                    purchased by acquisition/reorganization:
Receivables
69,015
Goodwill
92,316
Liabilities
                    assumed by acquisition:
Accounts
                    payable and accrued expenses
59,947
Related
                    party loan
100,000
The
          accompanying notes are an integral part of these financial
          statements.
F-5
AURIGA
        LABORATORIES,
INC.
        AND
SUBSIDIARIES
NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
March
31,
2006
NOTE
1-
BUSINESS
        ORGANIZATION
Auriga
        Laboratories, Inc. ("Auriga") was formed as a Delaware corporation in April
        12,
        2005 as part of a reorganization transaction involving several companies
        owned
        by the founders and is authorized to issue 50,000,000 shares of $0.0001 par
        value common stock. In April 2005, all of the stock of Tryon Labs, Inc. (a
        Delaware corporation) and Auriga Pharmaceuticals, LLC (a Delaware limited
        liability corporation) was contributed to Auriga in exchange for stock in
        Auriga. As part of the reorganization transaction, Tryon Labs, Inc. changed
        its
        name to Auriga Development, Inc. and operates as a wholly-owned subsidiary
        engaged in drug development. Auriga Pharmaceuticals, LLC also became a
        wholly-owned subsidiary of Auriga, and is engaged in the sales and marketing
        of
        Company products.
Auriga
        Laboratories, Inc. and subsidiaries (hereinafter, "the Company") is a
        pharmaceutical company organized to develop pharmaceutical products using
        patented delivery technologies in niche markets while marketing and selling
        prescription pharmaceutical products.
On
        March
        30, 2006, Auriga entered into a letter of intent with Multi-Link
        Telecommunications, Inc. ("Multi-Link"), a Colorado corporation, whereby
        Multi-Link would acquire the Company. Multi-Link is currently a public "shell"
        company with nominal assets whose sole business has been to identify, evaluate
        and investigate various companies for the purpose of acquiring a company
        with an
        operating business with the intent of continuing the acquired company's business
        as a publicly held company.
Under
        the
        transactions contemplated under the letter of intent, Multi-Link would issue
        restricted shares of its convertible preferred stock, the designations, rights
        and preferences of which will be established by Multi-Link's board of directors
        prior to closing ("Series A Preferred Shares"), to the holders of the Company's
        outstanding equity securities including any securities sold and issued to
        accredited investors participating in the Company's limited offering pursuant
        to
        its private placement memorandum (collectively, the "Auriga Stockholders").
        The
        closing of the proposed acquisition would be subject to the Company's completion
        of a private placement of its equity securities to certain accredited investors
        of not less than $750,000 ("Offering").
The
        Series A Preferred Shares that would be issued to the Company's Stockholders
        together with any options, warrants and other convertible securities of the
        Company assumed by Multi-Link in connection with the acquisition of the Company
        would, in the aggregate, represent no less than 95% of the issued and
        outstanding shares of common stock of Multi-Link on a fully diluted and
        as-converted basis following the acquisition of the Company. In exchange
        for the
        Series A Preferred Shares that would be issued to the Company's Stockholders,
        such Auriga Stockholders would transfer to Multi-Link or a newly-fouued
        wholly-owned subsidiary of Multi-Link, 100% of the outstanding capital stock
        of
        the Company. As a result, the Company would become a wholly-owned subsidiary
        of
        Multi-Link following the acquisition. At the close of the acquisition, it
        is
        contemplated that a new board of directors would be designated by the Company.
        The current stockholders of Multi-Link are expected to own no more than
        approximately 5% of the issued and outstanding common stock of Multi-Link
        after
        completion of the acquisition of the Company and the Offering, calculated
        on a
        fully diluted and as-converted basis.
F-6
AURIGA
        LABORATORIES,
INC.
        AND
SUBSIDIARIES
NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS
March
31,
2006
The
        completion of the acquisition is subject to certain conditions to closing,
        including but not limited to, the negotiation and execution of a definitive
        acquisition agreement, the delivery of audited financial statements of the
        Company prepared in accordance with generally accepted accounting principles
        in
        the United States of America, the approval by the Company's board and
        stockholders and Multi-Link's board.
The
        Company anticipates that the acquisition agreement would also provide that
        Multi-Link take the following corporate actions ("Actions") promptly following
        the closing of the acquisition: (a) change the company name to a name selected
        by Auriga; and (b) increase Multi-Link's authorized number of shares of common
        stock and a reverse stock split of Multi-Link's common stock, on such terms
        as
        mutually agreed to by the parties, to permit Multi-Link to issue the additional
        shares of its common stock to be issued upon the conversion of the Series
        A
        Preferred Shares and to allow Multi-Link to have additional shares of authorized
        and unissued common stock for other corporate purposes. The Series A Preferred
        Shares will automatically convert without further action of the holder thereof
        into shares of Multi-Link's common stock upon stockholder approval of the
        Actions and compliance with the waiting periods under applicable securities
        laws.
Subject
        to the satisfaction of the above conditions and other customary conditions,
        the
        acquisition is presently expected to close on or about May 15, 2006. However,
        there can be no assurances that the acquisition or the Offering will be
        completed on the timeline anticipated or at all.
In
        connection with the above transaction, Multi-Link filed a Form 8-K. with
        the
        Securities and Exchange Commission on March 30, 2006.
NOTE
        2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This
        summary of significant accounting policies of the Company is presented to
        assist
        in understanding the Company's financial statements. The financial statements
        and notes are representations of the Company's management, which is responsible
        for their integrity and objectivity. These accounting policies conform to
        accounting principles generally accepted in the United States of America,
        and
        have been consistently applied in the preparation of the financial
        statements.
Basis
        of Accounting
The
        Company's financial statements are prepared using the accrual basis of
        accounting in accordance with accounting principles generally accepted in
        the
        United States of America. The Company has a March 31 year-end. References
        to
        "fiscal 2006" are for the period April 12, 2005 to March 31, 2006.
F-7
AURIGA
          LABORATORIES,
INC.
          AND
SUBSIDIARIES
NOTES
          TO
          CONSOLIDATED FINANCIAL STATEMENTS
March
31,
2006
Principles
        of Consolidation
The
        accompanying consolidated financial statements include all accounts of the
        Company and its wholly owned subsidiaries. All significant intercompany accounts
        and transactions have been eliminated in consolidation.
Estimates
The
        process of preparing financial statements in conformity with accounting
        principles generally accepted in the United States of America requires the
        use
        of estimates and assumptions regarding certain types of assets, liabilities,
        revenues, and expenses. Such estimates primarily relate to unsettled
        transactions and events as of the date of the financial statements. Accordingly,
        upon settlement, actual results may differ from estimated amounts.
Fair
        Value of Financial Instruments
The
        Company's financial instruments as defined by Statement of Financial Accounting
        Standards No. 107, "Disclosures about Fair Value of Financial Instruments,"
        include cash, receivables, prepaid expenses, payables, accrued expenses,
        royalties payable and short-term borrowings. All instruments are accounted
        for
        on an historical cost basis, which, due to the short maturity of these financial
        instruments, approximates fair value at March 31, 2006.
Cash
        and Cash Equivalents
The
        Company considers all highly liquid investments, with a maturity of three
        months
        or less at the date of acquisition, to be cash equivalents.
Accounts
        Receivable
The
        Company carries its accounts receivable at net realizable value. On a periodic
        basis, the Company evaluates its accounts receivable and establishes an
        allowance for doubtful accounts, based upon the aging of accounts receivable
        over 180 days and current credit conditions. As of March 31, 2006, none of
        the
        Company's accounts receivable accounts were over 180 days. The Company's
        policy
        is not to accrue interest on trade receivables. The Company has recorded
        a
        $56,836 allowance for doubtful accounts as of March 31, 2006.
Inventory
The
        Company maintains an inventory of pharmaceutical products and samples.
        Inventories are stated at the lower of cost or market. Cost has been determined
        by using the first-in, first-out method. As of March 31, 2006, the Company's
        inventory consisted of the following:
Phannaceutical
                    products
$
214,300
Pharmaceutical
                    samples
94,408
Total
$
308,708
Property
        and Equipment
Property
        and equipment are recorded at cost and depreciated using the straight-line
        method over estimated useful lives of three to five years. See Note
        3.
F-8
AURIGA
            LABORATORIES,
INC.
            AND
SUBSIDIARIES
NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
March
31,
2006
Long-Lived
        Assets
In
        October 2001, the Financial Accounting Standards Board issued Statement of
        Financial Accounting Standards No. 144, "Accounting for the Impairment or
        Disposal of Long-Lived Assets" (hereinafter "SFAS No. 144"). This standard
        establishes a single accounting model for long-lived assets to be disposed
        of by
        sale, including discontinued operations. SFAS No. 144 requires that these
        long-lived assets be measured at the lower of carrying amount or fair value
        less
        cost to sell, whether reported in continuing operations or discontinued
        operations. The Company has long-term assets consisting of $22,724 relating
        to
        rent deposits.
Goodwill
        and Other Intangible Assets
Under
        the
        provisions of Statement of Financial Accounting Standards No. 141, "Business
        Combinations," and Statement of Financial Accounting Standards No. 142,
        "Goodwill and Other Intangible Assets" ("SFAS No. 142"), all business
        combinations are accounted for using the purchase method and goodwill and
        intangible assets with indefinite useful lives are not amortized but instead
        are
        tested for impairment annually, or more frequently, if facts and circumstances
        indicate such assets may be impaired. The only intangible asset the Company
        classifies as indefinite lives is goodwill. SFAS No. 142 requires testing
        of
        intangible assets with indefinite lives and goodwill for impairment at least
        annually. The Company has performed its annual test and has determined no
        impairment adjustment is required.
Compensated
        Absences
Employees
        of the Company are entitled to paid vacation, paid sick days and personal
        days
        off depending on job classification, length of service and other factors.
        The
        Company has a policy of providing for earned but unused vacation and a provision
        has been recorded in the accompanying financial statements as of March 31,
        2006
        in the amount of $22,472.
Revenue
        Recognition
The
        Company recognizes revenue from the sale of pharmaceutical products, including
        shipping fees, if any, when title to the products is transferred to the customer
        (which usually occurs on delivery) and when collectibility is reasonably
        assured.
Revenue
        from sales of the Company's products is recorded, net of allowances. According
        to the teens of sales contracts, a customer may return product up to a maximum
        amount and under certain conditions. Allowances are calculated based upon
        current economic conditions and the underlying contractual terms. Royalty
        revenue is recognized when earned.
The
        Company records a sales return allowance for product returns and contractual
        rebates as product is sold. At March 31, 2006, the balance in the allowance
        account was $76,837.
Treasury
        Stock
The
        Company may from time to time reacquire common stock based on agreements
        to
        repurchase such stock in certain instances. The Company may dispose of such
        treasury shares for such consideration as may be determined from time to
        time by
        the board of directors. When the Company reacquires common stock by issuing
        a
        note, the Company records the securities as treasury stock. Treasury stock
        is
        considered cancelled when the related note is paid off.
F-9
AURIGA
              LABORATORIES,
INC.
              AND
SUBSIDIARIES
NOTES
              TO
              CONSOLIDATED FINANCIAL STATEMENTS
March
31,
2006
Cost
        of Sales
Cost
        of
        sales consists of the purchase price of materials and supplies, freight,
        royalties and other direct costs associated with distribution.
Research
        and Development
Research
        and development expenses are charged to operations as incurred. The Company's
        research and development expenses for the period ended March 31, 2006 were
        $91,130.
Advertising
        and Marketing
Advertising
        and marketing costs are charged to operations in the period incurred. The
        Company's advertising and marketing expenses for the period ended March 31,
        2006
        were $867,244.
Accounting
        for Stock Options and Warrants Granted to Employees and
        Non-employees
In
        December 2004, the Financial Accounting Standards Board issued a revision
        to
        Statement of Financial Accounting Standards No. 123R, "Accounting for Stock
        Based Compensation." This statement supercedes APB Opinion No. 25, "Accounting
        for Stock Issued to Employees," and its related implementation guidance.
        This
        statement establishes standards for the accounting for transactions in which
        an
        entity exchanges its equity instruments for goods or services. It also addresses
        transactions in which an entity incurs liabilities in exchange for goods
        or
        services that are based on the fair value of the entity's equity instruments
        or
        that may be settled by the issuance of those equity instruments. This statement
        focuses primarily on accounting for transactions in which an entity obtains
        employee services in share-based payment transactions. This statement does
        not
        change the accounting guidance for share based payment transactions with
        parties
        other than employees provided in Statement of Financial Accounting Standards
        No.
        123. This statement does not address the accounting for employee share ownership
        plans, which are subject to AICPA Statement of Position 93-6, "Employers'
        Accounting for Employee Stock Ownership Plans." The Company expects no changes
        to its financial reporting as it is already reporting and complying with
        the
        fair value method of SFAS No. 123.
Provision
        for Taxes
Income
        taxes are provided based upon the liability method of accounting pursuant
        to
        Statement of Financial Accounting Standards No. 109, "Accounting for Income
        Taxes" (hereinafter "SFAS No. 109"). Under this approach, deferred income
        taxes
        are recorded to reflect the tax consequences in future years of differences
        between the tax basis of assets and liabilities and their financial reporting
        amounts at each year-end. A valuation allowance has been recorded against
        deferred tax assets as management does not believe the Company has met the
        "more
        likely than riot" standard imposed by SFAS No. 109 to allow recognition of
        such
        an asset. See Note 6.
Basic
        and Diluted Earnings Per Share
The
        Company has adopted Statement of Financial Accounting Standards Statement
        No.
        128, "Earnings Per Share". Basic earnings per share is computed by dividing
        net
        income (loss) by the weighted average number of common shares outstanding
        for
        the period. Diluted earnings per share is computed by dividing the net income
        (loss) by the weighted average number of basic
F-10
AURIGA
            LABORATORIES,
INC.
            AND
SUBSIDIARIES
NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
March
31,
2006
shares
        outstanding increased by the number of shares that would be outstanding assuming
        conversion of the exercisable stock options and warrants. Diluted net loss
        per
        share is the same as basic net loss per share at March 31, 2006 as inclusion
        of
        the common stock equivalents would be antidilutive. The Company has a total
        of
        5,385,400 shares at March 31, 2006 that would be issued if all options and
        warrants were exercised. The fair market value of all granted options and
        warrants is $5,836,782.
Recent
        Accounting Pronouncements
In
        March
        2006, the Financial Accounting Standards Board issued Statement of Financial
        Accounting Standards No. 156, "Accounting for Servicing of Financial Assets-an
        amendment of FASB Statement No. 140." This statement requires an entity to
        recognize a servicing asset or servicing liability each time it undertakes
        an
        obligation to service a financial asset by entering into a servicing contract
        in
        any of the following situations: a transfer of the servicer's financial assets
        that meets the requirements for sale accounting; a transfer of the servicer's
        financial assets to a qualifying special-purpose entity in a guaranteed mortgage
        securitization in which the transferor retains all of the resulting securities
        and classifies them as either available-for-sale securities or trading
        securities; or an acquisition or assumption of an obligation to service a
        financial asset that does not relate to financial assets of the servicer
        or its
        consolidated affiliates. The statement also requires all separately recognized
        servicing assets and servicing liabilities to be initially measured at fair
        value, if practicable, and permits an entity to choose either the amortization
        or fair value method for subsequent measurement of each class of servicing
        assets and liabilities. The statement further permits, at its initial adoption,
        a one-time reclassification of available for sale securities to trading
        securities by entities with recognized servicing rights, without calling
        into
        question the treatment of other available for sale securities under Statement
        115, provided that the available for sale securities are identified in some
        manner as offsetting the entity's exposure to changes in fair value of servicing
        assets or servicing liabilities that a servicer elects to subsequently measure
        at fair value and requires separate presentation of servicing assets and
        servicing liabilities subsequently measured at fair value in the statement
        of
        financial position and additional disclosures for all separately recognized
        servicing assets and servicing liabilities. This statement is effective for
        fiscal years beginning after September 15, 2006, with early adoption permitted
        as of the beginning of an entity's fiscal year. Management believes the adoption
        of this statement will have no impact on the Company's financial condition
        or
        results of operations.
In
        February 2006, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 155, "Accounting for Certain Hybrid Financial
        Instruments, an Amendment of FASB Standards No. 133 and 140" (hereinafter
        "SFAS
        No. 155"). This statement established the accounting for certain derivatives
        embedded in other instruments. It simplifies accounting for certain hybrid
        financial instruments by permitting fair value remeasurement for any hybrid
        instrument that contains an embedded derivative that otherwise would require
        bifurcation under SFAS No. 133 as well as eliminating a restriction on the
        passive derivative instruments that a qualifying special-purpose entity ("SPE")
        may hold under SFAS No. 140. This statement allows a public entity to
        irrevocably elect to initially and subsequently measure a hybrid instrument that
        would be required to be separated into a host contract and derivative in
        its
        entirety at fair value (with changes in fair value recognized in earnings)
        so
        long as that
F-11
AURIGA
            LABORATORIES,
INC.
            AND
SUBSIDIARIES
NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
March
31,
2006
instrument
        is not designated as a hedging instrument pursuant to the statement. SFAS
        No.
        140 previously prohibited a qualifying special-purpose entity from holding
        a
        derivative financial instrument that pertains to a beneficial interest other
        than another derivative financial instrument. This statement is effective
        for
        fiscal years beginning after September 15, 2006, with early adoption peimitted
        as of the begirming of an entity's fiscal year. Management believes the adoption
        of this statement will have no impact on the Company's financial condition
        or
        results of operations.
In
        May
        2005, the Financial Accounting Standards Board issued Statement of Financial
        Accounting Standards No. 154, "Accounting Changes and Error Corrections,"
        (hereinafter "SFAS No. 154") which replaces Accounting Principles Board Opinion
        No. 20, "Accounting Changes", and SFAS No. 3, "Reporting Accounting Changes
        in
        Interim Financial Statements - An Amendment of APB Opinion No. 28". SFAS
        No. 154
        provides guidance on accounting for and reporting changes in accounting
        principle and error corrections. SFAS No. 154 requires that changes in
        accounting principle be applied retrospectively to prior period financial
        statements and is effective for fiscal years beginning after December 15,
        2005.
        The Company does not expect SFAS No. 154 to have a material impact on its
        consolidated financial position, results of operations, or cash
        flows.
In
        December 2004, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 153. This statement addresses the measurement
        of exchanges of nonmonetary assets. The guidance in APB Opinion No. 29,
        "Accounting for Nonmonetary Transactions," is based on the principle that
        exchanges of nonmonetary assets should be measured based on the fair value
        of
        the assets exchanged. The guidance in that opinion, however, included certain
        exceptions to that principle. This statement amends Opinion 29 to eliminate
        the
        exception for nonmonetary exchanges of similar productive assets and replaces
        it
        with a general exception for exchanges of nonmonetary assets that do not
        have
        commercial substance. A nonmonetary exchange has commercial substance if
        the
        future cash flows of the entity are expected to change significantly as a
        result
        of the exchange. This statement is effective for financial statements for
        fiscal
        years beginning after June 15, 2005. Management believes the adoption of
        this
        statement will have no impact on the financial statements of the
        Company.
In
        December 2004, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 152, which amends FASB Statement No. 66,
        "Accounting for Sales of Real Estate," to reference the financial accounting
        and
        reporting guidance for real estate time-sharing transactions that is provided
        in
        AICPA Statement of Position (SOP) 04-2, "Accounting for Real Estate Time-Sharing
        Transactions." This statement also amends FASB Statement No. 67, "Accounting
        for
        Costs and Initial Rental Operations of Real Estate Projects," to state that
        the
        guidance for (a) incidental operations and (b) costs incurred to sell real
        estate projects does not apply to real estate time-sharing transactions.
        The
        accounting for those operations and costs is subject to the guidance in SOP
        04-2. This statement is effective for financial statements for fiscal years
        beginning after June 15, 2005. Management believes the adoption of this
        statement will have no impact on the financial statements of the
        Company.
F-12
AURIGA
            LABORATORIES,
INC.
            AND
SUBSIDIARIES
NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
March
31,
2006
In
        November 2004, the Financial Accounting Standards Board issued Statement
        of
        Financial Accounting Standards No. 151, "Inventory
Costs-
an
        amendment of ARB No. 43, Chapter 4." This statement amends the guidance in
        ARB
        No. 43, Chapter 4, "Inventory Pricing," to clarify the accounting for abnormal
        amounts of idle facility expense, freight, handling costs, and wasted material
        (spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated that ". .
        .
        under some circumstances, items such as idle facility expense, excessive
        spoilage, double freight, and rehandling costs may be so abnormal as to require
        treatment as current period charges...." This statement requires that those
        items be recognized as current-period charges regardless of whether they
        meet
        the criterion of "so abnonnal." In addition, this statement requires that
        allocation of fixed production overheads to the costs of conversion be based
        on
        the normal capacity of the production facilities. This statement is effective
        for inventory costs incurred during fiscal years beginning after June 15,
        2005.
        There has been no financial impact to its financial statements from the
        Company's adoption of this statement for its fiscal period ended March 31,
        2006.
NOTE
        3 -
PROPERTY
AND
EQUIPMENT
Property
        and equipment are stated at cost. Depreciation is provided using the
        straight-line method over the estimated useful lives of the assets ranging
        from
        3 to 5 years. The following is a summary of property, equipment and accumulated
        depreciation at March 31, 2006:
Computer
                  equipment and software
$
177,279
Furniture
                  and fixtures
79,840
Leasehold
                  improvements
63,596
320,715
Less:
                  Accumulated depreciation
(42,147
)
Add:
                  Assets under construction
32,557
Total
$
311,125
Depreciation
        expense for the period ended March 31, 2006 was $42,147. The Company evaluates
        the recoverability of property and equipment when events and circumstances
        indicate that such assets might be impaired. Maintenance and repairs are
        expensed as incurred. Replacements and betterments are capitalized. The cost
        and
        related reserves of assets sold or retired are removed from the accounts,
        and
        any resulting gain or loss is reflected in results of operations.
NOTE
        4 - GOODWILL
In
        April
        2005, the Company acquired all the stock of Tryon Labs, Inc. and Auriga
        Pharmaceuticals, LLC in an exchange for stock in the Company. No cash
        consideration was paid. For the period ended March 31, 2006, the Company
        recorded $92,316 in goodwill associated with initial Company
        reorganization.
F-13
AURIGA
            LABORATORIES,
INC.
            AND
SUBSIDIARIES
NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
March
31,
2006
NOTE
        5 - NOTES PAYABLE
Bank
        Notes Payable
In
        November 2005, the Company obtained an asset-based line of credit from Silicon
        Valley Bank ("SVB") in the amount of $1,000,000. As of March 31, 2006, the
        amount of credit extended by SVB and owed by the Company was $172,519. The
        agreement with SVB provides for advances of up to $1,000,000 against the
        Company's current invoiced trade receivables. The loan agreement was entered
        into on November 22, 2005 and runs for a period of 364 days. Advances under
        the
        loan agreement are subject to finance charges based on an interest rate of
        1.5%
        to 2.00% over prime and a collateral handling fee with a minimum monthly
        charge
        of $2,500 per month.
The
        advances are subject to repayment normally when payment is received but are
        also
        subject
to
        automatic repayment if the loan covenants are no longer maintained by the
        Company.
In
        addition, the Company has a short-term financing facility with Wells Fargo,
        which as of March 31, 2006 was $62,294. This financing arrangement was
        personally guaranteed by the Company's chairman. The interest rate is variable
        and during the fiscal year varied from 10.0% to 12.25%.
Related
        Party Loan
On
        December 15, 2005, the Company repurchased 1,500,000 shares of outstanding
        common
stock
        of
        the Company from several selling stockholders in connection with the resignation
        of one
of the
        Company directors. The adjusted aggregate purchase price for the shares was
        $2,048,055 plus imputed interested of $201,945. In conjunction with the stock
        purchase agreement, the Company entered into an unsecured subordinated
        promissory note (the "Note") with the selling shareholders. The $2,250,000
        principal is payable in annual installments with $150,000 having been paid
        on
        January 2, 2006 ("installment date"). Associated with this transaction, the
        Company recorded $201,945 in imputed loan interest "loan discount" in order
        to
        realize a 7.5% effective interest rate. This loan discount will be realized
        as
        interest expense based upon the outstanding principal. The remaining balance
        will be paid in the first, second, and third anniversaries of the installment
        date in amounts of $600,000, $750,000 and $750,000, respectively. Interest
        accrues at a rate equal to 2% per annum on the unpaid principal amount of
        the
        Note. Interest is to be paid in arrears in cash by the Company on each
        anniversary of the installment date.
F-14
AURIGA
            LABORATORIES,
INC.
            AND
SUBSIDIARIES
NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
March
31,
2006
NOTE
        6 - INCOME TAXES
The
        following is a reconciliation of income tax computed at March 31,
        2006:
Net
                  loss per books
$
(3,150,000
)
Nondeductible
                  expenses
22,000
Non-cash
                  compensation (Warrants)
2,078,000
Depreciation
                  & amortization
(14,000
)
Net
                  tax loss
(1,064,000
)
Statutory
                  federal tax rate
34.00
%
Federal
                  income tax benefit
$
362,000
Deferred
        income taxes reflect the net tax effects of temporary differences between
        the
        carrying amounts of assets and liabilities for financial reporting purposes
        and
        the amounts used for income tax purposes.
Deferred
        Taxes
Deferred
        taxes reflect the net tax effects of temporary differences between the carrying
        amounts of assets and liabilities for financial reporting purposes and the
        amounts used for income tax purposes, and operating losses and tax credit
        carryforwards.
The
        significant components of net deferred income tax assets are:
March
                  31,
2006
Statutory
Tax
                  Rate
Federal
                  net operating loss
carryforward
$
362,000
(34.00
)%
State
                  net operating loss carryforward
63,800
(6.00
)%
Deferred
                  tax liabilities - Excess tax
depreciation
                  and amortization
(4,800
)
1.00
%
Deferred
                  tax assets before valuation
421,000
(39.00
)%
Valuation
                  allowance
$
(421,000
)
39.00
%
Statement
        of Financial Accounting Standards No. 109 requires that the tax benefit of
        net
        operating losses, temporary differences and credit carryforwards be recorded
        as
        an asset to the extent that management assesses that realization is "more
        likely
        than not." Realization of the future tax benefits is dependent on the Company's
        ability to generate sufficient taxable income within the carryforward period.
        Because of the Company's history of operating losses, management has provided
        a
        valuation allowance equal to its net deferred tax assets.
At
        March
        31, 2006, the Company had net operating loss carryforwards of approximately
        $1,063,000 to reduce United States federal taxable income in future years.
        This
        carryforward will expire in the year 2026.
F-15
AURIGA
            LABORATORIES,
INC.
            AND
SUBSIDIARIES
NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
March
31,
2006
NOTE
7-
DEPOSIT
        ON STOCK SUBSCRIPTIONS
In
        March
        2006, the Company commenced a second private placement to sell up to 2,000,000
        of its common stock at $1.85 per share. At March 31, 2006, the Company had
        received subscriptions for the purchase of 317,636 shares for an aggregate
        of
        $578,627 from two investors. Since the stock had not been issued as of March
        31,
        2006, the Company has recorded this subscription as a deposit on stock
        subscriptions.
The
        Company currently anticipates that the transactions contemplated by a private
        placement memorandum ("PPM") will close by April 30, 2006, but no assurances
        can
        be provided that the transaction contemplated by the PPM will close by then
        or
        at all. See Note 15.
NOTE
        8 - CAPITAL STOCK
Common
        Stock
The
        Company is authorized to issue 50,000,000 shares of common stock, par value
        $0.001 per share. The Company is not authorized to issue preferred stock
        under
        its certificate of incorporation. As of March 31, 2006, there are 18,762,912
        shares of common stock issued, consisting of 3,750,000 shares of treasury
        stock,
        as detailed in Note 9, and 15,012,912 shares of common stock outstanding.
        Each
        share of common stock is entitled to one vote per share for the election
        of
        directors and on all other matters submitted to a vote of stockholders. There
        are no cumulative voting rights. The common stockholders have contractual
        preemptive rights to subscribe for additional shares in the event the Company
        proposes to sell and issues shares of its common stock in a transaction other
        than: (i) shares issued pursuant to any employee equity plan as determined
        by
        the Company's board of directors, (ii) any securities of the Company that
        are
        issued as a dividend on the common stock, or upon any subdivision or split-up
        of
        the outstanding shares of common stock, (iii) any securities issued in
        connection with an acquisition by the Company, or (iv) any securities issued
        in
        connection with an underwritten public offering of common stock, resulting
        in
        gross proceeds to the Company of at least five million dollars. The Company
        has
        asked the common stockholders to: (i) waive this right with respect to past
        sales and issuances and the Company's currently proposed limited offering
        pursuant to a private placement memorandum, and (ii) amend its prior agreements
        with the Company to eliminate this preemptive right. The common stock is
        not
        subject to conversion or redemption. In the event of liquidation, the holders
        of
        common stock will share equally in any balance of corporate assets available
        for
        distribution to them. Subject to the rights of holders of any other securities
        subsequently issued, holders of the common stock are entitled to receive
        dividends when and as declared by the Company's board of directors out of
        funds
        legally available. The Company has not paid any dividends since its inception
        and has no stated intention to pay any dividends in the foreseeable future.
        Any
        future dividends would be subject to the discretion of the Company's board
        of
        directors and would depend on, among other things, future earnings, the
        operating and financial condition of the Company, its capital requirements,
        and
        general business conditions.
As
        part
        of the reorganization in April 2005, the Company issued 11,146,624 shares
        of
        common stock in exchange for all of the outstanding stock of Tryon Labs,
        Inc.
        and the reorganization
F-16
AURIGA
            LABORATORIES,
INC.
            AND
SUBSIDIARIES
NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
March
31,
2006
associated
        with Auriga Pharmaceuticals, LLC. In addition, the Company issued 10,000
        shares
        of common stock to its chainnan in connection with the Company's
        formation.
In
        April
        2005, the Company issued 1,600,000 shares of common stock in exchange for
        royalty rights in and to the Company's Extendryl products then owned by the
        owner of Champion Pharmaceuticals, Inc.
In
        August
        2005, the Company completed a private placement of its common stock at an
        average price per common share of $1.00. Pursuant to this private placement,
        the
        Company issued 1,456,288 common shares and received approximately $1,231,593,
        net of offering costs of $224,695.
During
        the period ended March 31, 2006, several stock transactions took place, all
        subject to the right of repurchase. The Company issued 2,250,000 shares of
        common stock at a price of $0.01 per share associated with the employment
        of
        former officers,150,000 shares of common stock at a price of $0.01 per share
        to
        a member of the board of directors in conjunction with his director agreement,
        and 150,000 shares of common stock at a price of $0.01 per share to the
        Company's outside corporate counsel.
NOTE
        9 - TREASURY STOCK
On
        December 15, 2005, the Company repurchased 1,500,000 shares of its outstanding
        common stock from several selling stockholders in connection with the
        resignation of a member of the Company's board of directors. The adjusted
        aggregate purchase price for the shares was $2,048,055. In March 2006, the
        Company exercised its right to repurchase 2,250,000 shares of outstanding
        common
        stock of the Company for $22,500 from certain former officers in connection
        with
        the teens and provision of those parties' stock purchase
        agreements.
NOTE
        10 - STOCK OPTIONS
2005
        Stock Plan
In
        June
        2005, the Company's board of directors approved the 2005 Stock Option Plan
        ("2005 Stock Plan") in which 5,000,000 shares of common stock are available
        to
        be issued under the plan. The 2005 Stock Plan is intended to permit the grant
        of
        common stock options to certain company employees, service providers, and
        non-employee members of the board of directors. As of March 31, 2006, the
        Company had 2,224,000 options available for grant under the 2005 Stock Plan
        and
        2,776,000 options granted but not yet vested.
All
        options granted under the 2005 Stock Plan will qualify as incentive stock
        options if the 2005 Stock Plan is approved by stockholders by June, 2006.
        In the
        event that the Company's stockholders do not approve the plan, all options
        that
        may have been granted and that were intended to qualify as incentive stock
        options automatically convert into non-statutory stock options.
F-17
AURIGA
            LABORATORIES,
INC.
            AND
SUBSIDIARIES
NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
March
31,
2006
All
        awards granted under the 2005 Stock Plan are governed by separate written
        agreements between the Company and the participants and regulated by the
        laws of
        the State of Delaware.
During
        the period ended March 31, 2006, the Company granted stock options to purchase
        a
        total of 2,776,000 shares of common stock to its participants. The options
        are
        exercisable at prices
ranging
        from $0.85 to $1.85 per share but are subject to a repurchase right of the
        Company in the
event
        the grantee fails to meet certain vesting requirements The options vest 12/48ths
        after one year of continuous service and 1/48
th
for each
        month thereafter until fully vested. The average fair value of the options
        of
        $1.12 each was estimated using the Black Scholes Option model. The following
        assumptions were made to value the stock options: risk free interest rate
        of 4%;
        expected life of 10 years; and expected volatility of 39% with no dividends
        expected to be paid.
The
        following is a summary of the Company's equity compensation plans:
Weighted-
average
                  exercise
Number
                  of securities
Number
                  of securities to
price
                  of
remaining
                  available for
be
                  issued upon exercise
outstanding
future
                  issuance under
Plan
of
                  outstanding options
options
equity
                  compensation plans
2005
                  Stock Plan
2,776,000
$
1.20
2,224,000
Total
2
                  776,000
2,224,000
Following
        is a summary of the status of the options outstanding during the period ended
        March
31,
        2006:
Weighted
Number
                  of Shares
Average
                  Exercise
Under
                  Options
Price
Granted
2,776,000
$
1.20
Exercised
Forfeited
Options
                  outstanding at March 31, 2006
2,776,000
$
1.20
Weighted
                  average fair value of options granted at
March
                  31, 2006
$
1.12
Total
                  compensation costs related to non-
vested
                  stock options as of March 31, 2006
$
3,117,221
Weighted
                  average period of non-vested stock
options
                  as of March 31, 2006
3.75
F-18
AURIGA
            LABORATORIES,
INC.
            AND
SUBSIDIARIES
NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
March
31,
2006
Summarized
        information about stock options outstanding at March 31, 2006 is as
        follows:
Outstanding
                  Options
Exercise
                  Price
Number
                  of
Shares
Under
Options
Weighted
                  Average
Remaining
                  Life
Weighted
                  Average
Exercise
                  Price
$0.85
485,000
9.27
$
0.85
$1.00
1,536,000
9.92
1.00
$1.85
755,000
10.00
1.85
2,776,000
$
1.20
NOTE
11-
COMMON
        STOCK WARRANTS
During
        the period ended March 31, 2006, the Company issued a total of 109,400 warrants
        to consultants for services and $92,116 was recognized as non-cash professional
        fees. These warrants are exercisable from $0.85-$2.50 per share and expire
        from
        June 2015 - February 2016.
Also
        during the period ended March 31, 2006, the Company issued a warrant enabling
        the holder to purchase 2,000,000 shares of common stock at $0.01 to its chairman
        in exchange for his agreement to personally guarantee up to $5,000,000 of
        debt.
        This warrant was exercised during the period ended March 31, 2006 and $1,986,592
        was recognized as a non-cash financing expense. Additionally, the Company
        issued
        2,500,000 warrants to its chairman enabling the purchase of common stock
        at an
        exercise price of $1.85 in connection with his employment agreement as chief
        executive officer. This warrant expires March 2016 and vests 12/48ths after
        one
        year of service, then 1/48
`x'
for each
        month thereafter. The warrant becomes fully vested and exercisable upon the
        Company consurmnating a public offering of its equity securities or a merger
        or
        other reorganization with a corporation, or such corporation's subsidiary,
        that
        is subject to the periodic reporting requirements of Section 13 of the Exchange
        Act or Section 15(d) of the Securities Act. This warrant remains outstanding
        at
        March 31, 2006 and has an average fair value of $1.05 for each share purchasable
        as calculated using the Black Scholes Option model.
The
        charge for common stock warrants for the current period using the Black Scholes
        Option model was $2,078,708. The following assumptions were made to value
        the
        warrants: risk free interest rate of 4%, expected lives of 10 years; and
        expected volatility of 39% with no payment of dividends.
There
        are
        2,609,400 warrants outstanding at March 31, 2006, of which none have
        vested.
F-19
AURIGA
              LABORATORIES,
INC.
              AND
SUBSIDIARIES
NOTES
              TO
              CONSOLIDATED FINANCIAL STATEMENTS
March
31,
2006
NOTE
        12 - RELATED PARTY TRANSACTIONS
The
        licensing agreement with Fleming and Company Pharmaceuticals ("Fleming")
        for the
        Extendryl line of products is between Cornerstone BioPharma, Ltd.
        ("Cornerstone") and the Company and is referred to as the Fleming license
        agreement. Additionally, the sublicensing agreement with Cornerstone for
        the
        Extendryl line of products is between Cornerstone and the Company and is
        referred to as the Cornerstone sublicense agreement. See Note 14 for further
        information. During the period ended March 31, 2006, Messrs. Craig Collard
        and
        Philip Pesin, the Company's chairman, sat on the board of directors of both
        Cornerstone and the Company. Although Mr. Pesin resigned from the Cornerstone's
        board in January 2006, he remains a significant stockholder of
        Cornerstone.
As
        a
        result of the Tryon transaction in April 2005, the Company acquired a $100,000
        note and $7,873 accrued interest payable to Cornerstone. The note, which
        accrued
        interest at 10% per annum, was paid in full during the period ended March
        31,
        2006.
In
        July
        2005, the Company entered into an agreement for advisory services with The
        Sorrento Financial Group, LLC ("SFG,LLC"), an entity owned by the Company's
        chairman. Under an amended and restated agreement, the Company is obligated
        to
        pay $250,000 to SFG,LLC upon the successful completion of the second round
        of
        private placement funding. The amended and restated advisory agreement
        terminates on April 30, 2006. During the period ended March 31, 2006, the
        Company paid $382,583 to SFG, LLC.
On
        October 1, 2006, the Company issued a warrant to purchase 2,000,000 shares
        of
        common stock at $0.01 to the Company's chairman in exchange for his agreement
        to
        personally guarantee up to $5,000,000 of the Company's debt. The warrant
        was
        exercised on March 13, 2006.
During
        fiscal 2005, the company utilized the legal services of Sorrento Law Group,
        P.C., an entity owned by the Company's chairman and paid $294,324 to this
        entity.
On
        November 20, 2005, the Company sold and issued 150,000 shares of common stock
        at
        a purchase price of $0.01 per share subject to a right of repurchase to a
        member
        of the board of directors in conjunction with his director
        agreement.
On
        November 20, 2005, the Company sold and issued 150,000 shares of common stock
        at
        a purchase price of $0.01 per share to the Company's outside corporate
        counsel.
On
        December 15, 2005, the Company repurchased 1,500,000 shares of the outstanding
        common stock of the Company from several selling stockholders. This transaction
        is more fully described in Note 5.
On
        March
        29, 2006, the Company entered into an employment agreement with its chief
        executive officer, which provided in part a warrant to purchase 2,500,000
        shares
        of common stock at a price of $1.85 per share in addition to a bonus of $250,000
        upon the Company becoming publicly traded.
F-20
AURIGA
            LABORATORIES,
INC.
            AND
SUBSIDIARIES
NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
March
31,
2006
During
        the period ended March 31, 2006, the Company received royalty income associated
        with the Extendryl licensing agreement of $21,619 from Cornerstone. This
        Extendryl licensing agreement was revised effective August 1, 2005 whereby
        the
        Company pays a royalty to Cornerstone for its sales of Extendryl. The royalty
        expense to Cornerstone for the period ended March 31, 2006 amounted to
        approximately $764,000.
NOTE
        13 - CONCENTRATIONS
Credit
        Risk for Cash Held at Banks
The
        Company maintains its cash accounts at various financial institutions. These
        funds are insured to a maximum of $100,000. At March 31, 2006, none of the
        funds
        in these accounts were uninsured.
Major
        Customer
During
        the period ended March 31, 2006, there were two major customers with sales
        in
        excess of 90% of gross sales: one accounted for approximately 46% and the
        other
        accounted for approximately 44% of the Company's gross sales.
NOTE
        14 - COMMITMENTS AND CONTINGENCIES
Fleming
        License Agreement for Extendryl
In
        May
        2005, Tryon, Cornerstone and Auriga amended the terms of the Fleming Extendryl
        License Agreement as a result of the Company's reorganization in April
        2005.
Effective
        October 1, 2005, the Company will pay royalties to Fleming on net sales as
        follows:
Legacy
                Product Lines:
Calendar
                  year 2005
20
%
Calendar
                  year 2006
15
%
Calendar
                  year 2007 and thereafter
10
%
Line
                  Extensions:
5
%
Cornerstone
        Sublicense Agreement for Extendryl
In
        conjunction with the reorganization in April 2005, Auriga, Tryon and Cornerstone
        entered into revised terms for the licensing and development of the Extendryl
        line of products with an effective date of August 1, 2005. Beginning August
        1,
        2005, the Company will pay Cornerstone a royalty based upon a calendar year
        legacy net sales in accordance with the following schedule: 30% of legacy
        net
        sales up to $4,000,000; 8% of legacy net sales thereafter and 0% royalty
        on net
        sales in line extensions. The annual maximum royalty is capped at
        $1,700,000.
Integrated
        Commercialization Solutions,
Inc.
("ICS")
        Commercial Outsourcing Services
Agreement
        ("ICS Agreement")
Effective
        June 2005, the Company entered into a three-year commercial outsourcing services
        agreement with ICS to receive exclusive commercialization services relating
        to
        the Company's
F-21
AURIGA
            LABORATORIES,
INC.
            AND
SUBSIDIARIES
NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
March
31,
2006
pharmaceutical
        products. The Company is committed to pay ICS a minimum of $93,000 in year
        one
        and $177,000 per year in years two and three of the related
        contract.
IMS
        Health Incorporated ("IMS') Information Services Agreement
Effective
        October 2005, the Company entered into an information services agreement
        to
        receive data, software, documentation, and services until September 2008.
        Minimum fee commitments are $191,200 in year one, $349,000 in year two, and
        $350,000 in year three of the related contract.
Operating
        Leases
The
        Company leases office space for facilities and equipment under operating
        agreements
expiring
        from October 2007 through August 2010. Minimum lease payments for fixture
        years
        are
as
        follows:
Fiscal
                2006
$
231,000
Fiscal
                2007
208,000
Fiscal
                2008
135,000
Fiscal
                2009
73,000
Fiscal
                2010
2,000
Total
$
649,000
Total
        rental expense, including common area charges, for the period ending March
        31,
        2006 was approximately $94,000.
Litigation
From
        time
        to time the Company is involved in legal actions arising in the nounal course
        of
        its business. The Company is not presently subject to any material litigation
        nor, to management's knowledge, is any litigation threatened against the
        Company
        that collectively is expected to have a material adverse effect on the Company's
        cash flows, financial condition or results of operations.
NOTE
        15 -
SUBSEQUENT
        EVENTS
The
        Company is currently in the process of raising capital through the sale and
        issuance of common stock to accredited investors pursuant to a private placement
        memorandum ("PPM"). The PPM provides the sale and issuance of up to 2,000,000
        shares of common at a price of $1.85 per share. The PPM also provides for
        the
        issuance of up to an additional 2,000,000 shares of common stock at a price
        of
        $1.85 per share pursuant to an over-allotment option. In exchange for assistance
        in connection with the PPM, the Company has agreed to issue warrants to an
        individual equal to 12% of the number of shares sold and issued pursuant
        to the
        PPM. Subsequent to March 31, 2006 the Company issued 1,478,078 shares of
        common
        stock for $2,734,844 in cash.
On
        April
        10, 2006, the Company signed a development agreement with Balchem Encapsulates
        to develop an orally dissolving tablet combination of acetaminophen and
        hydrocodone (the "Balchem Agreement"). Under the Balchem Agreement, the Company
        retains Balchem to scale
F-22
AURIGA
            LABORATORIES,
INC.
            AND
SUBSIDIARIES
NOTES
            TO
            CONSOLIDATED FINANCIAL STATEMENTS
March
31,
2006
up
        and
        validate the Balchem taste masking technology for use with Company products.
        No
        new development is anticipated, and Balchem will continue to own all
        intellectual property in its technology. If any new development becomes
        necessary, a separate development agreement that takes into account ownership
        and/or use rights of the new development will be negotiated between the
        parties.
The
        Balchem Agreement remains in force until December 31, 2007, and may be renewed
        by mutual agreement of the parties. Either party may terminate the Balchem
        Agreement if the other party commits an uncured material breach or becomes
        bankrupt. The maximum compensation to be paid to Balchem under the Balchem
        Agreement is $165,000, $140,000 of which is dependent on Balchem meeting
        certain
        milestones and requirements. The Balchem Agreement contains industry standard
        terms and conditions with respect to warranty, indemnity, limitation of
        liability and miscellaneous provisions. A separate license and supply agreement
        will be negotiated by the parties to allow the Company to use the Balchem
        technology with its products.
On
        April
        13, 2006, the Company signed an engagement agreement with Trilogy Capital
        Partners, Inc. ("Trilogy"). Under the engagement agreement, Trilogy will
        provide
        services to the Company, including merchant banking, strategic planning,
        financial marketing, and communications. Pursuant to the engagement agreement,
        the Company issued warrants for 1,250,000 shares of the Company's common
        stock
        to Trilogy and will pay Trilogy $175,000 over the one-year life of the
        engagement agreement and provide an expense allowance of up to
        $250,000.
F-23