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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>SECURITIES
      AND EXCHANGE COMMISSION </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>WASHINGTON,
      D.C. 20549 </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;

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    <div style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>FORM
      8-K </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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CURRENT
      REPORT </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>Pursuant
      to Section&#160;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="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">Date
      of
      report (Date of earliest event reported):</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>
      August 16, 2006 </strong></font></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="center" noshade size="2" width="15%">
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 20pt; FONT-FAMILY: Times New Roman, serif"><strong>CYBER
      MERCHANTS EXCHANGE, 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"><strong>(Exact
      name of registrant as specified in Charter) </strong></font></div>
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            </td>
            <td valign="top" width="28%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; 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>001-15643</strong></font></div>
            </td>
            <td valign="top" width="28%">
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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>(State
                or other jurisdiction 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>incorporation
                or organization)</strong></font></div>
            </td>
            <td valign="top" width="28%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; 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>(Commission
                File No.)</strong></font></div>
            </td>
            <td valign="top" width="28%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; 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>(IRS
                Employee Identification
                No.)</strong></font></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="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>5th
      Floor, QPL Industrial Building, 126-140 Texaco Road, </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>Tsuen
      Wan, Hong Kong</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>(Address
      of Principal Executive Offices) </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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(852)
      </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2944-9905</strong></font></div>
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      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions (see General Instruction A.2. below): </font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">&#168;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27.05pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
      </font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">&#168;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27.05pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
      </font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">&#168;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27.05pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
      240.14d-2(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: 27pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">&#168;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27.05pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
      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="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Forward
      Looking Statements </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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
      Form
      8-K and other reports filed by Registrant from time to time with the Securities
      and Exchange Commission (collectively the &#8220;Filings&#8221;) contain or may contain
      forward looking statements and information that are based upon beliefs of,
      and
      information currently available to, Registrant&#8217;s management as well as estimates
      and assumptions made by Registrant&#8217;s management. When used in the filings the
      words &#8220;anticipate&#8221;, &#8220;believe&#8221;, &#8220;estimate&#8221;, &#8220;expect&#8221;, &#8220;future&#8221;, &#8220;intend&#8221;, &#8220;plan&#8221;
or the negative of these terms and similar expressions as they relate to
      Registrant or Registrant&#8217;s management identify forward looking statements. Such
      statements reflect the current view of Registrant with respect to future events
      and are subject to risks, uncertainties, assumptions and other factors
      (including the risks contained in the section of this report entitled &#8220;Risk
      Factors&#8221;) relating to Registrant&#8217;s industry, Registrant&#8217;s operations and results
      of operations and any businesses that may be acquired by Registrant. Should
      one
      or more of these risks or uncertainties materialize, or should the underlying
      assumptions prove incorrect, actual results may differ significantly from those
      anticipated, believed, estimated, expected, intended or planned. </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">Although
      Registrant believes that the expectations reflected in the forward looking
      statements are reasonable, Registrant cannot guarantee future results, levels
      of
      activity, performance or achievements. Except as required by applicable law,
      including the securities laws of the United States, Registrant does not intend
      to update any of the forward-looking statements to conform these statements
      to
      actual results. The following discussion should be read in conjunction with
      Registrant&#8217;s pro forma financial statements and the related notes that will be
      filed herein. </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">In
      this
      Form 8-K, references to &#8220;we,&#8221; &#8220;our,&#8221; &#8220;us,&#8221; &#8220;our company,&#8221; &#8220;Cyber&#8221; or the
&#8220;Registrant&#8221; refer to Cyber Merchants Exchange, Inc., a California corporation.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><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>PREFACE</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
        Company is filing this Current Report on Form 8-K (&#8220;Form 8-K&#8221;) concurrently with
        a second separate Form 8-K on this same date. However, both Form 8-K&#8217;s are being
        filed in connection with the Closing of the Exchange and Financing transactions
        described in Items 1.01 and 2.01 below. These two Form 8-K&#8217;s are filed
        separately because the number of &#8220;Items&#8221; the Company must file in connection
        with the Closing of the Exchange and Financing transactions exceeds the nine
        (9)
&#8220;Item&#8221; limitation on the number of Items that can be included in one 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>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -63pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item&#160;1.01</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Entry
      Into A Material Definitive Agreement</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
      more
      fully described in Item&#160;2.01 below, on July&#160;7, 2006, Cyber Merchants
      Exchange, Inc., a California corporation (the &#8220;Registrant&#8221; or &#8220;Cyber&#8221;) acquired
      a Hong-Kong based recordable digital versatile disk manufacturing company by
      executing an Exchange Agreement (&#8220;Exchange Agreement&#8221;) with KI Equity Partners
      II, LLC, a Delaware limited liability company (&#8220;KI Equity&#8221;), Prime Fortune
      Enterprises Limited, an international business company incorporated in the
      British Virgin Islands ("Prime"), the equity owners of Prime, which consist
      of
      Prime Corporate Developments Limited (&#8220;Prime Corporate&#8221;), Kwok Chung and Lui Sau
      Wan (collectively, the &#8220;Prime Shareholders&#8221;) and Hamptons Investment Group Ltd.
      (&#8220;HIG&#8221;). Under the terms of the Exchange Agreement, immediately prior to the
      Closing, HIG is to receive 58.82352 shares of Prime capital stock (the &#8220;HIG
      Shares&#8221;) as payment for its services as a finder in connection with the exchange
      transaction. Pursuant to the Exchange Agreement, Cyber was to acquire all of
      the
      outstanding capital stock and ownership interests of Prime (the &#8220;Prime Shares&#8221;)
      from the Prime Shareholders and HIG in exchange for Cyber issuing 1,000,000
      shares of Series A Convertible Preferred Stock, no par value per share, of
      Cyber
      ("Series A Preferred Shares") to the Prime Shareholders and HIG (the
&#8220;Exchange&#8221;). On the execution date of the Exchange Agreement, Prime owned all of
      the equity interest in Infosmart Group Limited, an international business
      company incorporated in the British Virgin Islands (&#8220;Infosmart&#8221;), which
      consisted of one (1) ordinary share of Infosmart stock. Infosmart beneficially
      owns 100% of the issued and outstanding capital stock of both: (i) Info Smart
      Technology Limited, a company incorporated under the laws of Hong Kong (&#8220;IS
      Technology&#8221;); and (ii) Info Smart International Enterprises Limited, a company
      incorporated under the laws of Hong Kong (&#8220;IS International&#8221;). IS Technology
      owns all of the issued and outstanding capital stock of Infoscience Media
      Limited, a company incorporated under the laws of Hong Kong (&#8220;IS Media&#8221;). IS
      Media owns 99.42% of the issued and outstanding capital stock of Discobras
      Industria E Comercio de Electro Eletronica Limiteda, a company incorporated
      under the laws of Brazil (&#8220;Discobras&#8221;). </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">However,
      as more fully described in Item 2.01 below, in August 2006 and prior to the
      Closing of the Exchange, the board of directors of Prime and Infosmart and
      their
      respective shareholders decided to re-structure certain shareholdings in
      Infosmart, so that after the re-structuring, Prime would no longer own 100%
      of
      Infosmart&#8217;s issued capital shares and so that the Prime Shareholders would
      replace Prime as the direct owners of 100% of the issued capital shares and
      equity ownership of Infosmart (the &#8220;Re-structuring&#8221;). As described more fully in
      Item 2.01, as a result of the Re-structuring, the Prime Shareholders became
      the
      direct equity owners of 100% of Infosmart&#8217;s issued capital shares.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">After
      the
      Re-structuring, on <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">August
      14, 2006, </font></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cyber
      entered into a First Amendment to the Exchange Agreement (the &#8220;Amendment&#8221;) with
      KI Equity, Prime, the Prime Shareholders, HIG, Infosmart, and each of the equity
      owners of Infosmart. Under the terms of the Amendment, the Exchange Agreement
      was amended so that the term &#8220;Company&#8221;, which is currently defined in the
      Exchange Agreement as &#8220;Prime Fortune Enterprises Limited, an international
      business company incorporated in the British Virgin Islands&#8221; shall instead be
      defined as &#8220;Infosmart Group Limited, an international business company
      incorporated in the British Virgin Islands&#8221; so that all of the obligations,
      representations, warranties, liabilities and responsibilities of Prime under
      the
      Exchange Agreement shall now be the obligations, representations, warranties,
      liabilities and responsibilities of Infosmart. The parties further agreed and
      acknowledged that the Infosmart Shareholders (defined below) shall replace
      the
      Prime Shareholders as the exchanging party to the Exchange Agreement that will
      transfer and contribute all of their Infosmart Shares to Cyber in exchange
      for
      Cyber&#8217;s issuance to the Infosmart Shareholders of 1,000,000 shares of Cyber&#8217;s
      Series A Preferred Stock, and that all of the obligations, representations,
      warranties, liabilities and responsibilities of the Prime Shareholders under
      the
      Exchange Agreement shall become the obligations, representations, warranties,
      liabilities and responsibilities of the Infosmart Shareholders.</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 style="WIDTH: 100%; TEXT-ALIGN: center">
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      <div>&#160;</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
      a
      result of the Amendment: (1) Prime&#8217;s obligation under the Exchange Agreement to
      issue capital shares to HIG immediately prior to the Closing was transferred
      to
      Infosmart, and thus Infosmart will issue 58.82352 Infosmart shares to HIG as
      payment for HIG&#8217;s services; (2) the shares of capital stock to be exchanged with
      Cyber&#8217;s Series A Preferred Stock pursuant to the Exchange Agreement will consist
      of 100% of Infosmart issued capital shares (the &#8220;Infosmart Shares&#8221;), (2) the
      holders of 100% of Infosmart&#8217;s issued capital shares, which immediately prior to
      the Closing shall be Prime Corporate, Kwok Chung, Lui Sau Wan and HIG
      (hereinafter, collectively the &#8220;Infosmart Shareholders&#8221;) will be the
      transferring the Infosmart Shares to Cyber in exchange for Cyber&#8217;s issuance of
      Cyber&#8217;s Series A Preferred Stock to the Infosmart Shareholders, and (3) that
      Infosmart and the Infosmart Shareholders will be replacing Prime and the Prime
      Shareholders as a parties to the Exchange Agreement and will be assuming all
      of
      Prime&#8217;s and the Prime Shareholders&#8217; obligations, representations, warranties,
      liabilities and responsibilities under the Exchange Agreement.</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
      connection with the execution of the First Amendment to the Exchange Agreement,
      Cyber, IS Technology, IS International and IS Media entered into an Amended
      and
      Restated Guarantee and Assumption Agreement (&#8220;Amended Guarantee Agreement&#8221;) on
      August 14, 2006, under which IS Technology, IS International and IS Media have
      agreed to be jointly and severally liable with Infosmart and the Infosmart
      Shareholders for each and every obligation and liability of Infosmart and the
      Infosmart Shareholders under the Exchange Agreement as if it were a party to
      the
      Exchange Agreement. A copy of the Amended Guarantee Agreement is included as
      Exhibit 2.6 to this Current Report and is hereby incorporated by this
      reference.</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">Thus,
      at
      the Closing, Cyber will acquire all of the Infosmart Shares from the Infosmart
      Shareholders, and the Infosmart Shareholders will transfer and contribute all
      of
      their Infosmart Shares to Cyber. In exchange, Cyber will issue to the Infosmart
      Shareholders 1,000,000 shares of Series A Preferred Shares, which shall be
      convertible into 116,721,360 shares of Cyber&#8217;s common stock (&#8220;Conversion
      Shares&#8221;). A copy of the Amendment is included as Exhibit 2.5 to this Current
      Report and is hereby incorporated by this reference. All references to the
      Exchange Agreement, the Amendment and other exhibits to this Current Report
      are
      qualified, in their entirety, by the text of such exhibits. </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">Reference
      is also made to the description of the financial advisory agreement under Item
      2.01 of this report, which description is incorporated by reference into this
      Item 1.01.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -63pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      1.02 </strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Termination
      Of A Material Definitive Agreement.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Reference
      is made to the description of the termination of the management services
      agreement with Vero Management, LLC under Item 2.01 of this report, which
      description is incorporated by reference into this Item 1.02. </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: 63pt; TEXT-INDENT: -63pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item&#160;2.01</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27.05pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>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="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CLOSING
      OF EXCHANGE AGREEMENT</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
      described in Item 1.01 above, on July&#160;7, 2006, Cyber acquired a Hong-Kong
      based recordable digital versatile disk manufacturing company by executing
      an
      Exchange Agreement with KI Equity, Prime, the equity owners of Prime, the Prime
      Shareholders and HIG. Under the terms of the Exchange Agreement, immediately
      prior to the Closing, HIG was to receive 58.82352 Prime capital shares as
      payment for its services as a finder in connection with the exchange
      transaction. Pursuant to the Exchange Agreement, Cyber was to acquire all of
      the
      outstanding capital stock and ownership interests of Prime (the &#8220;Prime Shares&#8221;)
      from the Prime Shareholders and HIG in exchange for Cyber issuing 1,000,000
      shares of Series A Convertible Preferred Stock, no par value per share, of
      Cyber
      ("Series A Preferred Shares") to the Prime Shareholders and HIG (the
&#8220;Exchange&#8221;).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">However,
      prior to the Closing, the board of directors of both Prime and Infosmart decided
      to re-structure certain shareholdings in Infosmart, so that after the
      re-structuring, Prime would no longer own 100% of Infosmart&#8217;s issued capital
      shares and so that Prime Corporate, Kwok Chung and Lui Sau Wan would replace
      Prime as the direct owners of 100% of the issued capital shares and equity
      ownership of Infosmart (the &#8220;Re-structuring&#8221;). </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div 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: 10pt; FONT-FAMILY: ">3</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
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      </div>
      <div>&#160;</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">Prior
      to
      the Re-structuring, Prime owned 100% of the issued capital shares of Infosmart,
      which consisted on one (1) issued capital share, and Prime&#8217;s issued capital
      shares were owned as follows: 713 shares held by Prime Corporate, 212 shares
      held by Kwok Chung, and 75 shares held by Lui Sau Wan. On August 11, 2006,
      and
      in connection with the Re-structuring, Prime&#8217;s board of directors approved
      resolutions for Prime to transfer the one (1) issued capital share of Infosmart
      owned by Prime to Prime shareholder Kwok Chung in exchange for a cash payment
      of
      $1.00 (the &#8220;Prime Transfer&#8221;), and that pursuant to such resolutions, Prime
      transferred the one Infosmart share to Kwok Chung on August 11, 2006 in exchange
      for the $1.00 cash payment.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Further,
      on August 11, 2006 and concurrent with the Prime Transfer, the Company&#8217;s Board
      approved resolutions for the issuance of 999 new shares in Infosmart to Prime
      Corporate, Kwok Chung and Lui Sau Wan, as follows: 713 shares to Prime
      Corporate, 211 shares to Kwok Chung, and 75 shares to Lui Sau Wan, in exchange
      for a cash payment by Prime Corporate, Kwok Chung and Lui Sau Wan of $1.00
      per
      Infosmart share that each receives (the &#8220;Infosmart Share Issuance&#8221;) or an
      aggregate total payment of $999 for such shares, and that on August 11, 2006,
      the Company issued the 999 Infosmart shares, in amounts as described above,
      to
      Prime Corporate, Kwok Chung and Lui Sau Wan and, in exchange, received the
      $999
      cash payment, pursuant to such resolutions.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">s
      a
      result of and immediately after the Prime Transfer and the Infosmart Share
      Issuance, Prime Corporate, Kwok Chung and Lui Sau Wan became the owners of
      100%
      of the issued capital shares of Infosmart, with each of them owning the same
      number of Infosmart shares as the number of Prime shares that each currently
      owns.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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
      discussed in Item 1.01 above, after the Re-structuring, on August 14, 2006,
      Cyber entered into a First Amendment to the Exchange Agreement (the &#8220;Amendment&#8221;)
      with KI Equity, Prime, the Prime Shareholders, HIG, Infosmart, and each of
      the
      equity owners of Infosmart.</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
      a
      result of the Amendment: (1) Prime&#8217;s obligation under the Exchange Agreement to
      issue capital shares to HIG immediately prior to the Closing was transferred
      to
      Infosmart, and thus Infosmart will issue 58.82352 Infosmart shares to HIG as
      payment for HIG&#8217;s services; (2) the shares of capital stock to be exchanged with
      the Series A Preferred Shares pursuant to the Exchange Agreement will consist
      of
      100% of Infosmart issued capital shares (the &#8220;Infosmart Shares&#8221;), (3) the
      holders of 100% of Infosmart&#8217;s issued capital shares, which immediately prior to
      the Closing shall be Prime Corporate, Kwok Chung, Lui Sau Wan and HIG
      (hereinafter, collectively the &#8220;Infosmart Shareholders&#8221;) will be the
      transferring the Infosmart Shares to Cyber in exchange for Cyber&#8217;s issuance of
      Cyber&#8217;s Series A Preferred Shares to the Infosmart Shareholders, and (4) that
      Infosmart and the Infosmart Shareholders will be replacing Prime and the Prime
      Shareholders as a parties to the Exchange Agreement and will be assuming all
      of
      Prime&#8217;s and the Prime Shareholders&#8217; obligations, representations, warranties,
      liabilities and responsibilities under the Exchange Agreement.</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">Thus,
      at
      the Closing, Cyber will acquire all of the Infosmart Shares from the Infosmart
      Shareholders, and the Infosmart Shareholders will transfer and contribute all
      of
      their Infosmart Shares to Cyber. In exchange, Cyber will issue to the Infosmart
      Shareholders 1,000,000 shares of Cyber&#8217;s Series A Preferred Stock, which shall
      be convertible into 116,721,360 shares of Cyber&#8217;s common stock. All references
      to the Exchange Agreement, the Amendment and other exhibits to this Current
      Report are qualified, in their entirety, by the text of such exhibits.
</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">Infosmart
      beneficially owns 100% of the issued and outstanding capital stock of both:
      (i)
      Info Smart Technology Limited, a company incorporated under the laws of Hong
      Kong (&#8220;IS Technology&#8221;); and (ii) Info Smart International Enterprises Limited, a
      company incorporated under the laws of Hong Kong (&#8220;IS International&#8221;). IS
      Technology owns all of the issued and outstanding capital stock of Infoscience
      Media Limited, a company incorporated under the laws of Hong Kong (&#8220;IS Media&#8221;).
      IS Media owns 99.42% of the issued and outstanding capital stock of Discobras
      Industria E Comercio de Electro Eletronica Limiteda, a company incorporated
      under the laws of Brazil (&#8220;Discobras&#8221;). Infosmart, IS International, IS
      Technology, IS Media and Discobras shall be referred to herein collectively
      as
      "Infosmart Group" or our &#8220;predecessor.&#8221; Infosmart Group is engaged in the
      business of development, manufacturing, marketing and sales of recordable
      digital versatile disks (&#8220;DVDR&#8221;) media. </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
      consummation of the Exchange was contingent on a minimum of $7,000,000 (or
      such
      lesser amount as mutually agreed to by Prime and the placement agent) being
      subscribed for, and funded into escrow, by certain accredited and institutional
      investors (&#8220;Investors&#8221;) for the purchase of shares of Series B Convertible
      Preferred Stock (&#8220;Series B Preferred Shares&#8221;) of Cyber promptly after the
      closing of the Exchange under terms and conditions approved by Cyber&#8217;s board of
      directors immediately following the Exchange (the &#8220;Financing&#8221;). The closing of
      the Financing was contingent on the closing of the Exchange, and the Exchange
      was contingent on the closing of the Financing. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
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        </div>
      </div>
      <div>&#160;</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">The
      closing of the transactions contemplated by the Exchange Agreement and the
      First
      Amendment to the Exchange Agreement and in the Financing occurred on August
      16,
      2006 (the &#8220;Closing Date&#8221;). Following the Closing Date, Infosmart became a wholly
      owned subsidiary of Cyber.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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>FINANCING</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">Immediately
      following the Closing, we received gross proceeds of approximately $7.65 million
      in connection with the Financing from the Investors. Pursuant to Subscription
      Agreements entered into with these Investors, we sold 1,092,857.143 shares
      of
      our Series B Preferred Stock at a price per share of $7.00. Each share of Series
      B Preferred Stock will be convertible into shares of our common stock. The
      Company is required to register the common stock underlying the Series B
      Preferred Stock issued in the Financing with the Securities and Exchange
      Commission for resale by the Investors. After commissions and expenses, we
      received net proceeds of approximately $6.89</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      million
      in the Financing.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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
      connection with the issuance of the Series B Preferred Stock to the Investors,
      the Company issued warrants to the Investors to purchase an aggregate of
      29,310,345 shares of common stock, on as-converted basis, of the Company. The
      warrants have an exercise price of $0.326 per share, subject to
      adjustments.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div 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">Keating
      Securities, LLC and Axiom Capital Management, Inc. (&#8220;Placement Agents&#8221;) acted as
      placement agent in connection with the Financing. For their services, the
      Placement Agents received a commission equal to 8% of the gross proceeds or
      approximately $587,000</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      from the
      offering and a non-accountable expense allowance equal to 2% of the gross
      proceeds or approximately $153,000</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      In
      addition, the Placement Agents received, for nominal consideration, five-year
      warrants to purchase 10% of the number of shares of common stock into which
      the
      Series B Preferred Stock issued in the Financing may be converted number of
      shares of common stock into which the Series B Preferred Stock in the offering
      (&#8220;Placement Agent Warrants&#8221;). &#160;The Placement Agent Warrants will be
      exercisable at any time at a price equal 125% of the conversion price, on a
      net-issuance or cashless basis. The Placement Agent Warrants will have
      registration rights similar to the registration rights afforded to the holders
      of Series B Preferred Stock and Warrants. Cyber also paid for the out-of-pocket
      expenses incurred by the Placement Agent and all purchasers in the amount of
      $25,000. In addition, Cyber issued to the Placement Agent, warrants to purchase
      an aggregate of 2,931,035 shares of our common stock on an as-converted basis
      at
      an exercise price of $0.326 per share. The warrants are fully vested and have
      a
      term of five years.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Copies
      of
      the form of Placement Agent Agreement, Subscription Agreement, Registration
      Rights Agreement, and Form of Common Stock Purchase Warrant are attached to
      this
      report as Exhibits 10.14, 10.15, 10.16, and 10.17 respectively, and are
      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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Upon
      completion of the Exchange, and after giving effect to the Financing, the
      Infosmart Shareholders owned 1,000,000 shares of Cyber&#8217;s Series A Preferred
      Stock and the Investors in the aggregate received 1,092,857.143 shares of our
      Series B Preferred Stock. The Infosmart Shareholders and the Investors will
      own,
      in the aggregate, 91.84% of our issued and outstanding shares of common stock
      after giving effect to the conversion of the Series A and Series B Preferred
      Stock into common stock. Cyber&#8217;s stockholders immediately prior to the Exchange
      will own 8.16% of the outstanding common stock (or, 12,969,040 shares of our
      common stock) immediately after completion of these transactions after giving
      effect to the conversion of the Series A and Series B Preferred Stock into
      common stock.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 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 Series A Preferred Shares to the Infosmart Shareholders and,
      upon conversion, the shares of Cyber&#8217;s common stock underlying the Series A
      Preferred Shares, is intended to be exempt from registration under the
      Securities Act of 1933, as amended (the &#8220;Securities Act&#8221;), pursuant to
      Regulation S promulgated thereunder. The issuance of the Series B Preferred
      Shares to Investors is intended to be exempt from registration under the
      Securities Act pursuant to Section 4(2) thereof and such other available
      exemptions. As such, the Series A Preferred Shares and the Series B Preferred
      Shares, and upon conversion thereof, Cyber&#8217;s common stock, may not be offered or
      sold in the United States unless they are registered under the Securities Act,
      or an exemption from the registration requirements of the Securities Act is
      available. No registration statement covering these securities has been filed
      with the SEC or with any state securities commission in respect of the Exchange
      or the Financing.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">However,
      pursuant to the Exchange Agreement and in connection with Financing, Cyber
      entered into a registration rights agreement (the "Registration Rights
      Agreement") with the Investors and the Placement Agents. Pursuant to the
      agreements, Cyber has agreed to register for public re-sale the shares of
      Cyber&#8217;s common stock underlying the Series B Preferred Shares issued to the
      Investors in the Financing and the common stock issuable to each Investor and
      the Placement Agents pursuant to the warrants. In addition,&#160;Cyber has
      agreed to register for public re-sale after the Exchange: (i) 2,000,000 shares
      of Cyber&#8217;s common stock which are currently outstanding and have been granted
      piggyback registration rights, (ii) 7,104,160 shares of Cyber&#8217;s common stock
      currently held by KI Equity which do not have piggyback registration rights,
      (iii) the Gateway Shares (as defined below), (iv) approximately 6,484,519 shares
      of Cyber&#8217;s common stock underlying Series A Preferred Stock to be issued to
      Hamptons Investment Group Limited (&#8220;HIG&#8221;) immediately prior to the closing of
      the Exchange, and (v) 134,100 shares of Cyber&#8217;s common stock issued to
      Richardson &amp; Patel LLP after Closing for legal services rendered to Prime in
      connection with the Exchange and Financing. (The shares Cyber is required to
      register, as described above, are collectively referred to hereinafter as the
      &#8220;Registrable Securities&#8221;.) The Registration Rights Agreement provides that Cyber
      must file a Registration Statement on Form SB-2 (the &#8220;Registration Statement&#8221;)
      relating to the resale of the Registrable Securities within 30 days following
      the Closing (the &#8220;Filing Deadline Date&#8221;) and shall use its commercially
      reasonable efforts to cause such Registration Statement to become effective
      within 150 days following the Closing. In the event that it does not meet its
      registration obligations, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">then
      Cyber has agreed to pay </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">holders
      of Series B Preferred Stock and Warrants</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
      as
      partial liquidated damages for the damages to them by reason thereof, and not
      as
      a penalty, at a rate equal to two percent (2%) of the purchase price of the
      shares held by each </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">holder
      of
      Series B Preferred Stock and Warrants</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      per
      month, for each calendar month of the Registration Default Period (pro rated
      for
      any period less than 30 days), subject to a cumulative maximum value of 14%;
      provided, however, if a breach of the Registration Rights Agreement obligation
      occurs (or is continuing) on a date more than one year after the purchaser
      acquired the Registrable Securities (and thus the one year holding period under
      Rule 144(d) has elapsed), liquidated damages shall be paid only with respect
      to
      that portion of a purchaser&#8217;s registrable securities that cannot then be
      immediately resold in reliance on Rule 144; </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">provided
      a legal opinion with respect to the availability of Rule 144 for the resale
      of
      Registrable Securities received upon conversion of the Series B Preferred Shares
      has been rendered by a law firm acceptable to both the Company and the Holder
      as
      evidence that Rule 144 is available for such Registrable Securities</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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        </div>
      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">5</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
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      </div>
      <div>&#160;</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
      connection with the Closing, Cyber filed a press release announcing the Closing
      and the completion of the Financing, a copy of which is attached to this Current
      Report on Form 8-K as Exhibit 99.1.</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">Except
      for the Exchange Agreement and the transactions contemplated by that agreement,
      neither Cyber, nor the directors and officers of Cyber serving prior to the
      consummation of the Exchange, had any material relationship with Infosmart,
      or
      any of the Infosmart Shareholders. </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">Cyber
      is
      presently authorized under its Articles of Incorporation to issue 40,000,000
      shares of common stock, no par value per share, and 10,000,000 shares of
      preferred stock, no par value per share. Of the 10,000,000 shares of preferred
      stock authorized, 1,200,000 shares were designated as Series A Convertible
      Preferred Stock and 1,800,000 shares were designated as Series B Convertible
      Preferred Stock pursuant to Certificates of Determination ("Certificates of
      Determination") that were approved by Cyber's board of directors, and filed
      with
      and accepted by, the Secretary of State of the State of California prior to
      the
      Closing of the exchange transaction. Further, pursuant to the Exchange
      Agreement, Cyber issued 2,850,000 shares of Cyber&#8217;s common stock to Worldwide
      Gateway Co., Ltd. (&#8220;Gateway&#8221;) immediately prior to the Closing for Gateway&#8217;s
      services as a consultant to Cyber connection with the Exchange (&#8220;Gateway
      Shares&#8221;). Thus, as of the Closing, and immediately after the completion of the
      Financing, Cyber had 12,969,040 shares of common stock issued and outstanding,
      1,000,000 shares of Series A Preferred Stock issued and outstanding, and
      1,092,857.143 shares of Series B Preferred Stock issued and
      outstanding.</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">MANDATORY
      CONVERSION OF PREFERRED STOCK INTO 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">Under
      the
      terms of the Exchange Agreement, the Infosmart Shares held by the Infosmart
      Shareholders were exchanged for 1,000,000 shares of our Series A Preferred
      Stock. Each Series A Preferred share will be convertible into 116.721360 shares
      of Cyber&#8217;s common stock (the &#8220;Conversion Rate&#8221;). The Series A Preferred Shares
      will immediately and automatically be converted into shares of Cyber&#8217;s common
      stock (the &#8220;Mandatory Conversion&#8221;) upon the approval by a majority of Cyber&#8217;s
      stockholders (voting together on an as-converted-to-common-stock basis),
      following the Exchange transaction, of an increase in the number of authorized
      shares of Cyber&#8217;s common stock from 40,000,000 shares to 300,000,000 shares and
      a change of Cyber&#8217;s corporate name (collectively, the &#8220;Corporate Actions&#8221;). In
      connection with the Closing, KI Equity and the Infosmart Shareholders entered
      into a voting agreement (&#8220;Voting Agreement&#8221;) to vote their Cyber shares in favor
      of the Corporate 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: 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 Preferred Stock (including the Investors acquiring such shares as
      part of the Financing after the Closing of the Exchange) are entitled to vote
      together with the holders of the common stock, as a single class, upon all
      matters submitted to holders of common stock for a vote. Each share of Preferred
      Stock will carry a number of votes equal to the number of shares of common
      stock
      issuable as if converted at the record date. As such, after the Closing and
      the
      Financing, the Infosmart Stockholders, and Investors have 91.84% of the total
      combined voting power of all classes of Cyber 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">
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
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      </div>
      <div>&#160;</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">Upon
      Mandatory Conversion of the shares of Series A and Series B Preferred Stock,
      the
      Infosmart Stockholders and Investors will, in the aggregate, receive
      approximately 146,031,705 shares of Cyber's common stock, representing 91.84%
      of
      the outstanding shares of Cyber's common stock immediately following the
      Mandatory Conversion. The stockholders of Cyber immediately prior to the
      Exchange will, following the Mandatory Conversion, own approximately 12,969,040
      shares of Cyber's common stock, representing 8.16% of the outstanding shares
      of
      common stock.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Effective
      as of the Closing, Kevin R. Keating, Margie L. Blackwell, Luca Toscani and
      Jeff
      L. Andrews resigned as a directors of Cyber and following persons were appointed
      to Cyber&#8217;s board of directors:</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: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 25.6pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Kwok
      Chung (&#8220;Andy Kwok&#8221;), InfoSmart&#8217;s current Chief Executive Officer</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;
      </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 25.6pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sze
      Po
      Nei (&#8220;Pauline Sze&#8221;), InfoSmart&#8217;s current Chief Financial Officer</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;
      </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 25.6pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Andrew
      Chung Yuen Chang (&#8220;Andrew Chang&#8221;), a director of InfoSmart</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;
      </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 25.6pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Godwin
      Wong, an independent director designated by KI Equity.</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">Additional
      information concerning Andy Kwok, Pauline Sze, Andrew Chang and Godwin Wong
      is
      set forth below. </font><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>BUSINESS
      </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>BUSINESS
      OF CYBER</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">Prior
      to
      the Closing, Cyber was a public &#8220;shell&#8221; company with nominal assets whose sole
      business has been to identify, evaluate and investigate various companies with
      the intent that, if such investigation warrants, a reverse merger transaction
      be
      negotiated and completed pursuant to which Cyber would acquire a target company
      with an operating business with the intent of continuing the acquired company&#8217;s
      business as a publicly held 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 style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>BUSINESS
      OF INFOSMART</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"><strong>Overview</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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Infosmart
      manufactures 8x and 16x&#160;recordable digital versatile&#160;discs (&#8220;DVDRs&#8221;),
      and is preparing to launch production of new optical storage media, namely,
      high
      density DVDR (&#8220;HD DVD&#8221;)/Blu-Ray discs. Infosmart operates a state of the art
      recordable DVDR factory in Hong Kong, which is presently operating at maximum
      capacity. In order to act as a one-stop-shop for the optical storage media
      needs
      of its customers, Infosmart outsources orders for products it does not produce
      itself, such as DVD&#177;RW and DVD-RAM and other low margin DVDR items. However,
      there has been a permanent shift in Infosmart&#8217;s operations in favor of sales of
      own-manufactured discs: 89% of Infosmart&#8217;s revenues in 2005 were from sales of
      manufactured discs, up from 66% in 2004. In the future, Infosmart expects sales
      of purchased discs to be insignificant. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Infosmart
      is establishing a production facility and a sales base in Brazil in 2006.&#160;
Infosmart intends to boost its productivity and return on investment from its
      existing DVDR equipment by relocating some production to Brazil, one of the
      world&#8217;s largest developing economies. </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">
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      </div>
      <div>&#160;</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
      March
      2006, Infosmart formed Discobras, a Brazilian company, with a local partner,
      with registered capital of US$8 million. Infosmart&#8217;s subsidiary, IS Media, holds
      a 99.42% ownership interest in Discobras and the local partner holds the
      remaining 0.58% ownership interest in Discobras. Infosmart has already received
      licenses and all necessary documents and approvals for operating a DVDR
      production facility in Brazil. The facility has been leased since April 2006
      and
      is already prepared for machines to be installed in&#160;October 2006.
      Production in Brazil&#160;is expected to&#160;start in the&#160;fourth quarter
      of 2006. Infosmart&#8217;s Regional Director for South America, Sebastian Tseng, has
      lived in Argentina for many years, speaks fluent Spanish and is conversational
      in Portuguese.</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">Infosmart&#8217;s
      strategy is to continue to produce 8x and 16x discs for developed and,
      increasingly, developing economies, while preparing some of its production
      lines
      for next generation media - HD DVD output. By the end of 2007, management plans
      to have at least two production lines converted to HD DVD output and another
      44
      lines ready for conversion. The timing of product and territory market entry
      and
      exit is a critical determinant of success in the optical media market.
      Flexibility in Infosmart&#8217;s technology base and manufacturing locations will
      enable the company to time the switch of emphasis to HD DVD production and
      regional markets according to local information and actual, rather than
      projected, market developments.</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">
      <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">Infosmart
        was incorporated in the British Virgin Islands on August 23, 2005 under the
        International Business Companies Act, British Virgin Islands. Pursuant to
        a
        group reorganization (&#8220;Infosmart Reorganization&#8221;) completed in October 2005,
        Infosmart became the holding company of IS Technology, IS International and
        IS
        Media by the acquisition of 100% (directly and indirectly) of the issued
        and
        outstanding common stock of each such entity. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Founded
        in Hong Kong in August of 2002, IS Technology was the first company in Hong
        Kong
        to manufacture recordable digital versatile disks. With the continual growth
        in
        DVDR demand, the initial shareholders of IS Technology took in other
        shareholders to form the other two companies, IS International and IS Media,
        to
        produce DVDRs. These three companies form Infosmart&#8217;s main operational business.
        In fiscal 2004, Infosmart&#8217;s revenues were $22,421,765 and its net income was
        $3,024,300. In fiscal 2005, Infosmart&#8217;s revenues were $24,577,206 and its net
        income was $4,214,761. Infosmart currently has customers in Western Europe
        and
        Australia and plans further expansion into North and South America, the Middle
        East, Africa, Eastern Europe and Russia.</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"><strong>Industry
        Overview and Market Opportunity</strong></font></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
      general, demand for DVDR discs has been growing rapidly. Such increased demand
      has been driven by the higher market penetration of DVD drives, players and
      recorders, which was boosted by the rapid rise in the number of movies marketed
      in the DVD format. The installed base of DVD drives, players and recorders
      doubled from approximately 200 million units in 2004 to approximately 390
      million units in 2005. These estimates are inclusive of the installed base
      of
      DVD drives in personal computers (PCs) which was estimated to rise from 81
      million in 2004 to 158 million in 2005. In addition, worldwide demand for DVDR
      discs grew 12% in 2004 to approximately 2.1 billion units in 2005. Management
      believes the writable DVDR market saw a 93% sales volume growth in 2005. Due
      to
      strong growth of worldwide DVD recorder shipment and PC installation and prices
      of DVD drives falling 2%-3% per year, annual DVDR disc demand is projected
      to
      rise to around 4 billion units by 2005 and peak at almost 9 billion discs per
      year by 2008. </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">Currently,
      the largest markets for DVDR discs are Europe, USA and Japan.&#160;We believe
      that&#160;demand for DVDR discs from South America, the Middle East and Eastern
      Europe will grow quickly. Taiwanese companies account for approximately 60%
      of
      the world&#8217;s installed DVDR disc production capacity and output. </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">Computer
      storage media products that have historically competed with DVDR discs include
      hard discs, USB drives and flash memory, and floppy discs. Hard discs have
      up to
      500GB of capacity, cost around $0.75/GB and are the most economical choice
      for
      large storage needs. However, the hard disc is less versatile, more fragile
      and
      harder to install than optical storage media; it is also bulky and has poor
      portability. Both USB drives and flash memory are compact in size and provide
      great portability and reusability, but are relatively expensive ($70-$100/GB)
      and have limited storage capacity (maximum only 1-2 GB). These devices are
      mainly used to store computer and music/home video files where portability
      is
      required. Floppy disc capacity is too small for multimedia or today&#8217;s software
      files.</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">For
      full
      movies or computer file backups, CD-R and DVDR offer large (from 750MB to 9.4GB)
      and economical (from $0.18 to $0.80 per disc) storage solutions. Rewritable
      DVD&#177;RW discs are reusable but more expensive, and therefore less popular, than
      write-once DVD&#177;R discs. </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 its historical competitors, DVDR now faces competition from newer
      forms of optical storage mediums, such as HD DVD and Blu-Ray. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Older
      technology such as SL DVD already has an established large hardware base and
      thus there is constant demand for SL DVD media around the globe. These large
      volume production items like 8x and 16x SL DVDR discs can be rapidly produced
      and sold with little incremental effort. The high-tech consumers in developed
      countries, however, are demanding higher reading and writing speed and larger
      capacity for their growing needs on sizeable applications, files and
      high-definition media contents. Sales of 8x SL DVDR is on the downward trend
      as
      consumers can get 16x SL DVDR with negligible price difference. </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: 10pt; FONT-FAMILY: ">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>&#160;</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">Over
      time, the demand for DVDR discs may shift away from SL DVD and towards other
      forms of optical storage media with larger capacity and higher data transfer
      rates. For technical reasons, 16x represents the speed limit for DVDR discs,
      and
      thus faster data transfer can only be achieved by increasing the quantity of
      information transferred per second. This has spurred the development of a range
      of technologies designed to increase the density of information storage on
      DVD
      discs, such as using lasers of different wavelengths (HD DVD or Blu-Ray) or
      a
      second layer information storage on the disc (DL DVD). How effectively such
      newer technologies compete in the optical storage media depends on a number
      of
      factors, as discussed below.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Global
      DVDR disc production is highly competitive and manufacturers must continuously
      cut costs and keep up with product life cycles to survive. Market timing is
      critical in the optical storage media market. Management expertise is necessary
      in order to judge market entry at the early growth phase of a product cycle.
      Manufacturers that enter a product market too early in the introduction stage
      of
      the life cycle face insufficient demand, high production costs and the risk
      that
      their production technology will be overtaken by subsequent innovations. Those
      who enter too late, as many did with respect to the 4x DVD disc market in
      2003/2004, may face falling margins in a maturing or declining market as the
      relevant product nears the end of its life cycle. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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
      product cycle for SL DVD in developed countries, like Europe and the U.S.,
      is in
      the maturity stage, as reflected by a high quantity of demand and falling
      prices. With the introduction of HD DVD and Blu-Ray, SL DVDR demand might
      further decrease as consumers turn to HD DVD or Blu-Ray for their high capacity
      storage needs for high definition media. In Infosmart&#8217;s analysis, HD DVD and
      Blu-Ray discs are still in the introduction stage. These items currently have
      a
      low share of the DVD market but their share could grow very rapidly if the
      products are successfully commercialized. The development of high density
      optical media awaits resolution of the format war between HD-DVD and Blu-Ray
      and
      technical maturity of the production process before the full market potential
      of
      these products can be realized.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Due
      to a
      sooner than expected release of HD DVD and Blu-Ray hardware and media into
      the
      market, the DL DVDR had quickly gone past the growth phase of its product life
      cycle since late 2005. The price and market demand for DL DVDR has dropped
      substantially with consumers waiting for the launch of the next generation
      high-density media. DL DVDR has quickly become one of those products that is
      expected to be displaced by more advanced 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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      contrast to developed countries, demand for DVDR discs continues to grow in
      developing countries. With the disparity between developed and developing
      countries, the demand for all high-tech products, including DVDs, in developing
      countries lagged behind the demand for same products in developed countries.
      The
      time gap between technology adoption in developed and developing countries
      has
      prolonged the original product life cycle for optical storage media. Currently,
      8x DVDR has already reached the maturity stage (or even the decline stage)
      of
      the product life cycle in developed countries such as U.S., Europe and
      Australia. However, the same 8x products are in the growth stage in developing
      countries such as those in South America and Africa. Therefore, by capturing
      the
      market in these developing markets, Infosmart can maximize the productivity
      and
      the values of its existing DVDR machines. The prices for DVDR products are
      also
      better in developing countries than in developed countries where the prices
      are
      driven down by intense competition. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Infosmart
      currently manufactures 8x and 16x write-once DVDR discs which are sold in
      several countries worldwide and believes that demand for recordable DVDR
      products will continue to grow in the foreseeable future, especially in
      developing countries. To increase sales in developed countries, Infosmart plans
      to focus some&#160;of its production on the HD DVD. Infosmart is preparing for
      HD DVD production. Thirty two (32) of Infosmart&#8217;s forty four (44) production
      lines can be upgraded to HD DVD production at a time of management&#8217;s choosing.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Infosmart
      is positioned as a strong competitor in meeting the growing demand for
      recordable DVD products. Infosmart is a DVDR manufacturer with no obsolete
      legacy CD plants and it offers a combination of the following key factors needed
      for success in this innovative sector: ability to time market entry to match
      the
      growth phase in a product&#8217;s life cycle; ability to time exit from mature markets
      when unprofitable; adaptability achieved by using upgradeable manufacturing
      technology; flexibility gained by using outsourced capacity where necessary
      as
      products mature; cost competitiveness; and entrepreneurial drive. Infosmart
      already has a large base of customers and is striving to find new customers
      for
      its products. </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      explained above, the timing of market entry and exit is a critical determinant
      of success in the optical media market. By entering the lucrative storage media
      market in Brazil in the early growth stage, Infosmart can maximize the revenue
      potentials of its existing production lines. Infosmart is also preparing to
      launch production of HD-DVD/Blu-Ray discs at the optimal time.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div 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: 10pt; 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>&#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>Employees</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
      of
      June&#160;30, 2006, we had 148 full-time employees, including management. None
      of these employees are represented by any collective bargaining agreements.
      Neither we nor any of the subsidiaries have experienced a work stoppage.
      Management believes that our relations with our employees are good.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Current
      Products</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">Currently,
      sales of our 8x DVDR disc account for approximately between 70% to 80% of
      Infosmart&#8217;s output; 16x DVDR discs make up the remainder. Management expects 8x
      sales to remain the bulk of Infosmart&#8217;s sales partly because the Brazilian
      market is overwhelmingly an 8x market. Management expects the contribution
      to
      sales by product in 2006 and 2007 to follow the pattern set out in the table
      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 align="center">
      <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="75%">

          <tr>
            <td align="left" valign="bottom" width="71%" 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>Disc
                Type</strong></font></div>
            </td>
            <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006E</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007E</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="71%" 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"><strong>16x</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;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" 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="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">14</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="71%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>8x</strong></font></div>
            </td>
            <td width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">72</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">74</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="71%" 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"><strong>HD
                DVD</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;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #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="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">12</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="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Research
      and Development</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="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">Infosmart
      plans to invest $1,250,000 over the next 18 months on pre-production activities
      for HD DVD production, including dye and stamper testing, mould modification
      and
      process fine-tuning. In order to be one of the first manufacturers to
      mass-produce HD DVDs to coincide with the early growth phase of the product
      life
      cycle, Infosmart has been working closely with dye and stamper developers in
      Taiwan and will be conducting pre-production testing to prepare for HD DVD
      production. However, if the market turns in favor of Blu-Ray, the Company will
      have to purchase new equipment to produce Blu-Ray discs.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="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>Manufacturing</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">Infosmart
      currently operates three factories, whose combined production capacity is 12
      million 8x and 16x SL DVDR discs per month. Currently, the product mix is about
      70-80% of 8x discs and 20-30% of 16x discs. Infosmart has the flexibility to
      switch production easily between the two product types. After manufacturing
      the
      discs, Infosmart puts its products through a rigid quality assurance
      process.&#160;Infosmart&#8217;s Quality Management System complies with ISO9001:2000
      requirements and Infosmart is ISO 9000 certified. Our production equipment
      is
      easily upgradeable to HD DVD production, and the company will derive competitive
      advantage from this flexibility if HD DVD wins the standard war against Blu-Ray.
      Whichever format wins, however, the Company expects to make needed production
      purchases in 2007 in order to catch the expected first waves of demand in the
      high definition media storage market.</font></div>
    <div>&#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>Intellectual
      Properties and Licenses </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">Infosmart
      does not own any patents or any other intellectual properties.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>&#160;</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      intellectual properties used in manufacturing our products are provided to
      us
      pursuant to two separate cooperation agreements described below. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div 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: 10pt; 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>&#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"><em><u>Agreement
      1</u></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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      first
      cooperation agreement (&#8220;Agreement 1&#8221;) was entered into between our subsidiary
      Infosmart Technology Limited (&#8220;IS Technology&#8221;) and Mega Century Limited (&#8220;Mega
      Century&#8221;), a Hong Kong company formerly controlled by Chief Financial Officer
      Pauline Sze) on January 1, 2006. Under Agreement 1, the parties agreed to
      combine operationally their production facilities so that Mega Century and
      IS
      Technology can both produce DVDRs using certain intellectual properties for
      the
      production of DVDRs for which Mega Century was granted a patent licenses (the
      &#8220;Patent License&#8221;) for use by the DVD developer, and also the right to
      manufacture DVDRs under a government manufacturing license (the &#8220;Manufacturing
      License&#8221;) held by the Mega Century. In addition, Mega Century agreed that (1) IS
      Technology has full legal and beneficial ownership of the first 6,500,000 DVD
      discs (the &#8220;First Minimum Quantity&#8221;) produced in IS Technology&#8217;s production
      facilities each whole month during the one year term of Agreement 1, which
      IS
      Technology can sell to third parties or to Mega Century; and (2) for any amount
      of DVDs produced in excess of the First Minimum Quantity (excluding quantities
      sold by IS Technology directly to Mega Century), IS Technology will receive
      70%
      of the gross profits from the sale of such DVDs. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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
      exchange, IS Technology agreed that for any amount of discs produced in excess
      of the First Minimum Quantity (excluding quantities sold by IS Technology
      directly to Mega Century), Mega Century receives 30% of the gross profits from
      the sale of such DVDs. Under Agreement 1, Mega Century is responsible for paying
      all the relevant licensee fees and IS Technology is responsible for all the
      recurrent costs and expenses incurred for the production of all DVD products
      manufactured at IS Technology&#8217;s production facility during the one
      year&#160;term of Agreement 1. On January 1, 2006, Mega Century, IS Technology
      and Infosmart International Enterprises Limited (&#8220;IS International&#8221;) entered
      into an Amendment Agreement amending Agreement 1 whereby IS International agreed
      to be an additional party to Agreement 1 and to undertake IS Technology&#8217;s rights
      and obligations with IS Technology, jointly and severally.</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"><em><u>Agreement
      2</u></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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      second cooperation agreement (&#8220;Agreement 2&#8221;) was entered into between our
      subsidiary Infoscience Media Limited (&#8220;IS Media&#8221;) and Infoscience Holdings
      Limited, an independent third party, (the &#8220;Third Party&#8221;) on December 1, 2005.
      Under Agreement 2, the parties agreed to combine operationally their production
      facilities so that both IS Media and the Third Party can both produce DVDRs
      at
      their combined facilities using certain intellectual properties for the
      production of DVDs for which the Third Party holds patent licenses (the &#8220;Patent
      License&#8221;) for use from the DVD developer (the &#8220;License Agreement&#8221;) and also a
      right to manufacture DVDs under a government manufacturing license (the
&#8221;Manufacturing License&#8221;) held by the Third Party. The Third Party also agreed
      that IS Media shall have full legal and beneficial ownership of the first
      5,000,000 DVD discs (the &#8220;Second Minimum Quantity&#8221;) produced in both IS Media&#8217;s
      and the Third Party&#8217;s production facilities (the &#8220;Combined Facilities&#8221;) for each
      whole month during the one year term of Agreement 2.</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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      exchange, IS Media agreed: (1) the Third Party shall receive full legal and
      beneficial ownership of all DVDs produced in the Combined Facilities that are
      in
      excess of the Second Minimum Quantity; and (2) to provide the Third Party with
      stand-by credit facility of not more than HK$30,000,000 from IS Media&#8217;s own
      sources or indirectly from any third party including any licensed Hong Kong
      bank. Under Agreement 2, the Third Party is responsible for paying all the
      relevant licensee fees and IS Media is responsible for all the recurrent costs
      and expenses (except for rent and public utilities, for which each party is
      responsible for the costs they incur in their own production facility) incurred
      for the production of all DVD products manufactured in the Combined Facilities
      during the one year&#160;term of Agreement 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="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em><u>Patent
      Licenses</u></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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">plan
      to
      directly apply for both a Patent License from the DVD developer&#160;to produce
      the Products and also the Manufacturing License in 2006 before the expiration
      of
      Agreement 1 and Agreement 2. In addition, upon completion of the Discobras
      DVDR
      production facility Brazil, Infosmart will also apply for the required Patent
      License for use of intellectual property required to manufacture its DVDR
      products in Brazil. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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
      Patent Licenses discussed above were both granted under </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
      Patent Licenses discussed above that that are held by Mega Century and the
      Third
      Party were obtained through a joint patent licensing program (the &#8220;DVDR Patent
      License Program&#8221;) that is administered by Koninklijke Philips Electronics, N.V.
      (&#8220;Philips&#8221;). Parties acquiring the patent licenses through this DVDR Patent
      License Program are allowed to use patents owned (or for which these companies
      have patent applications pending) by participating companies including Philips,
      Sony, Hewlett Packard and/or Pioneer that are essential in the DVDR
      manufacturing process. The patent license offered through Philips&#8217; DVDR Patent
      Licensing Program is offered under non-discriminatory terms and conditions
      and
      in principle is available to all manufacturers. Thus, Infosmart should be able
      to gain approval upon application for use of the Patent Licenses. However,
      in
      the event that such approval is delayed for a long period or denied, then
      Infosmart plans to renew the Cooperation Agreements so that Infosmart can
      continue to produce its DVDR 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">
      <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: 10pt; 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>&#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"><strong>Production
      Costs</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Raw
      material costs constitute approximately 50% of the production costs for DVDR
      discs. Key materials used in DVDR production are polycarbonate, silver target,
      organic dye, printing oil and bonding glue. The most important cost item is
      polycarbonate, which accounts for about half of cost of goods sold.</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
      supply market for polycarbonate is competitive. Major polycarbonate suppliers
      include Teijin Chemicals, Dow Chemical, General Electric, Bayer, and Mitsubishi.
      Infosmart orders polycarbonate from a variety of sources depending on price
      and
      availability. Since polycarbonate is a petroleum byproduct its price is affected
      by crude oil prices and can be volatile. Infosmart places three (3) month supply
      contracts with polycarbonate vendors. These supply contracts guarantee quantity
      but leave pricing to be market determined. </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">Polycarbonate
      prices (PCB) increased from $1.90 - 2.50/kg in 2004 to around $2.80/kg -
      $3.50/kg in 2005 because of surging oil prices and supply constraints, thereby
      seriously cutting the profit margins of disc manufacturers worldwide. Capacity
      was hit in 2004 by the explosion of GE&#8217;s PCB factory in Spain. At the end of
      2005, worldwide PCB capacity expanded as a major new factory came online in
      Shanghai, and two other large factories in Japan and the U.S. expanded output
      in
      response higher market prices. PCB prices were approximately $3.00/kg - $3.10/kg
      at the beginning of 2006, and have since dropped into the $2.80-$3.10 range.
      It
      is anticipated that expanded industry capacity for PCB will offset upward price
      pressures resulting from rising oil prices, leading to price stability or even
      a
      modest price decline in PCB prices in the near term.</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>Marketing
      And Distribution</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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      mainly
      sell to distributors, who resell to retailers. Infosmart has acquired about
      80%
      of its customers, and increased its exposure in Europe, USA, South America,
      the
      Middle East, Asia and China, through attendance at trade shows such
      as:</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: 63pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 24.9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CeBIT
      (Hannover, Germany) 2003, 2004, 2005</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 24.9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Comdex
      (Las Vegas, USA) 2003</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 24.9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Computex
      (Taipei, Taiwan) 2004</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 24.9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gitex
      (Dubai, UAE) 2004 and 2005</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 24.9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">China
      Sourcing Fairs 2004 </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 24.9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">IT
      Brazil
      2005, 2006</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 24.9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hong
      Kong
      Electronics Show 2004, 2005, 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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Infosmart
      has gained the rest of its customers mainly through print advertising and
      referrals.</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: 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">Infosmart
      is also planning a marketing campaign in Brazil including advertisements in
      Brazilian newspapers and magazines, and it also plans to attend the following
      local Brazilian trade exhibitions in 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: 63pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 24.9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Abras
      (exhibition for buyers and purchasers for supermarkets and retail
      shops)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 24.9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">HI-FI
      (exhibition of audio and video products)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 24.9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ESCORALERES
      (exhibition for schools and student usage products)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 24.9pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">GAME
      (video game trade show)</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>Targeted
      New Overseas Markets</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="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>South
      America and Brazil</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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Infosmart
      received several large orders after attending the IT Brazil 2005 exhibition.
      We
      expect sales in South America will grow dramatically in the near future and
      Infosmart plans to deepen penetration of key South American markets in 2006
      by
      establishing a production facility and sales office in Brazil. We plan to
      achieve these objectives through Discobras, a Brazilian joint venture in which
      we have a 99.42% stake. For other South American countries, Infosmart will
      select strong distribution partners, conduct more marketing activities and
      exhibitions, and pre-positioning inventory in bonded warehouses in the region
      to
      ensure prompt delivery. </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: 10pt; FONT-FAMILY: ">12</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
      <div>&#160;</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">Brazil
      will be Infosmart&#8217;s main focus in 2006. In addition to attending IT Brazil 2006,
      Infosmart will attend local computer games exhibitions and the main tradeshow
      for supermarket and chain store buyers in 2007. Infosmart&#8217;s sales team will
      continue to secure distributors and strategic channel partners for specific
      territorial submarkets in Brazil. </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">Infosmart
      plans to launch its own brand &#8220;Discobras&#8221; in the Brazilian retail market from
      2007, with sales to supermarkets and chain stores such as Bompreco (a Wal-Mart
      subsidiary). Management expects that sales directly to retailers will generate
      higher profit margins sales to local wholesalers, and has earmarked a $650,000
      budget for this marketing effort over the next 18 months.</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">Management
      believes that Infosmart&#8217;s Brazilian plant will support the company&#8217;s push to
      become known as a top quality local DVDR manufacturer that offers stable supply
      and competitively priced products. Infosmart offers a 100% guarantee against
      defects in materials and workmanship for all its products. The company&#8217;s quality
      control system in Hong Kong for the DVDR manufacturing process complies with
      ISO
      9001:2000 standards, and the entire manufacturing process and system from Hong
      Kong will also be applied to the Brazilian production facility.</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>Other
      Developing Markets - The Middle East, Africa, Eastern European
      Region/Russia.</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="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">Some
      of
      Infosmart&#8217;s Western Europe distributors sell the company&#8217;s products to retailers
      in the Middle East and Eastern Europe. We plan to exploit opportunities in
      major
      developing markets in the Middle East, Africa, Russia and Eastern Europe
      countries directly by attending tradeshows and advertising in trade
      websites.</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>Online
      Marketing Exposure</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Internet is increasingly being used for product sourcing. Infosmart currently
      invests $20,000 per year on online exposure in industry portals such as
      globalsources.com, alibaba.com and the Hong Kong Trade Development Council
      website. Infosmart plans to increase its online promotional activities.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Current
      Customers</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      have
      established a wide client base and distribution network covering Europe/UK,
      the
      Middle East, Australia/New Zealand, and Asia. </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">Infosmart&#8217;s
      top 3 customers by value, who accounted for 84% of our revenue in 2005, are
      as
      follows: </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%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">
            </td>
            <td align="left" style="width: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></td>
            <td align="left">
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">E-Net
                Distribution is the largest optical media distribution company in
                Europe;
                business from E-Net contributes 69% of Infosmart&#8217;s revenue. E-Net sells to
                European as well as Middle Eastern retailers and sources from Infosmart
                about 15% of the blank DVDR discs that it sells.
                </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">
            </td>
            <td align="left" style="width: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></td>
            <td align="left">
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">NaSa
                Multimedia Technology (NaSa) markets Infosmart&#8217;s DVDR blank media in
                Australia and New Zealand under its &#8220;Laser&#8221; brand. NaSa obtains 80-100% of
                its DVDR blank media supplies from Infosmart. Sales to NaSA account
                for
                8.7% of Infosmart&#8217;s revenue.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; 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%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">
            </td>
            <td align="left" style="width: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></td>
            <td align="left">
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">DVD
                Technology, a leading distributor of optical storage products in
                the UK,
                also sells to continental Western and Eastern European retailers.
                DVD
                Technology&#8217;s obtains about 20% of its DVDR blank media supplies from
                Infosmart. Sales to DVD Technology account for 6.5% of Infosmart&#8217;s
                revenue.</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">Management
      expects that the proportion of revenue accounted for by these customers will
      decrease as its new markets develop in South America. Infosmart will be careful
      to maintain relationships with existing customers in developed countries because
      they are expected to be volume buyers of Infosmart&#8217;s HD DVD discs.</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">Our
      pricing and payment terms are flexible. Infosmart&#8217;s objective is to build a
      strong base of loyal customers and management will offer competitive price
      to
      capture market share in specific markets that have strong growth prospects.
      Our
      payment terms are more stringent for new customers and more flexible for
      long-term customers and established businesses. </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: 10pt; FONT-FAMILY: ">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>&#160;</div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <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
        Brazil local market, it is the norm to pay Cash on Delivery (C.O.D.). Infosmart
        does not intend to give any payment terms to its Brazilian customers in 2006,
        which will eliminate any credit risk from new customers in this newly developed
        market. Only when Infosmart starts dealing with major supermarkets and chain
        stores in 2007, will Infosmart be giving payment terms of up to sixty (60)
        days
        for these long-term customers. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>&#160;</em></strong></font></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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Competition</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Competitive
      Products</em></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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      currently produce Single Layer (&#8220;SL&#8221;) DVDR discs of two writable speeds (8x and
      16x), but we are preparing to launch production of High Density discs in the
      HD
      DVD format. The table and discussion below describe some competitor 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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Computer
      storage media comparison</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="100%">

          <tr>
            <td align="left" valign="bottom" width="36%" 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>Product</strong></font></div>
            </td>
            <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="right" colspan="2" valign="bottom" width="13%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Media
                Type</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">
              <div>&#160;</div>
            </td>
            <td align="right" colspan="2" valign="bottom" width="13%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Storage
                Capacity</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">
              <div>&#160;</div>
            </td>
            <td align="right" colspan="2" valign="bottom" width="13%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Unit
                Price ($)</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">
              <div>&#160;</div>
            </td>
            <td align="right" colspan="2" valign="bottom" width="16%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Price
                per MB (&#162;/MB)</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="36%" 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"><strong>Floppy
                Disc</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="12%" 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">Non-
                optical</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="12%" 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="12%" 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">0.22</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="15%" style="border-bottom: #ccffcc;">
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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="36%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>USB
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            <td width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">Non-
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            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2
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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="12%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">70
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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="15%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7-12</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="36%" 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"><strong>Flash
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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;">&#160;</td>
            <td align="right" valign="bottom" width="12%" 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">Non-
                optical</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="12%" 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
                GB</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="12%" 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">76
                - 120</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="15%" 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">7.4-11.7</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="36%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Hard
                Disc</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="12%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">Non-
                optical</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">200
                GB</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">130</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="15%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.06</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="36%" 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"><strong>CD-R</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="12%" 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">Optical
                </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="12%" 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">700
                MB</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="12%" 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">0.18-0.30</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="15%" 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">0.026-0.043</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="36%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DVD&#177;R*</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="12%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">Optical</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4.7
                GB</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.6-0.8</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="15%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.012-0.017</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="36%" 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"><strong>DL
                DVD&#177;R*</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="12%" 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">Optical</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="12%" 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">8.5
                GB</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="12%" 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">2.50</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="15%" 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">0.029</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="36%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>HD
                DVD**</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="12%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">Optical</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">15-30
                GB</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="12%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10-15</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="15%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.05-0.07</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="36%" 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"><strong>Blu-Ray</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="12%" 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">Optical</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="12%" 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">25-50
                GB</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="12%" 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">25-30</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="15%" 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">0.06-0.10</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Note:
      1GB
      = 1024 MB</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Optical
      storage media, hard discs, USB drives and flash memory are the most commonly
      used computer storage media. Hard discs have up to 500GB of capacity, cost
      around $0.75/GB and are the most economical choice for large storage needs.
      However the hard disc is less versatile, more fragile and harder to install
      than
      optical storage media; it is also bulky and has poor portability. </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">Both
      USB
      drives and flash memory are compact in size, provide great portability and
      reusability, but are relatively expensive ($70-100/GB) and have limited storage
      capacity (maximum only 1-2 GB). These devices are mainly used to store computer
      and music/home video files where portability is required. Floppy disc capacity
      is too small for multimedia or today&#8217;s software files.</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">For
      full
      movies or computer file backups CD-R and DVDR offer large (from 750MB to 9.4GB)
      and economical (from $0.18 to $0.80 per disc) storage solutions. Rewritable
      DVD&#177;RW discs are reusable but more expensive, and therefore less popular, than
      write-once DVD&#177;R discs. </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">HD
      DVD
      and Blu-Ray represent the next optical media generation after DL DVD. HD DVD
      specifications were proposed in February 2004 by NEC and Toshiba. Blu-Ray and
      HD
      DVD discs have ultra-large capacity and are predicted to be impacting the market
      in a significant way from late 2006 to 2007.</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"><strong><em>Competitor
      Companies</em></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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Infosmart&#8217;s
      competitors are numerous and include companies such as CMC Magnetics and UME
      Disc Group. Some of Infosmart&#8217;s competitors have significantly larger
      manufacturing market share, but that is not necessarily indicative of greater
      profitability. Infosmart believes that it has achieved optimal capacity and
      can
      match the lowest SL DVD production costs anywhere in 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 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: 10pt; FONT-FAMILY: ">14</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="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>Product
      Mix</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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Currently,
      8x DVDR discs account for 100% of Infosmart&#8217;s exports to Brazil and
      approximately 70% of Infosmart&#8217;s output by value in Hong Kong, while 16x DVDR
      discs make up the remainder. Management expects that the demand for 8x DVDR
      discs in Brazil will be strong for the foreseeable future because current
      recording hardware installed in Brazil and other developing countries mostly
      utilize 8x DVDR discs. Infosmart expects to ship almost 20 million 8x DVDR
      discs
      from Hong Kong to Brazil in 2006 to satisfy Brazilian demand before the
      Discobras plant begins production. Infosmart expects the Discobras production
      facility will produce 13.2 million 8x DVDR discs in 2006 and 67.6 million discs
      in 2007. Infosmart&#8217;s Hong Kong production facilities are projected to produce
      50.6 million and 58.1 million 8x DVDR discs in 2006 and 2007, respectively,
      to
      fulfill non-Brazilian demand from existing customers around the world and new
      customers in developing markets such as Chile, Argentina, and Nigeria. In total,
      Infosmart&#8217;s group sales for 8x DVDR discs are expected to be 92.1 million discs
      and 127.7 million discs in 2006 and 2007, respectively.</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">Infosmart&#8217;s
      sales of 16x DVDR discs are not expected to grow as much because the company
      will focus its efforts on generating incremental sales mainly to developing
      country markets, where 8x DVDR discs rather than 16x DVDR discs are expected
      to
      be mainstream in 2006 and 2007. Management projects that 16x DVDR disc sales
      will be approximately 39.6 million discs in 2006 and in 2007. Management
      anticipates that the company will ship around 1.9 million HD DVD discs in 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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Principal
      Executive Offices</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">Our
      principal executive office </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">located
      at </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5/F.,
      QPL
      Industrial Building, 126-140 Texaco Road, Tsuen Wan, Hong Kong</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
      China
      SAR and the telephone number is 852-</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2944-9905</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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>Filing
      Status</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">We
      file
      reports with the Securities and Exchange Commission ("SEC"). You can read and
      copy any materials we file with the Commission at its' Public Reference Room
      at
      450 Fifth Street, NW, Washington, DC 20549. You can obtain additional
      information about the operation of the Public Reference Room by calling the
      Commission at 1-800-SEC-0330. In addition, the Commission maintains an Internet
      site (www.sec.gov) that contains reports, proxy and information statements,
      and
      other information regarding issuers that file electronically with the
      Commission, including us.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div 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: 10pt; FONT-FAMILY: ">15</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 8pt; 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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>RISK
      FACTORS </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="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"><em>You
      should carefully consider the risks described below together with all of the
      other information included in this report before making an investment decision
      with regard to our securities. The statements contained in or incorporated
      into
      this offering that are not historic facts are forward-looking statements that
      are subject to risks and uncertainties that could cause actual results to differ
      materially from those set forth in or implied by forward-looking statements.
      If
      any of the following risks actually occurs, our business, financial condition
      or
      results of operations could be harmed. In that case, the trading price of our
      common stock could decline, and you may lose all or part of your investment.
      </em></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>Risks
      Relating to the Infosmart&#8217;s Business</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>The
      limited operating history of Infosmart makes evaluation of our business
      difficult. </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">The
      Company and its subsidiaries have limited operating histories. Infosmart was
      incorporated in the British Virgin Islands on August 23, 2005, and </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">IS
      Technology was founded in August of 2002. These limited operating histories
      and
      the unpredictability of our industry make it difficult for investors to evaluate
      our business and future operating results. An investor in the Company's
      securities must consider the risks, uncertainties and difficulties frequently
      encountered by companies in new and rapidly evolving markets. The risks and
      difficulties we face include challenges in accurate financial planning as a
      result of limited historical data and the uncertainties resulting from having
      had a relatively limited time period in which to implement and evaluate our
      business strategies as compared to older companies with longer operating
      histories. </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>Infosmart
      currently experiences customer concentration, which exposes it to all of the
      risks faced by Infosmart&#8217;s material customers. </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">Currently,
      84% of all of our revenues are derived from three customers. E-Net Distribution,
      Infosmart&#8217;s largest customer, contributes approximately 69% of Infosmart&#8217;s
      revenues. DVD Technology and NaSa Multimedia Technology each contribute
      approximately 6.5% and 8.7%, respectively, of Infosmart&#8217;s revenues. Until
      Infosmart secures additional customer relationships, it is possible that
      Infosmart may experience periods during which it will be highly dependent on
      one
      or a limited number of customers. Dependence on a single or a few customers
      will
      make it difficult to negotiate satisfactorily attractive prices for the
      Company&#8217;s products and will expose the Company to the risk of substantial losses
      if a single dominant customer stops conducting business with the Company.
      Moreover, the Company will be subject to the risks faced by these major
      customers to the extent that such risks impede such customer's ability to stay
      in business and make timely payments to 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 style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>We
      continually seek to develop new products and standards, which may not be widely
      adopted by consumers or, if adopted, may reduce demand by consumers for our
      older products. </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">We
      continually seek to develop new products and standards and enhance existing
      products and standards with higher memory capacities and other enhanced
      features. We cannot assure you that our new products and standards will gain
      market acceptance or that we will be successful in penetrating the new markets
      that we target. As we introduce new products and standards, it will take time
      for these new products and standards to be adopted, for consumers to accept
      and
      transition to these new products and standards and for significant sales to
      be
      generated from them, if this happens at all. Moreover, broad acceptance of
      new
      products and standards by consumers may reduce demand for our older products
      and
      standards. If this decreased demand is not offset by increased demand for our
      new products and standards, our results of operations could be harmed. We cannot
      assure you that any new products or standards we develop will be commercially
      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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Our
      future operating results may fluctuate and cause the price of our common stock
      to decline. </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">We
      expect
      that our revenues and operating results will continue to fluctuate significantly
      from quarter to quarter due to various factors, many of which are beyond our
      control. The factors that could cause our operating results to fluctuate
      include, but are not limited 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>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 45pt;">&#160;</td>
            <td style="width: 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">price
                competition;</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 style="width: 45pt;">
            </td>
            <td align="left" style="width: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></td>
            <td align="left">
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">general
                price increases by suppliers and manufacturers; </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 5.4pt">&#160;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="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: 10pt; 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>&#160;</div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 45pt;">&#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">our
                  ability to maintain and expand our customer relationships;&#160;<font id="TAB2" style="COLOR: black; LETTER-SPACING: 5.4pt" size="3">&#160;</font></font></div>
              </td>
            </tr>

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

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 45pt;">&#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
                introduction of new or enhanced products and strategic alliances
                by us and
                our competitors;</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">
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 45pt;">&#160;</td>
            <td style="width: 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>
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              <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
                success of our brand-building and marketing campaigns;&#160;<font id="TAB2" style="COLOR: black; LETTER-SPACING: 5.4pt" size="3">&#160;</font></font></div>
            </td>
          </tr>

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

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 45pt;">&#160;</td>
            <td style="width: 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"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">consumer
                acceptance of our products and general shifts in consumer behavior
                with
                respect to our industry;&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 5.4pt" size="3">&#160;</font></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: 45pt;">&#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">our
                ability to maintain, upgrade and develop our production facilities
                and
                infrastructure; </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: 45pt;">&#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">technical
                difficulties and system downtime; </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">
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 45pt;">&#160;</td>
            <td style="width: 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 valign="middle">
              <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
                amount and timing of operating costs and capital expenditures relating
                to
                expansion of our business, operations and infrastructure;&#160;<font id="TAB2" style="COLOR: black; LETTER-SPACING: 5.4pt" size="3">&#160;</font></font></div>
            </td>
          </tr>

      </table><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt"></font></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 45pt;">&#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 conditions as well as economic conditions specific to our
                industry; and </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">
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 45pt;">&#160;</td>
            <td style="width: 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">our
                ability to attract and retain qualified management and employees.<font id="TAB2" style="COLOR: black; LETTER-SPACING: 5.4pt" size="3">&#160;</font></font></div>
            </td>
          </tr>

      </table><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">If
      our
      revenues or operating results fall below the expectations of investors or
      securities analysts, the price of our common stock could significantly decline.
      </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>Our
      ability to manage our future growth is uncertain. </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">We
      are
      currently anticipating a period of growth as a result of our corporate growth
      strategy, which aims to, among other things, further develop our manufacturing
      capabilities, expand our product offerings, and reach new customers. In pursuing
      these objectives, the resulting strain on our managerial, operational, financial
      and other resources could be significant. Success in managing such expansion
      and
      growth will depend, in part, upon the ability of senior management to manage
      effectively. Any failure to manage the anticipated growth and expansion could
      have a material adverse effect on our business.</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>Increased
      product returns will decrease our revenues and impact profitability.
</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">We
      do not
      make allowances for product returns in our financial statements based on the
      fact that we have not had a material historical return rate. In order to keep
      product returns low, we continuously monitor product purchases and returns
      and
      may change our product offerings based on the rates of returns. If our actual
      product returns significantly increase, especially as we expand into new product
      categories, our revenues and profitability could decrease. Any changes in our
      policies related to product returns may result in customer dissatisfaction
      and
      fewer repeat customers. </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>Our
      growth and operating results could be impaired if we are unable to meet our
      future capital needs. </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">We
      may
      need to raise additional capital in the future 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>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 45pt;">&#160;</td>
            <td style="width: 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">fund
                more rapid expansion; </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: 45pt;">&#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">acquire
                or expand into new facilities; </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: 45pt;">&#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">maintain,
                enhance and further develop our manufacturing systems;
                </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: 45pt;">&#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">develop
                new product categories or enhanced
                services;</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: 45pt;">&#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">fund
                acquisitions; or</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: 45pt;">&#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">respond
                to competitive pressures.</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">If
      we
      raise additional funds by issuing equity or convertible debt securities, the
      percentage ownership of our stockholders will be diluted. Furthermore, any
      new
      securities could have rights, preferences and privileges senior to those of
      the
      Company's preferred shares&#160;and the common stock into which the Company's
      preferred shares are convertible. We currently do not have any commitments
      for
      additional financing. We cannot be certain that additional financing will be
      available when and to the extent required or that, if available, it will be
      on
      acceptable terms. If adequate funds are not available on acceptable terms,
      we
      may not be able to fund our expansion, develop or enhance our products or
      services or respond to competitive pressures. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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>The
      loss of key senior management personnel could negatively affect our
      business.</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
      depend
      on the continued services and performance of our senior management and other
      key
      personnel, particularly Andy Kwok, our Chief Executive Officer, Gavin Wong,
      our
      V.P. of Sales and Marketing and Sebastian Tseng, our Regional Director for
      South
      America and V.P. of Production and R&amp;D. The loss of any of our executive
      officers or other key employees could harm our business. Infosmart currently
      has
      employment agreements with its key personnel. Further, the Company expects
      that
      it will enter into employment agreements with certain of our executive officers
      and key employees upon completion of the Combination as described in more detail
      in the section of this Form 8-K Current Report titled &#8220;Employment Agreements&#8221;
Infosmart has a &#8220;key person&#8221; life insurance policy for Andy Kwok. </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: 10pt; 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: 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>Rapid
      changes in technology could adversely affect our business and hurt our
      competitive position.</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
      believe that our ability to increase sales by developing appealing, innovative
      products has an important role to play in our growth. However, it is extremely
      difficult to predict future demand in the rapidly changing storage media
      industry and develop new technologies to meet that demand. We may fail to
      develop and supply in a timely manner attractive, new products with innovative
      technologies for this industry and its markets. In the event that our management
      misreads the industry and market and/or is slow in developing innovative
      technologies on a cost competitive basis, actual earnings could differ
      significantly from our forecasts. At the same time, we may cease to be able
      to
      compete in markets, resulting in a significant adverse effect on our business
      results and growth prospects.</font><br></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"><strong>The
      use of technologies and intellectual properties for the production of all of
      our
      products are derived from two cooperation agreements and the failure to maintain
      the effectiveness of such agreements could substantially and adversely affect
      our business. </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">Our
      ability to produce our products depends on two cooperation agreements (the
      &#8220;Cooperation Agreements&#8221;) with two parties (&#8220;Cooperative Partners&#8221;) that have
      been granted licenses (the &#8220;Patent Licenses&#8221;) for the use of technologies and
      intellectual properties necessary for the production of all of our products.
      Such Cooperation Agreements currently expire on December 31, 2006, but Infosmart
      can renew both agreements. A failure to extend and otherwise maintain
      effectiveness of such agreements could prevent us from conducting our business
      of manufacturing our products and could substantially and adversely affect
      our
      business. </font><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>The
      patents required for manufacturing our DVD products are owned by multiple
      companies. Our failure to obtain all of the required patents to manufacture
      our
      products may interfere with our current or future product development and sales.
      </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">We
      have
      never conducted a comprehensive patent search relating to the technology we
      use
      in our products. The Patent Licenses held by the parties with whom we have
      Cooperation Agreements were obtained through a joint patent licensing program
      (the &#8220;DVDR Patent License Program&#8221;) that is administered by Koninklijke Philips
      Electronics, N.V. (&#8220;Philips&#8221;). Parties acquiring the patent licenses through
      this DVDR Patent License Program are allowed to use patents owned by companies
      including Philips, Sony, Pioneer and/or Hewlett Packard (or for which such
      companies have patent applications pending) that are essential for manufacturing
      DVDR products. However, there may be other issued or pending patents owned
      by
      third parties that are required for manufacturing our products for which our
      Cooperative Partners do not have a patent license. If so, we could incur
      substantial costs defending against patent infringement claims or we could
      even
      be blocked from selling our products. We cannot determine with certainty whether
      any other existing third party patents or the issuance of any new third party
      patents would require us or our Cooperative Partners to alter, or obtain
      licenses relating to, our processes or products, or implement alternative
      non-infringing approaches, all at a significant additional cost to the Company.
      There is no assurance that we or our Cooperative Partners will be able to obtain
      any such licenses on terms favorable to us, if at all, and obtaining and paying
      royalties on new licenses might materially increase our costs. Additionally,
      the
      fees in respect of existing licenses could increase materially in the future
      when these licenses are renewed, and such increase may have a significantly
      and
      adversely impact our 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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Infosmart&#8217;s
      inability to obtain its own Patent Licenses through the DVD Patent License
      Program prior to the expiration of the Cooperation Agreements could adversely
      affect its 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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Infosmart
      is planning to apply for its own Patent Licenses before the expiration of the
      two Cooperation Agreements within 90 days of the closing of the Combination.
      In
      the event that Infosmart is unable to obtain its own Patent Licenses, then
      it
      plans to exercise its option to renew Cooperation Agreements. However, if the
      Company is unable to obtain its own Patent Licenses then we may not be able
      to
      manufacture our products and this could significantly and adversely affect
      our
      business results and financial condition. Infosmart&#8217;s inability to either obtain
      its own Patent Licenses or to renew and maintain the effectiveness of the
      Cooperation Agreements could result in delays in product development or prevent
      us from selling our products until equivalent substitute technology can be
      identified, licensed and/or integrated or until we are able to substantially
      engineer our products to avoid infringing the rights of third parties. We might
      not be able to renegotiate agreements, be able to obtain necessary licenses
      in a
      timely manner, on acceptable terms, or at all, or be able to re-engineer our
      products successfully. Moreover, the loss of or inability to extend any of
      these
      Patent Licenses would increase the risk of infringement claims being made
      against us, which claims could have a material adverse effect on our
      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 id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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      <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"><strong>Infosmart
      may be unable to obtain its own new Hong Kong business customs license for
      its
      manufacturing facilities in Hong Kong</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
      Hong
      Kong government requires companies manufacturing DVDs to obtain a </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">business
      license for the manufacture of optical Disc/Stampers (the &#8220;HK Business
      Licenses&#8221;) from the Customs and Excise Department of Hong Kong.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      Infosmart currently manufacturers its products under HK Business Licenses held
      by its Cooperative Partners under the Cooperation Agreement. In addition, the
      Company plans to obtain its own HK Business Licenses for its Hong Kong factories
      within 90 days of the Closing of the Offering. However, if the Company is unable
      to obtain such bu</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">siness
      licenses and is also unable to extend the Cooperation Agreements beyond December
      31, 2006, then production of our products at Infosmart&#8217;s Hong Kong factories may
      be halted, causing substantial losses to the Company.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Our
      business may suffer if we are sued for infringing upon the intellectual property
      rights of third parties. </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">There
      may
      be cases where it is alleged that the Company&#8217;s products infringe on the
      intellectual property rights of third parties. As a result, the Company may
      suffer damages or may be sued for damages. In either case, settlement
      negotiations and legal procedures would be inevitable and could be expected
      to
      be lengthy and expensive. If the Company&#8217;s assertions are not accepted in such
      disputes, it may have to pay damages and royalties and suffer losses such as
      the
      loss of markets. The failure to prevent infringement on the rights of others
      could have a materially adverse effect on the Company&#8217;s business development and
      business results and financial condition. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>We
      are dependent on certain raw materials and other products, and our business
      will
      suffer if we are unable to procure such materials and products.
</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">Our
      manufacturing systems are premised on deliveries of raw materials and other
      supplies in adequate quality and quantity in a timely manner from many external
      suppliers. In new product development, the Company may rely on certain
      irreplaceable suppliers for materials. Because of this, there may be cases
      where
      supplies of raw materials and other products to the Company are interrupted
      by:
      an accident or some other event at a supplier; supply is suspended due to
      quality or other issues; or there is a shortage of or instability in supply
      due
      to a rapid increase in demand for finished products that use certain materials
      and products. If any of these situations becomes protracted, the Company may
      have difficulty finding substitutes in a timely manner from other suppliers,
      which could have a significant, adverse effect on the Company&#8217;s production and
      prevent it from fulfilling its responsibilities to supply products to its
      customers. Furthermore, if an imbalance arises in the supply-demand equation,
      there could be a spike in the price of raw materials. In the event of these
      or
      other similar occurrences, there could be a material adverse effect on the
      Company&#8217;s business results and financial condition. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>We
      compete in a highly competitive industry where some of our competitors are
      larger and have more resources than us.</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">We
      operate in a highly competitive environment. Our competitors are both larger
      and
      smaller than Infosmart in terms of resources and market share. The marketplaces
      in which Infosmart operates are generally characterized by rapid technological
      change, frequent new product introductions and declining prices. In these highly
      competitive markets, the Company&#8217;s success will depend to a significant extent
      on its ability to continue to develop and introduce differentiated and
      innovative products and customer solutions successfully on a timely basis.
      The
      success of the Company&#8217;s product offerings is dependent on several factors
      including understanding customer needs, strong digital technology,
      differentiation from competitive offerings, market acceptance and lower costs.
      Although management believes that it can take the necessary steps to meet the
      competitive challenges of these marketplaces, no assurance can be given with
      regard to the Company&#8217;s ability to take these steps, the actions of competitors,
      some of which will have greater resources than the Company, or the pace of
      technological changes.</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>Technology
      in our industry evolves rapidly, potentially causing our products to become
      obsolete, and we must continue to enhance existing systems and develop new
      systems or we will lose sales.</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">Rapid
      technological advances, rapidly changing customer requirements and fluctuations
      in demand characterize the current market for our products. Further, there
      are
      alternative data storage media and additional media is under development,
      including high capacity hard drives, new CD-R/DVD-R technologies, file servers
      accessible through computer networks and the Internet. Our existing and
      development-stage products may become obsolete if our competitors introduce
      newer or more appealing technologies. If these technologies are patented or
      proprietary to our competitors, we may not be able to access these technologies.
      We believe that we must continue to innovate and anticipate advances in the
      storage media industry in order to remain competitive. If we fail to anticipate
      or respond to technological developments or customer requirements, or if we
      are
      significantly delayed in developing and introducing products, our business
      will
      suffer lost sales.</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>&#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"><strong>Our
      market is becoming more competitive. Competition may result in price reductions,
      lower gross profits and loss of market share.</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">The
      storage media industry is becoming more competitive and we face the potential
      for increased competition in developing and selling our products. Our
      competitors may have or could develop or acquire significant marketing,
      financial, development and personnel resources. We cannot assure you that we
      will be able to compete successfully against our current or future competitors.
      The storage media industry has increased visibility, which may lead to large,
      well-known, well-financed companies entering into this market. Increased
      competition from manufacturers of systems or consumable supplies may result
      in
      price reductions, lower gross profit margins, increased discounts to
      distribution and loss of market share and could require increased spending
      by us
      on research and development, sales and marketing and customer support.
</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>If
      Infosmart is unable to compete effectively with existing or new competitors,
      the
      loss of its competitive position could result in price reductions, fewer
      customer orders, reduced revenues, reduced margins, reduced levels of
      profitability and loss of market share. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </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">Infosmart
      has several competitors, which include the largest DVDR manufacturers in the
      world. Certain of these competitors compete aggressively on price and seek
      to
      maintain very low cost structures. Some of these competitors are seeking to
      increase their market share, which creates increased pressure, including pricing
      pressure, within the market. In addition, certain of the competitors, including
      CMC and Ritek, have financial and human resources that are substantially greater
      than those of Infosmart, which increases the competitive pressures Infosmart
      faces. Customers make buying decisions based on many factors, including among
      other things, new product and service offerings and features; product
      performance and quality; ease of doing business; a vendor&#8217;s ability to adapt to
      customers&#8217; changing requirements; responsiveness to shifts in the marketplace;
      business model; contractual terms and conditions; vendor reputation and vendor
      viability. As competition increases, each factor on which Infosmart competes
      becomes more important and the lack of competitive advantage with respect to
      one
      or more of these factors could lead to a loss of competitive position, resulting
      in fewer customer orders, reduced revenues, reduced margins, reduced levels
      of
      profitability and loss of market share. Infosmart expects competitive pressure
      to remain intense.</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>The
      products Infosmart makes have a life cycle. If Infosmart is unable to
      successfully time market entry and exit and manage its inventory, it may fail
      to
      enter profitable markets or exit unprofitable markets. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </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">We
      operate in a highly competitive, quickly changing environment. Infosmart is
      preparing for HD DVD production. Thirty two (32) of Infosmart&#8217;s forty four (44)
      production lines can be upgraded to HD DVD production at a time of management&#8217;s
      choosing. However, if the market turns in favor of Blu-Ray, the Company will
      have to purchase new equipment to produce Blu-Ray discs, and thus the company&#8217;s
      business and operating results could be adversely affected. If strong
      competitors challenge Infosmart in Brazil and other key markets, the Company
      will need to quickly develop an adequate competitive response. If the Company
      fails to accurately anticipate market and technological trends its business
      and
      operating results could be materially and adversely affected. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </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">We
      must
      also be able to manufacture the products at acceptable costs. This requires
      us
      to be able to accurately forecast customer demand so that it can procure the
      appropriate inputs at optimal costs. We must also try to reduce the levels
      of
      older product inventories to minimize inventory write-offs. If the Company
      has
      excess inventory, it may be necessary to reduce its prices and write down
      inventory, which could result in lower gross margins. Additionally, the
      Company&#8217;s customers may delay orders for existing 8x or 16x products in
      anticipation of new HD DVD or Blu-Ray product introductions. As a result, the
      Company may decide to adjust prices of existing products during this process
      to
      try to increase customer demand for these products. The Company&#8217;s future
      operating results would be materially and adversely affected if such pricing
      adjustments were to occur and the Company was unable to mitigate the resulting
      margin pressure by maintaining a favorable mix of products, or if the Company
      was unsuccessful in achieving input cost reductions, operating efficiencies
      and
      increasing sales volumes. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </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">If
      the
      Company is unable to timely develop, manufacture, and introduce new products
      in
      sufficient quantity to meet customer demand at acceptable costs, or if Company
      is unable to correctly anticipate customer demand for the Company&#8217;s new and
      existing products, the Company&#8217;s business and operating results could be
      materially adversely affected.</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>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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        </div>
      </div>
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      <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"><strong>If
      our products fail to compete successfully with other existing or newly-developed
      products for the storage media industry, our business will
      suffer.</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">The
      success of our products depends upon end users choosing our DVDR technology
      for
      their storage media needs. However, alternative data storage media exist, such
      as high capacity hard drives, new CD-R/DVDR technologies, file servers
      accessible through computer networks and the Internet, and additional media
      is
      under development. If end users perceive any technology that is competing with
      ours as more reliable, higher performing, less expensive or having other
      advantages over our technology, the demand for our DVDR products could decrease.
      Further, some of our competitors may make strategic acquisitions or establish
      cooperative relationships with suppliers or companies that produce complementary
      products such as cameras, computer equipment, software or biometric
      applications. Competition from other storage media is likely to increase. If
      our
      products do not compete successfully with existing or new competitive products,
      our business will suffer. </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>Our
      products may have manufacturing or design defects that we discover after
      shipment, which could negatively affect our revenues, increase our costs and
      harm our reputation.</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">Our
      products may contain undetected and unexpected defects, errors or failures.
      If
      these product defects are substantial, the result could be product recalls,
      an
      increased amount of product returns, loss of market acceptance and damage to
      our
      reputation, all of which could increase our costs and cause us to lose sales.
      We
      do not carry general commercial liability insurance covering our products.
      In
      addition, Infosmart is preparing to launch production of HD DVD discs in 2007.
      HD DVD production will require the company to master new production techniques
      and modify machinery and equipment. It is possible that the Company may fail
      to
      achieve mastery of these new techniques and production yields could suffer
      as a
      result.</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>The
      development of digital distribution alternatives, including the copying and
      distribution of music and video and other electronic data files could lessen
      the
      demand for our products.</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">We
      are
      dependent on the continued viability and growth of physical distribution of
      music, video and other electronic data through recordable media. Alternative
      distribution channels and methods, both authorized and unauthorized, for
      delivering music, video and other electronic data may erode our volume of sales
      and the pricing of its products and services. The growth of these alternatives
      is driven by advances in technology that allow for the transfer and downloading
      of music, video and other electronic data files from the Internet. The
      proliferation of this copying, use and distribution of such files is supported
      by the increasing availability and decreasing price of new technologies, such
      as
      personal video recorders, DVD burners, portable MP3 music and video players,
      widespread access to the Internet, and the increasing number of peer-to-peer
      digital distribution services that facilitate file transfers and downloading.
      We
      expect that file sharing and downloading, both legal and illegal, will continue
      to exert downward pressure on the demand for traditional DVDRs. As current
      technologies and delivery systems improve, the digital transfer and downloading
      of music, video and other electronic data files will likely become more
      widespread. As the speed and quality with which music, video and other
      electronic data files can be transferred and downloaded improves, file sharing
      and downloading may in the future exert significant downward pressure on the
      demand for DVDRs. In addition, our business faces pressure from the emerging
      distribution alternatives, like video on demand (&#8220;VOD&#8221;) and personal digital
      video recorders. As substantially all of our revenues are derived from the
      sale
      of DVDRs, increased file sharing, downloading and piracy or the growth of other
      alternative distribution channels and methods, could materially adversely affect
      its business, financial condition and results of operations. </font></div>
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      Company&#8217;s revenues, cash flows and operating results may fluctuate for a number
      of reasons. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
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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">Future
      operating results and cash flows will continue to be subject to quarterly
      fluctuations based on a wide variety of factors, including seasonality. Although
      Infosmart&#8217;s sales and other operating results can be influenced by a number of
      factors and historical results are not necessarily indicative of future results,
      Infosmart&#8217;s sequential quarterly operating results generally fluctuate downward
      in the fourth quarter of each fiscal year when compared with the immediately
      preceding quarter. For example, the Company&#8217;s first calendar quarter is modestly
      affected by the Chinese New Year.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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>A
      significant portion of the revenues will depend on the success of the Company&#8217;s
      new venture in Brazil.</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">A
      significant portion of the Company&#8217;s revenues will depend on the success of the
      Infosmart&#8217;s new Brazilian venture. Infosmart has no prior manufacturing and
      distribution experience in Brazil, and will rely on the local knowledge of
      its
      Brazilian joint venture partner and the general knowledge of the South American
      marketplace of its regional director Sebastian Tseng. The Company&#8217;s results
      could suffer should its relationships with either of these two parties
      deteriorate in the early months of the Brazilian venture.</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>We
      are at risk of losing our significant investment in Brazil if we are unable
      to
      obtain the intellectual property licenses required for our Discobras
      manufacturing facility.</strong></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">The
      owners of the technologies and intellectual property necessary for the
      production of our products require that we obtain separate Patent Licenses
      for
      the use of intellectual property in our new DVDR manufacturing facility in
      Brazil. The Company plans to apply for the Patent Licenses for use at the
      Discobras manufacturing facility in 2006. However, if there is a substantial
      delay in obtaining approval for our use of the Patent Licenses, then we may
      be
      unable to manufacture a sufficient amount of our products to fill our sales
      orders, and this could cause the Company to lose substantial revenues. Further,
      in the event we are unable to obtain the Patent Licenses, then we may not be
      able to manufacture our products in Brazil, thus placing the Company at risk
      of
      losing its significant investment in the Brazilian venture.</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>Past
      activities of Cyber Merchants and its affiliates may lead to future liability
      for the combined companies.</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">Prior
      to
      the Combination, Cyber engaged in businesses unrelated to that of the Company&#8217;s
      new operations. Any liabilities relating to such prior business against which
      Infosmart is not completely indemnified may have a material adverse effect
      on
      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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Risks
      Relating To Doing Business in Hong Kong and Brazil</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"><strong>Adverse
      changes in economic and political policies of the People&#8217;s Republic of China
      government could have a material adverse effect on the overall economic growth
      of Hong Kong, which could adversely affect our business. </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">Although,
      as described above, we are planning a new venture in Brazil, substantially
      all
      of our business operations are currently conducted in Hong Kong, a special
      administrative region in the People&#8217;s Republic of China (&#8220;PRC&#8221;). Accordingly,
      our results of operations, financial condition and prospects are subject to
      a
      significant degree to economic, political and legal developments in Hong Kong
      and the PRC. The PRC&#8217;s economy differs from the economies of most developed
      countries in many respects, including with respect to the amount of government
      involvement, level of development, growth rate, control of foreign exchange
      and
      allocation of resources. While the PRC economy has experienced significant
      growth in the past 20 years, growth has been uneven across different regions
      and
      among various economic sectors of China. The PRC government has implemented
      various measures to encourage economic development and guide the allocation
      of
      resources. Some of these measures benefit the overall PRC economy, but may
      also
      have a negative effect on us. </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">&#160;&#160;</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"><strong>You
      may experience difficulties in effecting service of legal process, enforcing
      foreign judgments or bringing original actions in Hong Kong or China based
      on
      United States or other foreign laws against us, our management or the experts
      named in the prospectus. </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
      currently conduct substantially all of our operations in Hong Kong and
      substantially all of our assets are located in Hong Kong. In addition, all
      of
      our senior executive officers reside within Hong Kong. As a result, it may
      not
      be possible to effect service of process within the United States or elsewhere
      outside Hong Kong upon our senior executive officers, including with respect
      to
      matters arising under U.S. federal securities laws or applicable state
      securities laws. Moreover, neither the PRC nor Hong Kong have treaties with
      the
      United States or many other countries providing for the reciprocal recognition
      and enforcement of judgment of courts.&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Fluctuation
      in the value of the Hong Kong Dollar may have a material adverse effect on
      your
      investment. </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">The
      value
      of the Hong Kong dollar against the U.S. dollar and other currencies may
      fluctuate and is affected by, among other things, changes in political and
      economic conditions. Although the exchange rate between the Hong Kong dollar
      and
      the U.S. dollar has been effectively pegged, there can be no assurance that
      the
      Hong Kong dollar will remain pegged, to the U.S. dollar, especially in light
      of
      the significant international pressure on the Chinese government to permit
      the
      free floatation of the RMB and the Hong Kong dollar, which could result in
      an
      appreciation of RMB or the Hong Kong dollar against the U.S. dollar. Our
      revenues and costs are mostly denominated in Hong Kong dollars, while a
      significant portion of our financial assets are also denominated in Hong Kong
      dollars. Any significant revaluation of the Hong Kong dollar may materially
      and
      adversely affect our cash flows, revenues, earnings and financial position,
      and
      the value of, and any dividends payable on, our stock in U.S. dollars. For
      example, an appreciation of the Hong Kong dollar against the U.S. dollar would
      make any new Hong Kong dollar denominated investments or expenditures more
      costly to us, to the extent that we need to convert U.S. dollars into Hong
      Kong
      dollars for such purposes. An appreciation of the Hong Kong dollar against
      the
      U.S. dollar would also result in foreign currency translation losses for
      financial reporting purposes when we translate our U.S. dollar denominated
      financial assets into the Hong Kong dollar, as the Hong Kong dollar is our
      reporting currency. </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">
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">22</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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        </div>
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        <div id="GLHDR" style="WIDTH: 100%" align="right">
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      <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"><strong>We
      face risks related to health epidemics and other outbreaks.
</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">Our
      business could be adversely affected by the effects of SARS or another epidemic
      or outbreak. China and Hong Kong reported a number of cases of SARS in April
      2004. Any prolonged recurrence of SARS or other adverse public health
      developments in China or in Hong Kong may have a material adverse effect on
      our
      business operations. For instance, health or other government regulations
      adopted in response may require temporary closure of our production facilities
      or of our offices. Such closures would severely disrupt our business operations
      and adversely affect our results of operations. We have not adopted any written
      preventive measures or contingency plans to combat any future outbreak of SARS
      or any other epidemic.</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>Changes
      in Hong Kong or Brazil&#8217;s political or economic situation could harm us and the
      Company&#8217;s operational results.</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">In
      addition to our operations in Hong Kong, we are currently establishing a
      production facility and a sales base in Brazil. Economic reforms adopted by
      the
      Chinese or Brazilian governments have had positive effects on the economic
      development of these countries, but the governments could change these economic
      reforms or any of the legal systems at any time. This could either benefit
      or
      damage the Company&#8217;s operations and profitability. Some of the things that could
      have this effect are:</font></div>
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    <div>
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                of government involvement in the
                economy;</font></div>
            </td>
          </tr>

      </table>
    </div>
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          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 27pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Control
                of foreign exchange;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
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          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 27pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Methods
                of allocating resources;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
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          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 27pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Balance
                of payments position;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
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          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 27pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
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            </td>
          </tr>

      </table>
    </div>
    <div>
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          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 27pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">International
                conflict.</font></div>
            </td>
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      </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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      of
      the foregoing events or other unforeseen consequences of public health problems
      could damage the Company&#8217;s operations.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>The
      Brazilian government has historically exercised, and continues to exercise,
      significant influence over the Brazilian economy. Brazilian political and
      economic conditions will have a direct impact on our business and the market
      price of our securities. </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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Brazilian government frequently intervenes in the Brazilian economy and
      occasionally makes substantial changes in policy, as often occurs in other
      emerging economies. The Brazilian government&#8217;s actions to control inflation and
      carry out other policies have in the past involved wage and price controls,
      currency devaluations, capital controls and limits on imports, among other
      things. Our business, financial condition and results of operations may be
      adversely affected by factors in Brazil including: </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 27pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Currency
                volatility;</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: 27pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Inflation
                acceleration;</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: 27pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Monetary
                policy and interest rate increases;</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: 27pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fiscal
                policy and tax changes;</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: 27pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">International
                trade policy including tariff and non-tariff trade
                barriers;</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: 27pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Foreign
                exchange controls;</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: 27pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Energy
                shortages; 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: 27pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                political, social and economic developments in or affecting
                Brazil.</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"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      2005,
      government figures, legislators and political party officials, especially those
      of the President&#8217;s party, have been the subject of a variety of allegations of
      unethical or illegal conduct. These accusations, which are currently being
      investigated by the Brazilian Congress, involve campaign financing and election
      law violations, and influencing of government officials and Congressmen in
      exchange for political support. Several members of the President&#8217;s party and of
      the federal government, including the President&#8217;s chief of staff, have resigned.
      We cannot predict what effect these accusations and investigations may have
      on
      the Brazilian economy.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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>Inflation
      and government measures to curb inflation may contribute significantly to
      economic uncertainty in Brazil and to heightened volatility in the Brazilian
      securities markets and, consequently, may adversely affect our business in
      Brazil. </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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Brazil
      has in the past experienced extremely high rates of inflation, with annual
      rates
      of inflation reaching as high as 2,567% in 1993 (as measured by the </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>&#205;ndice
      Geral de Pre&#231;os do Mercado</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      published by </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Funda&#231;&#227;o
      Get&#250;lio Vargas</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
      or
      IGP-M Index). More recently, Brazil&#8217;s rates of inflation were 10.4% in 2001,
      25.3% in 2002, 8.7% in 2003, 12.4% in 2004 and 0.2% in the nine months ended
      September&#160;30, 2005 (as measured by the IGP-M Index). Inflation,
      governmental measures to combat inflation and public speculation about possible
      future actions have in the past had significant negative effects on the
      Brazilian economy and have contributed to economic uncertainty in Brazil. If
      Brazil experiences substantial inflation in the future, our costs may increase
      and our operating and net margins may decrease. Inflationary pressures may
      also
      lead to further government intervention in the economy, which could involve
      the
      introduction of government policies that may adversely affect the overall
      performance of the Brazilian economy.</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: 10pt; FONT-FAMILY: ">23</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </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"><strong>Restrictions
      on currency exchange may limit the Company&#8217;s ability to receive and use the
      Company&#8217;s revenues effectively</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">If
      we
      successfully establish our business operations in Brazil, some of the Company&#8217;s
      revenues will be settled in the Brazilian Real. Any future restrictions on
      currency exchanges may limit the Company&#8217;s ability to use revenue generated in
      Reals to fund any future business activities outside Brazil or to make dividend
      or other payments in U.S. dollars. Currently, the Company can legally exchange
      and transfer out of Brazil after-tax profits of up to the Company&#8217;s total
      investment in its Brazilian subsidiary Discobras, which we expect to be
      approximately $8 million for 2006 and an additional $6 million for
      2007.</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"><strong>The
      value of the Company&#8217;s securities will be affected by the foreign exchange rate
      between the U.S. dollar, the Hong Kong dollar and the
      Real.</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
      value
      of the Company&#8217;s common stock will be affected by the foreign exchange rate
      between U.S. and Hong Kong dollars and Real, and between those currencies and
      other currencies in which the Company&#8217;s sales may be denominated. For example,
      to the extent that the Company needs to convert U.S. or Hong Kong dollars into
      Real for the Company&#8217;s operational needs and should the Real appreciate against
      the U.S. dollar at that time, the Company&#8217;s financial position, the business of
      the Company, and the price of the Company&#8217;s common stock may be harmed.
      Conversely, if the Company decides to convert the Company&#8217;s Real into U.S. or
      Hong Kong dollars for the purpose of declaring dividends on the Company&#8217;s common
      stock or for other business purposes and the U.S. dollar appreciates against
      the
      Real, the U.S. or Hong Kong dollar equivalent of the Company&#8217;s earnings from the
      Company&#8217;s subsidiaries in Hong Kong would be reduced. The Company will engage in
      hedging activities to manage our financial exposure related to currency exchange
      fluctuation. In these hedging activities, we might use fixed-price, forward,
      futures, financial swaps and option contracts traded in the over-the-counter
      markets or on exchanges, as well as long-term structured transactions when
      feasible.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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>We
      will depend on Brazil&#8217;s foreign investment incentive programs, which provide
      reductions in taxation or exemptions from taxation for our operations in Brazil.
      The loss of the tax benefits from these incentive programs may substantially
      affect our earnings.</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">Under
      the
      State of Bahia&#8217;s investment incentive program, our Brazilian subsidiary,
      Discobras, has been granted a reduction in the Value Added Tax (&#8220;VAT&#8221;) it is
      required to pay for products. Discobras pays 2.28% only, as compared to VAT
      of
      12% in Salvador, or 18% in S&#227;o Paulo. This VAT reduction will be available to us
      until June 2016. We will also avail ourselves of an incentive program for
      foreign investment which exempts Discobras from paying Brazil&#8217;s ICMS taxes on
      raw materials it imports for production in Brazil and create substantial tax
      savings for the Company. This tax exemption will last through</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>&#160;</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">June</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>&#160;</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2016.
      In
      the event that the VAT reduction program is no longer available to us or we
      are
      unable to extend the ICMS tax-exemption, our after-tax earnings would decline
      by
      the amount of the tax benefits, which may be substantial.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Risks
      Relating to this Offering and Ownership of Our
      Securities</strong></font><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Your
      rights with respect to ownership of the&#160;Company's Series A and Series B
      Preferred Shares&#160;are set forth in the Certificate of Determination of
      Rights, Preferences, Privileges and Restrictions for the Series A and Series
      B
      Preferred Stock and form of Warrants and such documents should be reviewed
      carefully with your legal counsel. </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">Your
      rights with respect to ownership of the Company's Series A and Series B
      Preferred Shares&#160; are set forth in the Certificate of Determination of
      Rights, Preferences, Privileges and Restrictions for the&#160;Series A and
      Series B Preferred Stock that is attached hereto as Exhibits&#160;3.3 and
      3.4&#160;and in the form of Warrant attached as Exhibit 10.17 to this Form 8-K.
      Such documents contain important provisions that provide you with rights,
      limitations and obligations and should be reviewed carefully with your legal
      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 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: 10pt; FONT-FAMILY: ">24</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div 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">
      <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>Upon
        closing of the&#160;Exchange&#160;and the Financing, we will operate as a public
        company subject to evolving corporate governance and public disclosure
        regulations that may result in additional expenses and continuing uncertainty
        regarding the application of such regulations.</strong></font></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">Changing
      laws, regulations and standards relating to corporate governance and public
      disclosure, including the Sarbanes-Oxley Act of 2002 and related rules and
      regulations, are creating uncertainty for public companies. We are presently
      evaluating and monitoring developments with respect to new and proposed rules
      and cannot predict or estimate the amount of the additional compliance costs
      we
      may incur or the timing of such costs. These new or changed laws, regulations
      and standards are subject to varying interpretations, in many cases due to
      their
      lack of specificity, and as a result, their application in practice may evolve
      over time as new guidance is provided by courts and regulatory and governing
      bodies. This could result in continuing uncertainty regarding compliance matters
      and higher costs necessitated by ongoing revisions to disclosure and governance
      practices. Maintaining appropriate standards of corporate governance and public
      disclosure may result in increased general and administrative expenses and
      a
      diversion of management time and attention from revenue-generating activities
      to
      compliance activities. In addition, if we fail to comply with new or changed
      laws, regulations and standards, regulatory authorities may initiate legal
      proceedings against us and our business and our reputation may be harmed.
</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"><strong>Following
      the&#160;Exchange and the Financing, the shares of the Company may have limited
      liquidity. </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">Following
      the&#160;Exchange and the Financing, a substantial portion of the Company&#8217;s
      shares of common stock will be subject to registration, and will be closely
      held
      by certain institutional and insider investors. Consequently, the public float
      for the shares may be highly limited. As a result, should you wish to convert
      the Series B Preferred Stock and sell your shares into the open market you
      may
      encounter difficulty selling large blocks of your shares or obtaining a suitable
      price at which to sell your shares. </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"><strong>The&#160;Series
      B&#160;Preferred Shares&#160;sold by us in the Financing&#160;initially will not
      be registered and you will not be able to sell these&#160;preferred shares or
      the shares of common stock underlying the&#160;preferred shares&#160;of the
      Company you obtain in the&#160;Financing until such shares are registered. There
      can be no assurance that we will be able to register the shares of the Company
      in a timely manner.</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">None
      of
      the Series B&#160;Preferred Shares ("Securities"), the Cyber Merchants shares of
      common stock underlying the Securities, nor the shares of the Company&#8217;s common
      stock issued to the holders of Infosmart&#8217;s capital stock in the&#160;Exchange
      will be registered or freely tradable immediately after the closing of
      the&#160;Financing and Exchange. We will use our reasonable best efforts to
      register the shares of the Company&#8217;s common stock underlying the Securities that
      you obtain pursuant to the Offering in the time frame laid out in the
      Registration Rights Agreement that will be entered into by you and us in
      connection with your investment. However, there can be no assurance that we
      will
      be able to meet the time frame laid out in the Registration Rights Agreement.
      Our inability to meet such registration requirements will force you to hold
      the
      Securities acquired in the&#160;Financing for a substantial period of time
      without having liquidity for those Securities or the shares of the Company&#8217;s
      common stock underlying the Securities. </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"><strong>Our
      stock price may be volatile, which may result in losses to our shareholders.
      </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">The
      stock
      markets have experienced significant price and trading volume fluctuations,
      and
      the market prices of companies quoted on the Over-The-Counter Bulletin Board,
      the stock market in which shares of the Company&#8217;s common stock will be quoted,
      generally have been very volatile and have experienced sharp share price and
      trading volume changes. The trading price of our common stock is likely to
      be
      volatile and could fluctuate widely in response to many of the following
      factors, some of which are beyond our control: </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;<strong>&#160;&#160;</strong></font></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">variations
                in our operating results; </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>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;<strong>&#160;&#160;</strong></font></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">announcements
                of technological innovations, new services or product lines by us
                or our
                competitors; </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>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;<strong>&#160;&#160;</strong></font></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">changes
                in expectations of our future financial performance, including financial
                estimates by securities analysts and investors;
</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>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;<strong>&#160;&#160;</strong></font></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">changes
                in operating and stock price performance of other companies in our
                industry; </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>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;&#160;</font></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">additions
                or departures of key personnel; and
</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>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></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">future
                sales of our common stock. </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">Domestic
      and international stock markets often experience significant price and volume
      fluctuations. These fluctuations, as well as general economic and political
      conditions unrelated to our performance, may adversely affect the price of
      our
      common stock. In particular, following initial public offerings, the market
      prices for stocks of companies often reach levels that bear no established
      relationship to the operating performance of these companies. These market
      prices are generally not sustainable and could vary widely. In the past,
      following periods of volatility in the market price of a public company&#8217;s
      securities, securities class action litigation has often been
      initiated.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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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: 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"><strong>We
      have broad discretion as to the use of proceeds from this&#160;Financing and may
      not use the proceeds effectively. </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">Our
      management team will retain broad discretion as to the allocation and timing
      of
      the use of proceeds from the&#160;Financing and may spend these proceeds in ways
      with which our shareholders may not agree. The failure of our management to
      apply these funds effectively could result in unfavorable returns and
      uncertainty about our prospects, each of which could cause the price of our
      common stock to decline. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>We
      anticipate that upon the completion of the&#160;Financing and Exchange, our
      officers and directors will own a substantial portion of our outstanding common
      stock, which will enable them to influence many significant corporate actions
      and in certain circumstances may prevent a change in control that would
      otherwise be beneficial to our shareholders. </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">Upon
      completion of the&#160;Financing and Exchange, our directors and executive
      officers will control approximately 64% of our outstanding shares of common
      stock. Specifically, Andy Kwok, Infosmart&#8217;s Chief Executive Officer and Pauline
      Sze, Infosmart&#8217;s Chief Financial Officer, will control approximately 64% of the
      outstanding shares of common stock of the Company upon completion of
      the&#160;Financing and the Exchange. These stockholders, acting together, could
      have a substantial impact on matters requiring the vote of the shareholders,
      including the election of our directors and most of our corporate actions.
      This
      control could delay, defer or prevent others from initiating a potential merger,
      takeover or other change in our control, even if these actions would benefit
      our
      shareholders and us. This control could adversely affect the voting and other
      rights of our other shareholders and could depress the market price of our
      common stock. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>A
      large number of additional shares may be sold into the public market in the
      near
      future, which may cause the market price of our common stock to decline
      significantly, even if our business is doing well. </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">Sales
      of
      a substantial amount of common stock in the public market, or the perception
      that these sales may occur, could adversely affect the market price of our
      common stock. After the Financing and the conversion of our Series A Preferred
      Stock and our Series B Preferred Stock, we will have approximately 159,000,745
      shares of common stock outstanding. This includes 116,721,360 shares to be
      received by the shareholders of Infosmart in the Combination after the
      conversion of the Series A Preferred Stock. As restrictions on resale of such
      additional shares end, the market price could drop significantly if the holders
      of these restricted shares sell them or are perceived by the market as intending
      to sell them. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>We
      will incur increased costs and compliance risks as a result of becoming a public
      company. </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">As
      a
      public company, we will incur significant legal, accounting and other expenses
      that Infosmart did not incur as a private company prior to the&#160;Financing
      and Exchange. We will incur costs associated with our public company reporting
      requirements. We also anticipate that we will incur costs associated with
      recently adopted corporate governance requirements, including certain
      requirements under the Sarbanes-Oxley Act of 2002, as well as new rules
      implemented by the SEC and the National Association of Securities Dealers
      (&#8220;NASD&#8221;). We expect these rules and regulations, in particular Section 404 of
      the Sarbanes-Oxley Act of 2002, to significantly increase our legal and
      financial compliance costs and to make some activities more time-consuming
      and
      costly. Like many smaller public companies, we face a significant impact from
      required compliance with Section 404 of the Sarbanes-Oxley Act of 2002. Section
      404 requires management of public companies to evaluate the effectiveness of
      internal control over financial reporting and the independent auditors to attest
      to the effectiveness of such internal controls and the evaluation performed
      by
      management. The SEC has adopted rules implementing Section 404 for public
      companies as well as disclosure requirements. The Public Company Accounting
      Oversight Board, or PCAOB, has adopted documentation and attestation standards
      that the independent auditors must follow in conducting its attestation under
      Section 404. We are currently preparing for compliance with Section 404;
      however, there can be no assurance that we will be able to effectively meet
      all
      of the requirements of Section 404 as currently known to us in the currently
      mandated timeframe. Any failure to implement effectively new or improved
      internal controls, or to resolve difficulties encountered in their
      implementation, could harm our operating results, cause us to fail to meet
      reporting obligations or result in management being required to give a qualified
      assessment of our internal controls over financial reporting or our independent
      auditors providing an adverse opinion regarding management&#8217;s assessment. Any
      such result could cause investors to lose confidence in our reported financial
      information, which could have a material adverse effect on our stock price.
      </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">&#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
      also
      expect these new rules and regulations may make it more difficult and more
      expensive for us to obtain director and officer liability insurance and we
      may
      be required to accept reduced policy limits and coverage or incur substantially
      higher costs to obtain the same or similar coverage. As a result, it may be
      more
      difficult for us to attract and retain qualified individuals to serve on our
      Board of Directors or as executive officers. We are currently evaluating and
      monitoring developments with respect to these new rules, and we cannot predict
      or estimate the amount of additional costs we may incur or the timing of such
      costs. </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"><strong>If
      we fail to maintain the adequacy of our internal controls, our ability to
      provide accurate financial statements and comply with the requirements of the
      Sarbanes-Oxley Act of 2002 could be impaired, which could cause our stock price
      to decrease substantially.</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">Since,
      prior to the Financing, Infosmart operated as a private company without public
      reporting obligations, Infosmart has committed limited personnel and resources
      to the development of the external reporting and compliance obligations that
      would be required of a public company. Recently, Infosmart has taken measures
      to
      address and improve our financial reporting and compliance capabilities and
      we
      are in the process of instituting changes to satisfy our obligations in
      connection with joining a public company, when and as such requirements become
      applicable to us. Prior to taking these measures, we did not believe we had
      the
      resources and capabilities to do so. We plan to obtain additional financial
      and
      accounting resources to support and enhance our ability to meet the requirements
      of being a public company. We will need to continue to improve our financial
      and
      managerial controls, reporting systems and procedures, and documentation
      thereof. If our financial and managerial controls, reporting systems or
      procedures fail, we may not be able to provide accurate financial statements
      on
      a timely basis or comply with the Sarbanes-Oxley Act of 2002 as it applies
      to
      us. Any failure of our internal controls or our ability to provide accurate
      financial statements could cause the trading price of our common stock to
      decrease substantially. </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>Cyber
      Merchants common shares are thinly traded and, you may be unable to sell at
      or
      near ask prices or at all if you need to convert your Series B Preferred Stock
      and sell your shares to raise money or otherwise desire to liquidate such
      shares.</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">The
      Company cannot predict the extent to which an active public market for its
      common stock will develop or be sustained. Cyber Merchants&#8217; common shares have
      historically been sporadically or &#8220;thinly-traded&#8221; on the &#8220;Over-The-Counter
      Bulletin Board,&#8221; meaning that the number of persons interested in purchasing our
      common shares at or near bid prices at any given time may be relatively small
      or
      non-existent. This situation is attributable to a number of factors, including
      the fact that Cyber Merchants is a small company which is relatively unknown
      to
      stock analysts, stock brokers, institutional investors and others in the
      investment community that generate or influence sales volume, and that even
      if
      we came to the attention of such persons, they tend to be risk-averse and would
      be reluctant to follow an unproven company such as ours or purchase or recommend
      the purchase of our shares until such time as we became more seasoned and
      viable. As a consequence, there may be periods of several days or more when
      trading activity in our shares is minimal or non-existent, as compared to a
      seasoned issuer which has a large and steady volume of trading activity that
      will generally support continuous sales without an adverse effect on share
      price. We cannot give you any assurance that a broader or more active public
      trading market for our common stock will develop or be sustained, or that
      current trading levels will be sustained. </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">The
      market price for Cyber Merchants common stock is particularly volatile given
      our
      status as a relatively small company with a small and thinly traded &#8220;float&#8221; and
      lack of current revenues that could lead to wide fluctuations in our share
      price. The price at which you convert your Series B Preferred Stock into the
      Company&#8217;s common stock many be indicative of the price that will prevail in the
      trading market. You may be unable to sell your common stock at or above your
      purchase price if at all, which may result in substantial losses to
      you.</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">The
      market for Cyber Merchants&#8217; common shares is characterized by significant price
      volatility when compared to seasoned issuers, and we expect that our share
      price
      will continue to be more volatile than a seasoned issuer for the indefinite
      future. The volatility in Cyber Merchants&#8217; share price is attributable to a
      number of factors. First, as noted above, our common shares are sporadically
      and/or thinly traded. As a consequence of this lack of liquidity, the trading
      of
      relatively small quantities of shares by its shareholders may disproportionately
      influence the price of those shares in either direction. The price for its
      shares could, for example, decline precipitously in the event that a large
      number of our common shares are sold on the market without commensurate demand,
      as compared to a seasoned issuer which could better absorb those sales without
      adverse impact on its share price. Secondly, an investment in Cyber Merchants
      is
      a speculative or &#8220;risky&#8221; investment due to Cyber Merchants&#8217; lack of revenues or
      profits to date and uncertainty of future market acceptance for current and
      potential products. As a consequence of this enhanced risk, more risk-adverse
      investors may, under the fear of losing all or most of their investment in
      the
      event of negative news or lack of progress, be more inclined to sell their
      shares on the market more quickly and at greater discounts than would be the
      case with the stock of a seasoned issuer. </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">&#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">Shareholders
      should be aware that, according to SEC Release No. 34-29093, the market for
      penny stocks has suffered in recent years from patterns of fraud and abuse.
      Such
      patterns include (1) control of the market for the security by one or a few
      broker-dealers that are often related to the promoter or issuer; (2)
      manipulation of prices through prearranged matching of purchases and sales
      and
      false and misleading press releases; (3) boiler room practices involving
      high-pressure sales tactics and unrealistic price projections by inexperienced
      sales persons; (4) excessive and undisclosed bid-ask differential and markups
      by
      selling broker-dealers; and (5) the wholesale dumping of the same securities
      by
      promoters and broker-dealers after prices have been manipulated to a desired
      level, along with the resulting inevitable collapse of those prices and with
      consequent investor losses. Our management is aware of the abuses that have
      occurred historically in the penny stock market. Although we do not expect
      to be
      in a position to dictate the behavior of the market or of broker-dealers who
      participate in the market, management will strive within the confines of
      practical limitations to prevent the described patterns from being established
      with respect to our securities. The occurrence of these patterns or practices
      could increase the volatility of our share price. </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>Other
      than the dividend payments that will be due for the Series B Preferred Stock,
      we
      do not anticipate paying any cash dividends. </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">Other
      than the dividend payments that will be due for the Series B Preferred Stock,
      we
      presently do not anticipate that we will pay any dividends on any of our capital
      stock in the foreseeable future. The payment of dividends, if any, would be
      contingent upon our revenues and earnings, if any, capital requirements, and
      general financial condition. The payment of any dividends will be within the
      discretion of our Board of Directors. We presently intend to retain all
      earnings, if any, to implement our business plan; accordingly, we do not
      anticipate the declaration of any dividends in the foreseeable 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 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: 10pt; FONT-FAMILY: ">28</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SELECTED
      CONSOLIDATED FINANCIAL DATA </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: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">You
      should read the summary consolidated financial data set forth below in
      conjunction with &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Management&#8217;s
      Discussion and Analysis of Financial Condition or Plan of
      Operations</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;
and
      our
      predecessor&#8217;s financial statements and the related notes included elsewhere in
      this report. We derived the financial data for the period January&#160;1 through
      June&#160;31, 2006 and as of December&#160;31, 2005 and 2004 from the
      predecessor&#8217;s financial statements included in this report. The historical
      results are not necessarily indicative of the results to be expected for any
      future 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>
      <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

          <tr>
            <td align="left" valign="bottom" width="43%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td colspan="5" valign="bottom" width="26%" 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">Six
                months ended June 30,</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td colspan="5" valign="bottom" width="25%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Year
                ended December 31,</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="43%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2005</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2005</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2004</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
            <td width="2%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="43%" 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
                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">$</font></div>
            </td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12,562,004</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="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">14,489,359</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">$</font></div>
            </td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">24,577,206</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="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">$22,421,765</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="43%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cost
                of sales</font></div>
            </td>
            <td width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(9,077,139</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(10,469,875</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(18,441,644</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(17,763,244</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="43%" 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="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="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="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="43%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gross
                profit</font></div>
            </td>
            <td width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,484,865</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,019,484</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,135,562</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,658,521</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="43%" 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">Administrative
                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="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(610,325</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" 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="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">(320,881</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" 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="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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            <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">(673,973</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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            <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation</font></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;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(121,084</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
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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;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(100,655</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
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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;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(214,534</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
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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;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(177,823</font></div>
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            <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>
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            <td align="left" valign="bottom" width="43%" 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">Selling
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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;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(198,713</font></div>
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            <td align="left" valign="bottom" width="2%" 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="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">(116,179</font></div>
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            <td align="left" valign="bottom" width="2%" 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="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">(188,058</font></div>
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            <td align="left" valign="bottom" width="2%" 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="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">(405,989</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>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
            <td width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="43%" 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">Income
                from operations before the following</font></div>
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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="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="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="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="43%" style="border-bottom: white;">
              <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">Items
                and taxes</font></div>
            </td>
            <td width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,554,743</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,481,769</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,993,349</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,400,736</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="43%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Professional
                fees for pre-listing exercise</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">-</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="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">-</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="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">(320,892</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" 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="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">-</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="43%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Reversal
                of commission payable</font></div>
            </td>
            <td width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">716,575</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">718,250</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="43%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                income </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">171,250</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="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">200,562</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="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">302,903</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="11%" 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;">
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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: white;">
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            <td align="left" valign="bottom" width="43%" 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="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="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="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>
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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;">
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            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
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            <td align="left" valign="bottom" width="2%" 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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              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 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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            <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">)</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;">
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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">)</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;">
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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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            <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
            <td width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="43%" 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
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            <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" 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;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 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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            <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">$</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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          <tr>
            <td align="left" valign="bottom" width="57%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" colspan="5" valign="bottom" width="25%" style="border-bottom: black thin solid;">
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
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          <tr>
            <td align="left" valign="bottom" width="57%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
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            <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
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<font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><strong>2004</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
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            <td align="left" valign="bottom" width="57%" 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"><strong>Consolidated
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            <td width="2%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: medium none;">
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: medium none;">
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: medium none;">
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
          </tr>
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            <td align="left" valign="bottom" width="57%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
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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">$</font></div>
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            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">188,219</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">154,368</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="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">95,226</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="57%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Working
                Capital 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;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">994,286</font></td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,838,819</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,692,014</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="57%" style="border-bottom: #ccffcc;">
              <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">Total
                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;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28,172,973</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="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">24,920,741</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="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">22,568,708</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="57%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                Debt</font></div>
            </td>
            <td width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,142,293</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">15,879,322</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">16,886,198</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="57%" style="border-bottom: #ccffcc solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                Shareholders&#8217; Equity</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;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">11,030,680</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc 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="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9,041,419</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc 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="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5,682,510</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc solid;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Footnotes
      </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">The
      transaction contemplated under the Exchange Agreement (the &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exchange</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;)
      is
      deemed to be a reverse acquisition, where Cyber (the legal acquirer) is
      considered the accounting acquiree and Infosmart (the legal acquiree) is
      considered the accounting acquirer. The consolidated financial statements of
      the
      combined entity will in substance be those of Infosmart, with the assets and
      liabilities, and revenues and expenses, of Cyber being included effective from
      the assumed date of August 25, 2005 (date of Cyber&#8217;s inception) for the
      unaudited pro forma condensed combined statement of operations, and May 31,
      2006
      for the unaudited pro forma condensed combined balance sheet. Cyber is deemed
      to
      be a continuation of the business of Infosmart.</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: 10pt; FONT-FAMILY: ">29</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <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
      unaudited pro forma condensed combined balance sheet as of May 31, 2006 is
      prepared based on the unaudited historical balance sheets of Infosmart of
      June&#160;30, 2006 and the audited historical balance sheet of Cyber as of May
      31, 2006, and includes adjustments which give effect to the Exchange Transaction
      and are computed assuming the transaction was consummated on May 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 style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>MANAGEMENT&#8217;S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS </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"><em>The
      following discussion and analysis of the results of operations and financial
      condition of Infosmart for the three and six months ended June 30, 2006 and
      2005
      and the fiscal years ended December 31, 2005 and 2004 should be read in
      conjunction with Selected Consolidated Financial Data and Infosmart&#8217;s financial
      statements and the notes to those financial statements that are included
      elsewhere in this Memorandum. Our discussion includes forward-looking statements
      based upon current expectations that involve risks and uncertainties, such
      as
      our plans, objectives, expectations and intentions. Actual results and the
      timing of events could differ materially from those anticipated in these
      forward-looking statements as a result of a number of factors, including those
      set forth under the Risk Factors, Cautionary Notice Regarding Forward-Looking
      Statements and Business sections in this Memorandum. We use words such as
&#8220;anticipate,&#8221; &#8220;estimate,&#8221; &#8220;plan,&#8221; &#8220;project,&#8221; &#8220;continuing,&#8221; &#8220;ongoing,&#8221; &#8220;expect,&#8221;
&#8220;believe,&#8221; &#8220;intend,&#8221; &#8220;may,&#8221; &#8220;will,&#8221; &#8220;should,&#8221; &#8220;could,&#8221; and similar expressions
      to identify forward-looking statements.</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="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="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">Infosmart
      Group Limited (&#8220;Infosmart&#8221;) was incorporated in the British Virgin Islands on
      August 23, 2005 under the International Business Companies Act, British Virgin
      Islands. Prior to the Re-structuring (as described below) Prime Fortune, a
      British Virgin Islands company (&#8220;Prime&#8221;), was the sole shareholder of 100% of
      Infosmart&#8217;s issued capital shares. In August 2006, the board of directors of
      both Prime and Infosmart decided to re-structure certain shareholdings in
      Infosmart, so that after the re-structuring, Prime would no longer own 100%
      of
      Infosmart&#8217;s issued capital shares and so that Prime Corporate Developments Ltd.
      (&#8220;Prime Corporate&#8221;), Kwok Chung and Lui Sau Wan would replace Prime as the
      direct owners of 100% of the issued capital shares and equity ownership of
      Infosmart (the &#8220;Re-structuring&#8221;). </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Prior
      to
      the Re-structuring, Prime owned 100% of the issued capital shares of Infosmart,
      which consisted on one (1) issued capital share, and Prime&#8217;s issued capital
      shares were owned as follows: 713 shares held by Prime Corporate, 212 shares
      held by Kwok Chung, and 75 shares held by Lui Sau Wan. On August 11, 2006,
      and
      in connection with the Re-structuring, Prime&#8217;s board of directors approved
      resolutions for Prime to transfer the one (1) issued capital share of Infosmart
      owned by Prime to Prime shareholder Kwok Chung in exchange for a cash payment
      of
      $1.00 (the &#8220;Prime Transfer&#8221;), and that pursuant to such resolutions, Prime
      transferred the one Infosmart share to Kwok Chung on August 11, 2006 in exchange
      for the $1.00 cash payment.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Further,
      on August 11, 2006 and concurrent with the Prime Transfer, the Company&#8217;s Board
      approved resolutions for the issuance of 999 new shares in Infosmart to Prime
      Corporate Developments Limited (&#8220;Prime Corporate&#8221;), Kwok Chung and Lui Sau Wan,
      as follows: 713 shares to Prime Corporate, 211 shares to Kwok Chung, and 75
      shares to Lui Sau Wan, in exchange for a cash payment by Prime Corporate, Kwok
      Chung and Lui Sau Wan of $1.00 per Infosmart share that each receives (the
      &#8220;Infosmart Share Issuance&#8221;) or an aggregate total payment of $999 for such
      shares. On August 11, 2006, the Company issued the 999 Infosmart shares, in
      amounts as described above, to Prime Corporate, Kwok Chung and Lui Sau Wan
      and,
      in exchange, received the $999 cash payment, pursuant to such
      resolutions.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">s
      a
      result of and immediately after the Prime Transfer and the Infosmart Share
      Issuance, Prime Corporate, Kwok Chung and Lui Sau Wan became the owners of
      100%
      of the issued capital shares of Infosmart, with each of them owning the same
      number of Infosmart shares as the number of Prime shares that each currently
      owns. Pursuant to a group reorganization completed in October 2005 (the
&#8220;Reorganization&#8221;), Infosmart is the holding company (directly and indirectly) of
      IS Technology, IS International, IS Media and Infosmart&#8217;s new Brazilian joint
      venture, Discobras, by the acquisition of 100% of the issued and outstanding
      common stock of IS Technology and IS International. IS Technology wholly owns
      IS
      Media, which, in turn, owns 99.42% of Discobras. </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">Infosmart
      started in the DVDR manufacturing business with the establishment of IS
      Technology. Founded in Hong Kong in August of 2002, IS Technology was the first
      company in Hong Kong to manufacture recordable digital versatile disks
      (&#8220;DVDRs&#8221;). With the continual growth in DVDR demand, the initial shareholders of
      IS Technology took in other shareholders to form two other companies, Info
      Smart
      International Enterprises Limited and Infoscience Media Limited, to produce
      DVDRs. These three companies form Infosmart&#8217;s main operational business.
      Infosmart is a profitable and growing company led by industry veterans and
      is
      one of the world&#8217;s top producers of DVDRs. Infosmart currently manufactures 8x
      and 16x discs, and is preparing to launch production of new optical storage
      media, namely, writable HD DVD discs. Infosmart currently has customers in
      Western Europe and Australia and plans further expansion into North and South
      America, the Middle East, Africa, Eastern Europe and Russia. To capture the
      lucrative South American market, Infosmart is establishing a sales and
      distribution network and a production facility in Brazil.</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: 10pt; FONT-FAMILY: ">30</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Critical
      Accounting Policies and Estimates </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">Our
      management's discussion and analysis of our financial condition and results
      of
      operations are based on our consolidated financial statements, which have been
      prepared in accordance with accounting principles generally accepted in the
      United States. The preparation of these financial statements requires us to
      make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and the disclosure of contingent assets and liabilities at the
      date
      of the financial statements as well as the reported net sales and expenses
      during the reporting periods. On an ongoing basis, we evaluate our estimates
      and
      assumptions. We base our estimates on historical experience and on various
      other
      factors that we believe are reasonable under the circumstances, the results
      of
      which form the basis for making judgments about the carrying value of assets
      and
      liabilities that are not readily apparent from other sources. Actual results
      may
      differ from these estimates under different assumptions or conditions.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">While
      our
      significant accounting policies are more fully described in Note 5 to our
      consolidated financial statements appearing at Exhibit 99.2, we believe that
      the
      following accounting policies are the most critical to aid you in fully
      understanding and evaluating</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Basis
      of presentation and consolidation</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      October 20, 2005, Infosmart&#8217;s Reorganization was completed and accordingly,
      accounting for recapitalization is adopted for the preparation of consolidated
      financial statements. Generally, this means that the consolidated financial
      statements are issued under the name of the legal parent, Infosmart Group
      Limited, but includes the combined financial statements of IS Technology and
      IS
      International. The comparative figures represent their combined financial
      position, the results of operations and cash flows. The accompanying
      consolidated financial statements of Infosmart have been prepared in accordance
      with generally accepted accounting principles in the United States of America.
      The consolidated financial statements include the accounts of Infosmart and
      its
      subsidiaries. All significant inter-company 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"><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"><u>Use
      of
      estimates</u></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
      preparing of the financial statements in conformity with accounting principles
      generally accepted in the United States of America, management makes estimates
      and assumptions that affect the reported amounts of assets and liabilities
      and
      disclosures of contingent assets and liabilities at the dates of the financial
      statements, as well as the reported amounts of revenues and expenses during
      the
      reporting years. These accounts and estimates include, but are not limited
      to,
      the valuation of accounts receivable, inventories, deferred income taxes and
      the
      estimation on useful lives of plant and machinery. Actual results could differ
      from those estimates.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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"><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="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">Infosmart
      considers all cash and other highly liquid investments with initial maturities
      of three months or less. At December 31, 2005, the Company had $154,368 in
      cash
      and cash equivalents. DVDR production is a capital-intensive business. Most
      of
      the Company&#8217;s capital lease and bank loans are on a short-term basis. These
      short-term arrangements allow the Company to minimize interest payment but
      at
      the same time kept the Company&#8217;s net cash flow at a low level. Therefore, even
      though a large amount of cash is collected from sales of goods, a considerable
      portion of the cash is used to pay for leased equipment. The Company has paid
      off $7,537,978 and $4,008,648 of capital lease/bank loans in 2004 and 2005
      respectively. By the beginning of 2006, only 6 machines out of the total of
      44
      machines were leased equipment. With majority of the Company&#8217;s lease obligations
      completed, the Company&#8217;s net cash flow is expected to improve in
      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 style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Trade
      receivable</u></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">Trade
      receivables are stated at original amount less allowance made for doubtful
      receivables, if any, based on a review of all outstanding amounts at the year
      end. Full allowances for doubtful receivables are made when the receivables
      are
      overdue for 1 year and an allowance is also made when there is objective
      evidence that Infosmart will not be able to collect all amounts due according
      to
      original terms of receivables. Bad debts are written off when identified.
      Infosmart extends unsecured credit to customers in the normal course of business
      and believes all trade receivables in excess of the allowances for doubtful
      receivables to be fully collectible. Infosmart does not accrue interest on
      trade
      accounts receivable. The normal credit terms range from 15 to 60 days. During
      the reporting years, Infosmart had no bad debt experience and, accordingly,
      did
      not make any allowance for doubtful debts. </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: 10pt; FONT-FAMILY: ">31</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <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>Inventories</u></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">Inventories
      are stated at the lower of cost or market. Cost is determined on a first-in,
      first out basis and includes all expenditures incurred in bringing the goods
      to
      the point of sale and putting them in a saleable condition. In assessing the
      ultimate realization of inventories, the management makes judgments as to future
      demand requirements compared to current or committed inventory levels.
      Infosmart&#8217;s reserve requirements generally increase as the management projected
      demand requirements; decrease due to market conditions, product life cycle
      changes. During the reporting years, Infosmart was not required to make any
      allowance for slow-moving or defective inventories.</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"><u>Plant
      and equipment</u></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">Plant
      and
      equipment are stated at cost less accumulated depreciation. Cost represents
      the
      purchase price of the asset and other costs incurred to bring the asset into
      its
      existing use. Maintenance, repairs and betterments, including replacement of
      minor items, are charged to expense; major additions to physical properties
      are
      capitalized.</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">Depreciation
      of plant and equipment is provided using the straight-line method over their
      estimated useful lives. The principal annual rates are as follows:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div align="center">
      <table border="0" cellpadding="0" cellspacing="0" width="80%">

          <tr bgcolor="#ccffcc">
            <td align="justify" valign="top" width="32%" style="border-bottom: #ccffcc;">
              <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">Production
                line and equipment</font></div>
            </td>
            <td width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="justify" valign="top" width="27%" style="border-bottom: #ccffcc;">
              <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">10%
                with 30% residual value</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="justify" valign="top" width="32%" style="border-bottom: white;">
              <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">Others</font></div>
            </td>
            <td width="2%" style="border-bottom: white;">&#160;</td>
            <td align="justify" valign="top" width="27%" style="border-bottom: white;">
              <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">20%</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">Effective
      April 1, 2004, the depreciation rate for the production line and equipment
      was
      changed from 20% to 10% with a residual value of 30% on cost. With reference
      to
      a valuation carried out at November 9, 2005 by a major production line and
      equipment supplier, the management considered that the revised depreciation
      method reflected more fairly the expected useful lives of the production line
      and equipment and its resalable value. The effect of a change in an accounting
      estimate is recognized prospectively by including it in consolidated statements
      of operations in 2004 and it increased the results of operations for 2004 by
      approximately $1,650,732. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Impairment
      of long-lived assets</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Long-lived
      assets are reviewed for impairment whenever events or changes in circumstances
      indicate that the carrying amount of the assets may not be recoverable.
      Infosmart recognizes impairment of long-lived assets in the event that the
      net
      book values of such assets exceed the future undiscounted cashflows attributable
      to such assets. No impairment of long-lived assets was recognized for any of
      the
      periods presented.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Financial
      instruments</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      carrying values of Infosmart&#8217;s financial instruments, including cash and cash
      equivalents, restricted cash, trade and other receivables, deposits, dividend
      payable, trade and other payables approximate their fair values due to the
      short-term maturity of such instruments. The carrying amounts of borrowings
      approximate their fair values because the applicable interest rates approximate
      current market rates.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Foreign
      currency translation</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Infosmart
      is exposed to certain foreign currency risk from export sales transactions
      and
      recognized trade receivables as they will affect the future operating results
      of
      Infosmart. Infosmart did not have any hedging activities during the reporting
      period. As the functional currency of Infosmart is HK$, the exchange difference
      on translation to US dollars for reporting purpose is taken to other
      comprehensive income.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; 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: 10pt; FONT-FAMILY: ">32</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <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"><u>Income
      taxes</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Infosmart
      uses the asset and liability method of accounting for income taxes pursuant
      to
      SFAS No. 109 &#8220;Accounting for Income Taxes&#8221;. Under the asset and liability method
      of SFAS 109, deferred tax assets and liabilities are recognized for the future
      tax consequences attributable to temporary differences between the financial
      statements carrying amounts of existing assets and liabilities and loss
      carryforwards and their respective tax bases. Deferred tax assets and
      liabilities are measured using enacted tax rates expected to apply to taxable
      income in the years in which those temporary differences are expected to be
      recovered or settled.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Revenue
      recognition</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenue
      from sales of the Infosmart&#8217;s products is recognized when the significant risks
      and rewards of ownership have been transferred to the buyer at the time of
      delivery and the sales price is fixed or determinable and collection is
      reasonably assured.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Concentrations
      of credit risk</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Financial
      instruments that potentially subject Infosmart to significant concentrations
      of
      credit risk consist principally of trade receivables. Infosmart extends credit
      based on an evaluation of the customer&#8217;s financial condition, generally without
      requiring collateral or other security. Infosmart conducts periodic reviews
      of
      the client&#8217;s financial conditions and payment practices. Further, Infosmart will
      maintain an allowance for doubtful accounts based on the management&#8217;s
      expectations on actual losses possibly incurred. Other than set forth below,
      no
      customers represented 10% or more of Infosmart&#8217;s net sales and trade receivable.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">At
      December 31, 2005 and 2004,&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">customers&#160;that
      represented 10% or more of Infosmart&#8217;s&#160;net sales and&#160;their trade
      receivables are:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

            <tr>
              <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                  sales&#160;</font></div>
              </td>
              <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
              <td colspan="5" valign="bottom" width="25%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Year
                  Ended December 31,</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2005</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
              <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2004</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            </tr>
            <tr bgcolor="#ccffcc">
              <td align="left" valign="bottom" width="71%" 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">DVD
                  Technology</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"><strong>$</strong></font></div>
              </td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>1,592,482</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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              <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">3,492,778</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="71%" style="border-bottom: white solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ENet</font></div>
              </td>
              <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>17,164,213
                  </strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">16,188,381</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="71%" style="border-bottom: #ccffcc solid;">&#160;</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"><strong>$</strong></font></div>
              </td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>18,756,695</strong></font></div>
              </td>
              <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
              </td>
              <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">19,681,159</font></div>
              </td>
              <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc 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>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

          <tr>
            <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Trade
                receivables</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: -0.55pt">&#160;</font></div>
            </td>
            <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="5" valign="bottom" width="25%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>As
                of December 31,</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2005</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2004</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="71%" 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">DVD
                Technology</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"><strong>$</strong></font></div>
            </td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>376,160</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="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">513,912</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="71%" style="border-bottom: white solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ENet</font></div>
            </td>
            <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>1,610,075
                </strong></font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">699,141
                </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="71%" style="border-bottom: #ccffcc solid;">&#160;</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"><strong>$</strong></font></div>
            </td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman"><strong>1,986,235</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,213,053</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc 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="left"><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="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
      November 2004, the FASB issued SFAS No. 151, &#8220;Inventory costs - an amendment of
      ARB No. 43, Chapter 4.&#8221; (&#8220;SFAS 151&#8221;). SFAS 151 amends ARB 43, Chapter 4 to
      clarify that &#8220;abnormal&#8221; amount of idle freight, handling costs and spoilage
      should be recognized as current period charges. SFAS 151 is effective for
      inventory costs incurred during fiscal years beginning after June 15,
      2005.</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
      December 2004, the FASB issued SFAS No. 123R, &#8220;Share-Based Payment&#8221; (&#8220;SFAS
      123R&#8221;), which revises SFAS No. 123, &#8220;Accounting for Stock Based Compensation&#8221;,
      and supersedes APB 25. Among other items, SFAS 123R eliminates the use of APB
      25
      and the intrinsic value method of accounting, and requires companies to
      recognize in the financial statements the cost of employee services received
      in
      exchange for awards of equity instruments, based on the grant-date fair value
      of
      those awards. This cost is to be recognized over the period during which an
      employee is required to provide service in exchange for the award (typically
      the
      vesting period). SFAS 123R also requires that benefits associated with tax
      deductions in excess of recognized compensation cost be reported as a financing
      cash inflow, rather than as an operating cash flow as required under current
      literature.</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">SFAS
      123R
      permits companies to adopt its requirements using either a &#8220;modified
      prospective&#8221; method, or a &#8220;modified retrospective&#8221; method. </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">Under
      the
&#8220;modified prospective&#8221; method, compensation cost is recognized in the financial
      statements beginning with the effective date, based on the requirements of
      SFAS
      123R for all share-based awards granted or modified after that date, and based
      on the requirements of SFAS 123 for all unvested awards granted prior to the
      effective date of SFAS 123R. Under the &#8220;modified retrospective&#8221; method, the
      requirements are the same as under the &#8220;modified prospective&#8221; method, but this
      method also permits entities to restate financial statements of previous periods
      based on pro forma disclosures made in accordance with SFAS 123. Infosmart
      is
      adopting SFAS 123R effective January 1, 2006 using the modified prospective
      method.</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: 10pt; FONT-FAMILY: ">33</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <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">In
      May
      2005, the FASB issued SFAS No. 154, &#8220;Accounting Changes and Error Corrections&#8221;
(&#8220;SFAS 154&#8221;), which changes the requirements for the accounting for and
      reporting of a change in accounting principle. The statement requires
      retrospective application to prior period financial statements of changes in
      accounting principle, unless impracticable to do so. It also requires that
      a
      change in the depreciation, amortization, or depletion method for long-lived
      non-financial assets be accounted as a change in accounting estimate, effected
      by a change in accounting principle. Accounting for error corrections and
      accounting estimate changes will continue under the guidance in APB Opinion
      20,
&#8220;Accounting Changes&#8221;, as carried forward in this pronouncement. The statement is
      effective for fiscal years beginning after December 15, 2005.</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
      November 2005, the FASB issued FSP Nos. FAS 115-1 and 124-1, &#8220;The Meaning of
      Other-Than-Temporary Impairment and Its Application to Certain Investments.&#8221;
This FSP addresses the determination as to when an investment is considered
      impaired, whether the impairment is &#8216;other-than-temporary&#8217;, and the measurement
      of an impairment loss. The investment is impaired if the fair value is less
      than
      cost. The impairment is &#8216;other-than-temporary&#8217; for equity securities and debt
      securities that can contractually be prepaid or otherwise settled in such a
      way
      that the investor would not recover substantially all of its cost. If
&#8216;other-than-temporary&#8217;, an impairment loss shall be recognized in earnings equal
      to the difference between the investment&#8217;s cost and its fair value. The guidance
      in this FSP is effective in reporting periods beginning after December 15,
      2005.
</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: 36pt; 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 SFAS No. 155,
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Accounting
      for Certain Hybrid Financial Instruments,</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      which
      amends SFAS No. 133, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Accounting
      for Derivative Instruments and Hedging Activities </em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(&#8220;SFAS
      No. 155&#8221;), and SFAS No. 140, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Accounting
      for Transfers and Servicing of Financial Assets and Extinguishments of
      Liabilities</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      SFAS
      No. 155 simplifies the accounting for certain derivatives embedded in other
      financial instruments by allowing them to be accounted for as a whole if the
      holder elects to account for the whole instrument on a fair value basis. SFAS
      No. 155 also clarifies and amends certain other provisions of SFAS No. 133
      and
      SFAS No. 140. SFAS No. 155 is effective for all financial instruments acquired,
      issued or subject to a remeasurement event occurring in fiscal years beginning
      after September 15, 2006. Earlier adoption is permitted, provided the Company
      has not yet issued financial statements, including for interim periods, for
      that
      fiscal year. </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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      July
      2006, the FASB issued FIN 48 &#8220;Accounting for Uncertainty in Income Taxes.&#8221; This
      interpretation requires that we recognize in our financial statements, the
      impact of a tax position, if that position is more likely than not of being
      sustained on audit, based on the technical merits of the position. The
      provisions of FIN 48 are effective as of the beginning of our 2007 fiscal year,
      with the cumulative effect of the change in accounting principle recorded as
      an
      adjustment to opening retained earnings.</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>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"><strong>Comparison
      of Years Ended December 31, 2005 and December&#160;31,
      2004.</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"><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"><strong><em>Net
      Sales</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>.
      </em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Infosmart&#8217;s
      net sales were $24,577,206 in 2005, an increase of approximately 9.6% on prior
      year sales of $22,421,765. The increase in revenues was driven by a 49% growth
      in manufactured disc revenues to $21,966,222 from $14,736,765. This more than
      offset a 66% decline in sales of purchased discs manufactured by third parties.
      Eighty nine percent of the company&#8217;s revenues were from sales of manufactured
      discs, up from 66% in 2004. This trend marks a permanent shift in Infosmart&#8217;s
      operations in favour of sales of own-manufactured discs and in the future the
      company expects sales of purchased discs to be insignificant. Infosmart&#8217;s
      manufactured discs in 2005 were mostly 8x and 16x DVDRs; 4x DVDR discs were
      largely purchased for resale. In 2004, Infosmart&#8217;s manufactured product mix was
      largely composed of 4x and 8x DVDRs. The average sale price of the Infosmart&#8217;s
      manufactured discs in 2005 was 18.1 cents, 14.6% down from 21.2 cents in
      2004.</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"><strong><em>Cost
      of Sales</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>.
      </em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cost
      of
      sales increased from $17,763,244 or approximately 79.2% of net sales in fiscal
      2004, to $18,441,644, or approximately 75% of net sales in the same period
      in
      fiscal 2005. The approximately 3.8% increase is primarily attributable to the
      increase in our volume of sales. Unit cost of goods sold (&#8220;COGS&#8221;) fell by 12.9%
      to 13.3 cents per disc, driven by a 20% fall in polycarbonate (PCB) costs during
      2005, from $3.5/kg to $2.8/kg. PCB normally accounts for 50%-60% and 30%-40%
      of
      Infosmart&#8217;s raw material costs and COGS, respectively. The decrease in the
      overall cost of sales as a percentage of net sales is mainly attributable to
      the
      drop in the cost of purchased discs as a percentage of their sales, from 93.1%
      in 2004 to 87.0% in 2005. This exceeded a modest rise in the cost of
      manufactured discs as a percentage of their sales, from 72.0% in 2004 to 73.6%
      in 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 id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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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: 10pt; FONT-FAMILY: ">34</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
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      </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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Gross
      Profit</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      Gross
      profit increased approximately 31.7% from $4,658,521 in 2004 to $6,135,562
      in
      2005. This increase in gross profit is due to the Infosmart&#8217;s reduction of
      rebates offered to customers purchasing high quantities. These rebates were
      originally conceived when market prices of discs were high and became less
      appropriate as they fell during 2005.</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"><strong><em>Selling
      and Distribution Costs</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      Selling
      and distribution costs decreased approximately 53.7% from $405,989 in 2004
      to
      $188,058 in 2005. This decrease in selling and distribution costs is primarily
      due to the fall in commission and traveling expenses from approximately total
      of
      $288,000 in 2004 to $53,000 in 2005. In 2004, in order to expand our market
      share and boost sales, higher commission and traveling expenses were incurred.
      In 2005, stronger customer relationships were already established and thus
      those
      expenses were reduced accordingly.</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"><strong><em>Administrative
      Expenses. </em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Administrative
      expenses increased approximately 9.7% from $673,973 in 2004 to $739,621 in
      2005.
      This increase in administrative expenses is due to the establishment of IS
      Media
      (Factory 3) and the employment of 10 new administrative personnel. </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"><strong><em>Net
      Income</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      Net
      income increased approximately 39.4% from $3,024,300 in 2004 to $4,214,761
      in
      2005. Further, Infosmart&#8217;s net income margin was 17.1% and 13.5% in 2005 and
      2004, respectively. This increase in net income is due primarily to the rise
      in
      revenues and fall in cost of goods sold and sales, general and administrative
      expenses as a percentage of sales. In addition, the company and its customers
      agreed to cancel potential sales rebates worth $718,250, which had been accrued
      in past years, because these rebates had been agreed, but not paid, in relation
      to selling prices which had subsequently been reduced by the company, and were
      therefore no longer commercially justified. This non-cash reversal exceeded
      $320,892 incurred in professional fees in 2005 in preparation for the reverse
      merger listing. </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"><strong>Comparison
      of Three Month and Six Month Periods Ended June 30, 2006 and June&#160;30,
      2005.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      following table sets forth the results of our operations for the periods
      indicated as a percentage of net sales:</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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            <td align="left" valign="bottom" width="27%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="11" valign="bottom" width="30%" 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">
                <div 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">Three
                  months ended </font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">June
                  30</font></div>
              </div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
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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: 8pt; FONT-FAMILY: Times New Roman">&#160;Six
                  months ended&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">&#160;June
                  30</font></div>
              </div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
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          <tr>
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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: 8pt; FONT-FAMILY: Times New Roman">2006</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
            <td colspan="2" valign="bottom" width="6%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">%
                of</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
            <td colspan="2" valign="bottom" width="6%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">2005
                </font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
            <td colspan="2" valign="bottom" width="6%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">%
                of
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            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
            <td colspan="2" valign="bottom" width="6%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">2006</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
            <td colspan="2" valign="bottom" width="6%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">%
                of</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
            <td colspan="2" valign="bottom" width="6%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">2005
                </font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
            <td colspan="2" valign="bottom" width="6%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">%
                of
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            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="27%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="6%" 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: 8pt; FONT-FAMILY: Times New Roman">Unaudited</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="6%" 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: 8pt; FONT-FAMILY: Times New Roman">Unaudited</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="6%" 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: 8pt; FONT-FAMILY: Times New Roman">Revenue
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="6%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">Unaudited</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="6%" 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: 8pt; FONT-FAMILY: Times New Roman">Revenue</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="6%" 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: 8pt; FONT-FAMILY: Times New Roman">Unaudited</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="6%" 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: 8pt; FONT-FAMILY: Times New Roman">Revenue</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin 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="left"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">SALES</font></div>
            </td>
            <td width="1%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,330,486</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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">100.00</font></div>
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            <td align="left" valign="bottom" width="2%" 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: 8pt; 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;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: #ccffcc;">
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            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">100.00</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12,562,004</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="5%" style="border-bottom: #ccffcc;">
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            <td align="left" valign="bottom" width="2%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="bottom" width="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">14,489,359</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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">100.00</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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; 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;">&#160;</td>
            <td width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <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="27%" 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: 8pt; FONT-FAMILY: Times New Roman">COST
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            <td width="1%" 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="5%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,436,765</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">70.09</font></div>
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            <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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,373,868</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">73.70</font></div>
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            <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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9,077,139</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">72.26</font></div>
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            <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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,469,875</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">72.26</font></div>
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            <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: 8pt; 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="27%" style="border-bottom: white;">&#160;</td>
            <td width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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="27%" 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: 8pt; FONT-FAMILY: Times New Roman">GROSS
                PROFIT</font></div>
            </td>
            <td width="1%" 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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,893,721</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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">29.91</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" 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: 8pt; 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;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,274,582</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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">26.30</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" 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: 8pt; 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;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,484,865</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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27.74</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" 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: 8pt; 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;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,019,484</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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27.74</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: 8pt; 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="27%" style="border-bottom: white;">&#160;</td>
            <td width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
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            <td align="right" valign="bottom" width="5%" style="border-bottom: #ccffcc;">
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            <td width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
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            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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="27%" 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="5%" 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="5%" style="border-bottom: #ccffcc;">
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            <td align="left" valign="bottom" width="2%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</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="5%" style="border-bottom: #ccffcc;">
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            <td align="left" valign="bottom" width="2%" 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="5%" style="border-bottom: #ccffcc;">
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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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</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="5%" style="border-bottom: #ccffcc;">
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            <td align="left" valign="bottom" width="27%" style="border-bottom: white;">&#160;</td>
            <td width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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="27%" style="border-bottom: #ccffcc solid;">
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            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: #ccffcc thin solid;">
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            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: #ccffcc thin solid;">
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            <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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">198,713</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.58</font></div>
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            <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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: #ccffcc thin solid;">
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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: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: #ccffcc;">
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          <tr bgcolor="white">
            <td align="left" valign="bottom" width="27%" style="border-bottom: white;">&#160;</td>
            <td width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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="27%" 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: 8pt; FONT-FAMILY: Times New Roman">REVERSAL
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            <td width="1%" 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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.00</font></div>
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            <td align="left" valign="bottom" width="2%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">716,575</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="5%" style="border-bottom: #ccffcc;">
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            <td align="left" valign="bottom" width="2%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.00</font></div>
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            <td align="left" valign="bottom" width="2%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</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="5%" 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="5%" style="border-bottom: #ccffcc;">
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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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
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          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="27%" style="border-bottom: white;">&#160;</td>
            <td width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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="27%" 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: 8pt; FONT-FAMILY: Times New Roman">OTHER
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            </td>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">119,725</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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1.89</font></div>
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            <td align="left" valign="bottom" width="2%" 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: 8pt; 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;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">69,069</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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.80</font></div>
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            <td width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: #ccffcc thin solid;">
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: #ccffcc thin solid;">
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            <td align="right" valign="bottom" width="5%" style="border-bottom: black thin solid;">
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: #ccffcc thin solid;">
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: #ccffcc thin solid;">
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          <tr bgcolor="white">
            <td align="left" valign="bottom" width="27%" style="border-bottom: white;">&#160;</td>
            <td width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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="27%" 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: 8pt; FONT-FAMILY: Times New Roman">INCOME
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            </td>
            <td width="1%" 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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,335,954</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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">21.10</font></div>
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            <td align="left" valign="bottom" width="2%" 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: 8pt; 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;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,590,382</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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">29.95</font></div>
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            <td align="left" valign="bottom" width="2%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,450,507</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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">19.51</font></div>
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            <td align="left" valign="bottom" width="2%" 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: 8pt; 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;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">28.78</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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
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          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="27%" style="border-bottom: white;">&#160;</td>
            <td width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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="27%" 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: 8pt; FONT-FAMILY: Times New Roman">INCOME
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5.04</font></div>
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            <td width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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="27%" 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: 8pt; FONT-FAMILY: Times New Roman">NET
                INCOME </font></div>
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            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
            <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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17.28</font></div>
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            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">24.70</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">16.03</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
            <td align="right" valign="bottom" width="5%" style="border-bottom: black double;">
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="5%" 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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23.74</font></div>
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            <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: 8pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">%</font></div>
            </td>
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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 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>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">35</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">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Comparison
      of Three Months Ended June 30, 2006 and 2005 </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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Net
      Sales</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>.
      </em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
      the
      three months ended June 30, 2006, Infosmart&#8217;s net sales decreased 26.8% from
      $8,648,450 to $6,330,486 relative to the three months ended June 30, 2005.
      The
      decrease in revenues was driven by the decrease in the average sale price of
      the
      Infosmart&#8217;s manufactured discs and the shifting of the sales force from Europe
      to Brazil. Another factor is the conversion of one production line to test
      HD-DVD production frequently. It causes the production capacity of the
      production line decreased by 5%.</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"><strong><em>Cost
      of Sales</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>.
      </em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cost
      of
      sales decreased from $6,373,868 or approximately 73.7% of net sales for the
      three months ended June 30, 2005, to $4,436,765, or approximately 70.1% of
      net
      sales for the three months ended June 30, 2006, an decrease of 30.4% over the
      same comparable quarters in 2005 and 2006. The decrease in cost of sales was
      driven by the continuing moving downward trend in polycarbonate (PCB) costs
      during 2006. The PCB costs, however, have a lower sensitivity than the sale
      price.</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"><strong><em>Gross
      Profit</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      Gross
      profit decreased approximately 16.7% from $2,274,582 for the three months ended
      June 30, 2005 to $1,893,721 for the three months ended June 30, 2006. This
      decrease in gross profit is due to the average sale selling price per disc
      was
      about 10% down from 18.1 cents in 2005.</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"><strong><em>Selling
      and Distribution Costs</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      For the
      three months ended June 30, 2006, selling and distribution costs increased
      approximately 389.6% from $30,724 to $150,426 relative to the three months
      ended
      June 30, 2005. This increase in selling and distribution costs <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">is
      primarily due to the fall in commission and traveling expenses from
      approximately $288,000 in 2004 to $53,000 in 2005. In 2004, in order to expand
      our market share and boost sales, higher commission and traveling expenses
      were
      incurred. In 2005, stronger customer relationships were already established
      and
      thus those expenses were reduced accordingly.</font></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"><strong><em>Administrative
      Expenses. </em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Administrative
      expenses increased approximately 49.4% from $225,443 for the three months ended
      June 30, 2005 to $336,784 for the three months ended June 30, 2005. This
      increase in administrative expenses is due to the establishment of Brazil plant
      and sales office and the employment of new administrative personnel. Further,
      legal and professional fees were continuously paid for listing exercise during
      the period. </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"><strong><em>Net
      Income</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      Net
      income decreased approximately 48.8% from $2,136,083 for the three months ended
      June 30, 2006 to $1,093,906 for the three months ended June 30, 2005. Further,
      Infosmart&#8217;s net income margin was 17.3% and 24.7% in the same comparable
      quarters in 2006 and 2005, respectively. This decrease in net income is due
      primarily to the fall in revenues and increase in general and administrative
      expenses as a percentage of sales. In addition, the company and its customers
      agreed to cancel potential sales rebates worth $716,575, which had been accrued
      in past years, because these rebates had been agreed, but not paid, in relation
      to selling prices which had subsequently been reduced by the company, and were
      therefore no longer commercially justified.</font><br></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>Comparison
      of Six Months Ended June 30, 2006 and 2005</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"><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"><strong><em>Net
      Sales</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>.
      </em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
      the
      six months ended June 30, 2006, Infosmart&#8217;s net sales decreased 13.3% from
      $14,489,359 to $12,562,004 relative to the six months ended June 30, 2005.
      The
      decrease in revenues was driven by the decrease in the average sale price of
      the
      Infosmart&#8217;s manufactured discs compared with the same quarters in 2005. It
      causes the production capacity of the production line decreased by
      5%.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
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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: 10pt; FONT-FAMILY: ">36</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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        </div>
      </div>
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        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </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">&#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"><strong><em>Cost
      of Sales</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>.
      </em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cost
      of
      sales decreased from $10,469,875 or approximately 72.3% of net sales for the
      six
      months ended June 30, 2005, to $9,077,139, or approximately 72.3% of net sales
      for the six months ended June 30, 2006, an decrease of only 13.3%, as compared
      to a 13.3% decrease in sales over the same comparable quarters in 2005 and
      2006.
      The decrease in cost of sales was driven by the continuing moving downward
      trend
      in polycarbonate (PCB) costs during 2006. The PCB costs, however, have a lower
      sensitivity than the sale price.</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"><strong><em>Gross
      Profit.</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      Gross
      profit decreased approximately 13.3% from $ 4,019,484 for the six months ended
      June 30, 2005 to $3,484,865 for the six months ended June 30, 2006. This
      decrease in gross profit is due to the average sale selling price per disc
      was
      about 10% down from 18.1 cents in 2005.</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"><strong><em>Selling
      and Distribution Costs</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      For the
      six months ended June 30, 2006, selling and distribution costs increased
      approximately 71.0% from $116,179 to $198,713 relative to the six months ended
      June 30, 2005. This increase in selling and distribution costs <font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">is
      due to
      the promotion of new market in Brazil and its neighbors</font>.</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"><strong><em>Administrative
      Expenses. </em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Administrative
      expenses increased approximately 90.2% from $320,881 for the six months ended
      June 30, 2005 to $610,325 for the six months ended June 30, 2006. This increase
      in administrative expenses is due to the establishment of Brazil plant and
      sales
      office and the employment of new administrative personnel. Further, legal and
      professional fees were continuously paid for listing exercise during the
      period.</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"><strong><em>Net
      Income</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      Net
      income decreased approximately 41.5% from $3,439,286 for the six months ended
      June 30, 2005 to $2,013,412 for the six months ended June 30, 2006. Further,
      Infosmart&#8217;s net income margin was 16.0% and 23.7% in the same comparable
      quarters in 2006 and 2005, respectively. This decrease in net income is due
      primarily to the fall in revenues and increase in general and administrative
      expenses as a percentage of sales. In addition, the company and its customers
      agreed to cancel potential sales rebates worth $716,575, which had been accrued
      in past years, because these rebates had been agreed, but not paid, in relation
      to selling prices which had subsequently been reduced by the company, and were
      therefore no longer commercially justified.</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>Liquidity
      and Capital Resources</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"><strong><em>Cash
      Flows</em></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"><u>Twelve
      Months ended December 31, 2005</u></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">We
      have
      funded our operations through December 31, 2005 primarily through retained
      earnings and borrowings.</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">Net
      cash
      flow provided by operating activities was $6,825,041 in fiscal 2004 and
      $2,269,328&#160;in fiscal 2005. The reduction of net cash flow in fiscal 2005
      was mainly due to the increase in trade receivables and decrease in trade
      payable as compared to fiscal 2004. Since most of the customers are repeat
      customers, Infosmart gave longer trade terms to those customers who have a
      good
      payment history and who have conducted business with Infosmart for more than
      one
      year. Also, Infosmart had shipped a big Christmas/New Year order to E-Net,
      which
      was worth more than $1.8 million and which was recorded as part of trade
      receivable as of December 31, 2005. Therefore, the trade receivable for fiscal
      2005 was $3,252,678, an increase of $1,388,245 compared to the trade receivable
      of $1,864,433 in fiscal 2004. Another factor contributing to the decrease in
      the
      net cash flow by operating activities was the decrease in trade payable from
      $3,958,980 in fiscal 2004 down to $1,800,984 in fiscal 2005. Material costs
      were
      rising in 2005, but Infosmart purchased in bulk when prices dropped and
      negotiated lower prices from material suppliers by offering shorter payment
      terms. These arrangements also caused a decrease in net cash flow because
      Infosmart was paying suppliers at a much faster rate than in fiscal 2004.
      However, Infosmart was able to secure materials at lower prices in a volatile
      market, thereby minimizing the overall material costs. </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">Net
      cash
      flow used in investing activities was $3,645,625 for fiscal 2004 and $1,454,531
      in fiscal 2005. Uses of cash flow for investing activities include capital
      expenditures for the acquisition of plant and equipment. The uses of cash flow
      were offset by the sale of certain plant and equipment. </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">Net
      cash
      flow used in financing activities was $3,443,540 in fiscal 2004 and $756,134
      in
      fiscal 2005. The decrease in net cash flow was mainly due to the decrease in
      repayment of obligations under capital leases. Significant production lines
      and
      equipment were acquired under capital leases in fiscal 2004 and most of the
      leases<font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#8217;</font> terms
      were for one year.</font></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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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: 10pt; 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="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>Six
      Months Ended June 30, 2006</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
      cash
      flow provided by operating activities was $1,382,470 for the six months ended
      June 30, 2006 and $1,024,112 for the six months ended June 30, 2005. The
      increase of net cash flow provided by operating activities for the six months
      ended June 30, 2006 was mainly due to Infosmart paid significant amount of
      legal
      and professional fees relating to the listing exercise during the six months
      ended June 30, 2005, which was included in prepaid expenses. Another factor
      contributing to the increase in the net cash flow by operating activities was
      the increase in trade payable. Material costs were rising in 2005, but Infosmart
      purchased in bulk when prices dropped and negotiated lower prices from material
      suppliers by offering shorter payment terms. These arrangements also caused
      a
      decrease in net cash flow because Infosmart was paying suppliers at a much
      faster rate. However, Infosmart was able to secure materials at lower prices
      in
      a volatile market, thereby minimizing the overall material costs. During the
      six
      months ended June 30, 2006, the supply of material was more stable and hence,
      Infosmart was not required to settle with suppliers as fast as in 2005. The
      above factors eliminate the effect of the increase in trade
      receivables.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Net
      cash
      flow used in investing activities was $1,385,893 and $226,643 for the six months
      ended June 30, 2006 and 2005 respectively. Uses of cash flow for investing
      activities relate to the capital expenditures for the acquisition of plant
      and
      equipment. </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">Net
      cash
      flow provided by financing activities was $37,686 for the six months ended
      June
      30, 2006. Compared with the net cash flow used in financing activities of
      $285,899 for the six months ended June 30, 2005, the increase of net cash flow
      was mainly due to the decrease in repayment of obligations under capital leases.
      The capital leases terms were matured during the period ended June 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>Contractual
      Obligations and Off-Balance Sheet Arrangements</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"><em>Contractual
      Obligations</em></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">We
      have
      certain fixed contractual obligations and commitments that include future
      estimated payments. Changes in our business needs, cancellation provisions,
      changing interest rates, and other factors may result in actual payments
      differing from the estimates. We cannot provide certainty regarding the timing
      and amounts of payments. We have presented below a summary of the most
      significant assumptions used in our determination of amounts presented in the
      tables, in order to assist in the review of this information within the context
      of our consolidated financial position, results of operations, and 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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      following tables summarize our contractual obligations as of December 31,
      2005</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
      and the
      effect these obligations are expected to have on our liquidity and cash flows
      in
      future periods.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

          <tr>
            <td align="left" valign="bottom" width="43%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" colspan="14" valign="bottom" width="54%" style="border-bottom: black thin solid;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><strong>Payments
                Due by Period</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="43%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><strong>Total</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><strong>Less
                than 1 year</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><strong>1-3
                Years</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><strong>3-5
                Years</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><strong>5
                Years +</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
            <td width="2%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" colspan="14" valign="bottom" width="54%" style="border-bottom: medium none;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><strong>In
                Thousands</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="43%" style="border-bottom: #ffffff thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><u><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Contractual
                Obligations</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">:</font></u></div>
            </td>
            <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
          </tr>
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            <td align="left" valign="bottom" width="43%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Bank
                Indebtedness</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">$</font></div>
            </td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,462</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="9%" 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">4,462</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" 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="9%" 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 style="DISPLAY: inline; FONT-FAMILY: Times New Roman">&#8212;</font></font></div>
            </td>
            <td align="left" valign="bottom" width="1%" 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="9%" 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">&#8212;</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" 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="9%" 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">&#8212;</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="43%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                Indebtedness</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">$</font></div>
            </td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,747</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,997</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,604</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">146</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</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="43%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Capital
                Lease Obligations</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">$</font></div>
            </td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">53</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="9%" 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">53</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" 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="9%" 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">&#8212;</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" 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="9%" 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">&#8212;</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" 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="9%" 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">&#8212;</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="43%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operating
                Leases </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">$</font></div>
            </td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">70</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">70</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</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="43%" style="border-bottom: #ccffcc solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purchase
                Obligations</font></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="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" 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="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" 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="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" 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="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" 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="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#8212;</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="43%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                Contractual Obligations:</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">$</font></div>
            </td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,332</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">6,582</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,604</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">146</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="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">Bank
      indebtedness consists of secured and unsecured borrowings from Infosmart&#8217;s
      banking facilities including letters of credit, bank overdrafts, and
      non-recurring bank 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">Other
      indebtedness consists of loans and debt financing from independent third parties
      for working capital and the acquisition of DVDR production lines and
      equipment.</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: 10pt; FONT-FAMILY: ">38</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
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        <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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Capital
      lease obligations consist of leases for </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">certain
      production lines and equipment under non-cancelable lease
      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">Operating
      lease amounts include leases for office and factory premises under various
      non-cancelable operating lease agreements that expire at various dates through
      years 2004 to 2006, with an option to renew the lease. All leases are on a
      fixed
      repayment basis. None of the leases includes contingent rentals.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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>Off-balance
      Sheet Arrangements</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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
      bank
      guarantee was given by a bank to a electric utility company on Infosmart&#8217;s
      behalf. This guarantee exempted Infosmart from the obligation of paying a
      deposit required by the electric utility company. This off-balance sheet
      arrangement has no effect on the Infosmart&#8217;s liquidity, capital resources,
      market risk support or credit risk support, other than allowing Infosmart to
      retain the HK$1.1 million deposit that would have been required by the utility
      company. Infosmart is not aware of any events, demands, commitments, trends
      or
      uncertainties that will result in of reasonably likely result in the termination
      of this arrangement.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Other
      than the arrangement described above, we have not entered into any other
      financial guarantees or other commitments to guarantee the payment obligations
      of any third parties. We have not entered into any derivative contracts that
      are
      indexed to our shares and classified as shareholder&#8217;s equity or that are not
      reflected in our consolidated financial statements. Furthermore, we do not
      have
      any retained or contingent interest in assets transferred to an unconsolidated
      entity that serves as credit, liquidity or market risk support to such entity.
      We do not have any variable interest in any unconsolidated entity that provides
      financing, liquidity, market risk or credit support to us or engages in leasing,
      hedging or research and development services with us. </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"><strong>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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
      a
      description of out related party transactions see the section of the Memorandum
      entitled &#8220;Certain Relationships and Related Transactions.&#8221; </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Quantitative
      and Qualitative Disclosures about Market Risk</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"><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">Infosmart
      does not use derivative financial instruments in its investment portfolio and
      have no foreign exchange contracts. Infosmart&#8217;s financial instruments consist of
      cash and cash equivalents, trade accounts receivable, accounts payable and
      long-term obligations. Infosmart considers investments in highly liquid
      instruments purchased with a remaining maturity of 90 days or less at the date
      of purchase to be cash equivalents. However, in order to manage the foreign
      exchange risks, Infosmart will engage in hedging activities to manage our
      financial exposure related to currency exchange fluctuation. In these hedging
      activities, we might use fixed-price, forward, futures, financial swaps and
      option contracts traded in the over-the-counter markets or on exchanges, as
      well
      as long-term structured transactions when feasible.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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"><em>Interest
      Rates</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      Our
      exposure to market risk for changes in interest rates relates primarily to
      our
      short-term investments and short-term obligations; thus, fluctuations in
      interest rates would not have a material impact on the fair value of these
      securities. At June 30, 2006, Infosmart had approximately $188,219 in cash
      and
      cash equivalents. A hypothetical 10% increase or decrease in interest rates
      would not have a material impact on our earnings or loss, or the fair market
      value or cash flows of these instruments.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Foreign
      Exchange Rates</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      The
      majority of our revenues derived and expenses and liabilities incurred are
      in
      Hong Kong dollars. Thus, our revenues and operating results may be impacted
      by
      exchange rate fluctuations in the currencies of Hong Kong. We have not tried
      to
      reduce our exposure to exchange rate fluctuations by using hedging transactions.
      However, we may choose to do so in the future. We may not be able to do this
      successfully. Accordingly, we may experience economic losses and negative
      impacts on earnings and equity as a result of foreign exchange rate
      fluctuations. The effect of foreign exchange rate fluctuation during the year
      ended December&#160;31, 2005 was not material to us.</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"><strong>DESCRIPTION
      OF PROPERTY </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="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><em>Hong
      Kong offices and facilities</em></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">Our
      main
      offices and manufacturing facilities are located in Hong Kong. The Company
      stores and delivers products from its manufacturing facilities located in Chai
      Wan and Tsuen Wan, New Territories, Hong Kong. Infosmart has placed a high
      priority on operating a safe, clean, and well-maintained distribution facility,
      which is a key selling point for many customers. The Company&#8217;s prime location
      provides excellent proximity for shipping products to a diverse customer base
      located in all regions of the world.</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: 10pt; 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">&#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
      total
      approximate square footage of our facilities is summarized as follows:
</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" width="100%">

          <tr>
            <td valign="top" width="24%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Location</strong></font></div>
            </td>
            <td width="2%">&#160;</td>
            <td valign="top" width="21%" 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>Principal
                Activities</strong></font></div>
            </td>
            <td width="2%">&#160;</td>
            <td valign="top" 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>Area
                (sq. feet)</strong></font></div>
            </td>
            <td width="2%">&#160;</td>
            <td valign="top" width="21%" 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>Lease
                Expiration Date</strong></font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="24%" 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">Fortune
                Factory Building, </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">40
                Lee Chung Street</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">Chai
                Wan, Hong Kong.</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="21%" 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">Administrative
                offices, Manufacturing facility (Factories 1 &amp; 2)</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td valign="top" width="13%" 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">31,186
                sq. ft.</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="21%" 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">Lease
                for 7,500 sq. ft. expires December 2006; and </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Lease
                for 26,686 sq. ft. expires in December 2007</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="24%">&#160;</td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="21%">&#160;</td>
            <td width="2%">&#160;</td>
            <td valign="top" width="13%">&#160;</td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="21%">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="24%" 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">5/F.,
                QPL Industrial Building, 126-140 Texaco Road,</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">Tsuen
                Wan, New Territories, Hong Kong</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="21%" 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">Manufacturing
                facility (Factory 3)</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td valign="top" width="13%" 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">40,000
                sq. ft.</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="21%" 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">March
                2009 (entered by Infoscience Holdings
                Limited)</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
      Company leases office and factory premises under various non-cancelable
      operating lease agreements that expire at various dates through years 2004
      to
      2006,</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">with
      an
      option to renew the lease. All leases are on a fixed repayment basis. None
      of
      the leases includes contingent rentals. Minimum future commitments under these
      agreements payable as of December 31, 2005 are as follows:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div align="center">
      <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="80%">

          <tr>
            <td align="left" valign="bottom" width="85%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Year
                ending December 31</font></div>
            </td>
            <td width="2%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="85%" 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 id="TAB1" style="MARGIN-LEFT: 9pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2006</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="11%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">69,515</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc solid;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Rental
      expense was $518,967 and $158,051 during 2005 and 2004, respectively.
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      believe that our existing facilities are well maintained and in good operating
      condition.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Brazil
      production facility</em></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">In
      the
      first quarter of 2006, Infosmart started the construction of the production
      facility in Brazil. Once the factory with the supporting infrastructure is
      ready, Infosmart will relocate twelve of its existing production lines from
      Factory 1 to Brazil in mid October 2006. Infosmart&#8217;s Brazilian production
      facility is located in Cama&#231;ari, State of Bahia, close to Salvador. The factory
      is approximately 1,800 sq. meters and can accommodate 26 production lines.
      Good
      progress had been made in the construction of the factory. Further, all licenses
      required for the facility have been obtained, an incentive program from the
      State of Bahia had been approved, and the factory and the warehouse have been
      leased. The construction costs for the Brazil factory are currently being
      financed through loans from Infosmart shareholders.</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 also uses a warehouse and the sales office, which are located in S&#227;o
      Paulo and is where most of the current commercial activities are conducted.
      Both
      the warehouse and the sales office are owned by our local Brazilian partner
      and
      we are not obligated pay rent for using both of these premises. The warehouse
      is
      located at Rua Santa Clara, Br&#225;s, while the sales office is located at Rua
      Catumbi, Bel&#233;m, both in S&#227;o Paulo. </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
      total
      approximate square footage of our facilities is summarized as follows:
</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" width="100%">

          <tr>
            <td valign="top" width="24%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Location</strong></font></div>
            </td>
            <td width="2%">&#160;</td>
            <td valign="top" width="21%" 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>Principal
                Activities</strong></font></div>
            </td>
            <td width="2%">&#160;</td>
            <td valign="top" 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>Area
                (sq. feet)</strong></font></div>
            </td>
            <td width="2%">&#160;</td>
            <td valign="top" width="21%" 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>Lease
                Expiration Date</strong></font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="24%" 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">Loteamento
                Poloplast Quadra D lote 5, galpoes C, D, and E, Camacari, State of
                Bahia,
                Brazil - BA, CEP 42801-170</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="21%" 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">Manufacturing
                facility </font></div>
            </td>
            <td width="2%">&#160;</td>
            <td valign="top" width="13%" 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">25,000
                sq. ft.</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="21%" 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">March
                31, 2009, with options for renewal.</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="24%">&#160;</td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="21%">&#160;</td>
            <td width="2%">&#160;</td>
            <td valign="top" width="13%">&#160;</td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="21%">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="24%" 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">Rua
                Catumbi, Belem, Sao Paulo, Brazil</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="21%" 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">Warehouse</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td valign="top" width="13%" 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">15,000
                sq. ft.</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="21%" 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">None.</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">&#160;</div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="24%">&#160;</td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="21%">&#160;</td>
            <td width="2%">&#160;</td>
            <td valign="top" width="13%">&#160;</td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="21%">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="24%" 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">Rua
                Santa Clara, No 272/274, Bras, Sao Paulo, Brazil - SP, CEP
                03025-030</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="21%" 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
                Office</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td valign="top" width="13%" 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">2,000
                sq. ft.</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="21%" 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">None.</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 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: 10pt; 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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>MANAGEMENT
      </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"><strong>Appointment
      of New Directors </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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      connection with the Exchange Agreement, Cyber appointed four new directors
      to
      its board of directors. Furthermore, concurrent with the closing of the Exchange
      Agreement, Mr.&#160;Kevin R. Keating, the former President, Treasurer and
      Secretary of Cyber, resigned from these positions. Immediately following the
      resignation of Mr.&#160;Keating, Mr.&#160;Kwok Chung (&#8220;Andy Kwok&#8221;) was appointed
      Chief Executive Officer and President, and Ms.&#160;Sze Po Nei (&#8220;Pauline Sze&#8221;)
      was appointed Chief Financial Officer, Treasurer and Secretary, respectively,
      of
      Cyber. </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
      following table sets forth the names and ages of our directors and executive
      officers, as of the date of this current report: </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 valign="top" width="24%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Name</strong></font></div>
            </td>
            <td valign="top" width="3%">&#160;</td>
            <td valign="top" width="10%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Age</strong></font></div>
            </td>
            <td valign="top" width="3%">&#160;</td>
            <td valign="top" width="38%" 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="24%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Kwok
                Chung (&#8220;Andy Kwok&#8221;)</font></div>
            </td>
            <td align="left" valign="top" width="3%">&#160;</td>
            <td valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">39</font></div>
            </td>
            <td align="left" valign="top" width="3%">&#160;</td>
            <td align="left" valign="top" width="38%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
                Executive Officer, President and Director</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="24%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sze
                Po Nei (&#8220;Pauline Sze&#8221;)</font></div>
            </td>
            <td align="left" valign="top" width="3%">&#160;</td>
            <td valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">33</font></div>
            </td>
            <td align="left" valign="top" width="3%">&#160;</td>
            <td align="left" valign="top" width="38%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
                Financial Officer, Treasurer, Secretary and Director</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="24%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chang
                Chung Yuen, Andrew (&#8220;Andrew Chang&#8221;)</font></div>
            </td>
            <td align="left" valign="top" width="3%">&#160;</td>
            <td valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">36</font></div>
            </td>
            <td align="left" valign="top" width="3%">&#160;</td>
            <td align="left" valign="top" width="38%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chairman
                of the Board of Directors</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="24%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Godwin
                Wong</font></div>
            </td>
            <td align="left" valign="top" width="3%">&#160;</td>
            <td valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">56</font></div>
            </td>
            <td align="left" valign="top" width="3%">&#160;</td>
            <td align="left" valign="middle" width="38%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Director</font></div>
            </td>
          </tr>

      </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 style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Current
      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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Andy
      Kwok, </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
      Executive Officer, President and Director, has over 12 years experience in
      the
      optical storage media industry. In 1993, he began his international sales career
      with a subsidiary of Sonopress AG, one of the world&#8217;s top three pre-recorded
      CD/DVD manufacturers, and gained significant experience of the dynamics of
      storage media markets around the world. In 1997, Mr. Kwok co-founded Mega Winner
      (HK), Ltd. (&#8220;Mega Winner&#8221;), a leading CD manufacturer, before spotting the DVDR
      market opportunity and co-founding Infosmart in 2002. He served as Chairman
      of
      the Hong Kong Optical Disc Manufacturing and Technology Association from 2000
      to
      2002. He received his Bachelor of Mathematics degree from the Chinese University
      of Hong Kong. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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"><strong>Pauline
      Sze, </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
      Financial Officer, Treasurer, Secretary, and Director, co-founded InfoSmart
      in
      2002 and oversees its finance, human resources, accounting, purchasing and
      shipping departments. Before joining InfoSmart, she worked with Wing Shing
      Cassette Manufacturing Co. Ltd. between 1996 and 1998 and witnessed the
      evolution of media production from cassette to VCD to DVDR. She established
      her
      own company, Mega Century, with her spouse in 1998 to produce VCDs. Ms. Sze&#8217;s
      relationship with and ownership in Mega Century were completely terminated
      in
      February 2005. Ms. Sze received her degree in Business Administration from
      the
      British Columbian Institute of Technology in Canada. Ms. Sze is the wife of
      Mr.
      Wong Hiu Ming (&#8220;Tony Wong&#8221;), who is a non-executive member of the Board of
      Directors of Prime, Infosmart, IS International, IS Technology, and IS Media.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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"><strong>Andrew
      Chang, </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chairman
      of the Board of Directors, is a seasoned entrepreneur. In 1995, he founded
      Hang
      Tat International (HK) Ltd., a telecommunication devices manufacturing business,
      which today employs 1,400 workers and has revenues of $15 million. Hang Tat
      International (HK) Ltd. exports most of its output to the U.S. and its major
      customers include Family Dollar, Best Buy, Circuit City, Southern Telecom and
      jWIN Electronics. Mr. Chang holds a Master of Economics degree from the
      University of Macquaire, Australia and a Bachelor of Commerce degree majoring
      in
      accounting from the University of New South Wales, Australia. Mr. Chang is
      the
      cousin of Mr. Tony Wong, one of InfoSmart&#8217;s non-executive
      directors.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">41</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">&#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"><strong>Godwin
      Wong</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
      Director, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">has
      been
      on the faculty </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">of
      the
      Haas School of Business at the University of California, Berkeley for twenty
      years. He was raised </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">in
      Hong
      Kong and was educated in U.S.A. with Ph.D. from Harvard University, Master&#8217;s
      from U.C.L.A. and baccalaureate from the University of Wisconsin. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dr.
      Wong
      serves on the Board of Directors of the United Commercial Bank, other NASDAQ
      companies and certain technology ventures in the San Francisco area and
      overseas, and previously for other California financial institutions. He has
      been advisor/consultant, and specialist/strategist to various organizations,
      corporations, government agencies, business enterprises in the U.S., Canada,
      Europe and Asia. Dr. Wong has been appointed Chief Expert Advisor for the City
      Government of Beijing HaiDian, where the Silicon Valley of China, Zhong Guan
      Cun, is situated. He also serves as director of one of the top ten software
      companies in Shanghai.</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">He
      has
      assisted companies in the negotiation of businesses transactions, technology
      transfer, mergers and acquisitions. Representing various investment groups,
      he
      has run his own San Francisco management companies in real estate, consulting,
      and investment management with over 35 employees. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">He
      speaks, reads and writes fluent Chinese in four dialects. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">To
      the
      best of Cyber&#8217;s knowledge, none of the officers or directors appointed following
      the Closing, including any of their affiliates, currently beneficially own
      any
      equity securities or rights to acquire any securities of Cyber, and no such
      persons have been involved in any transaction with Cyber or any of its
      directors, executive officers or affiliates that is required to be disclosed
      pursuant to the rules and regulations of the SEC, other than with respect to
      the
      transactions that have been described herein. To the best of Cyber&#8217;s knowledge,
      none of the officers and directors appointed following the Closing have been
      convicted in a criminal proceeding, excluding traffic violations or similar
      misdemeanors, nor have they been a party to any judicial or administrative
      proceeding during the past five years, except for matters that were dismissed
      without sanction or settlement, that resulted in a judgment, decree or final
      order enjoining the person from future violations of, or prohibiting activities
      subject to, federal or state securities laws, or a finding of any violation
      of
      federal or state securities laws.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mr.
      Andy
      Kwok is a 25% shareholder and director of Mega Winner (Hong Kong), Ltd. (&#8220;Mega
      Winner&#8221;), a corporation incorporated under the laws of the Hong Kong Special
      Administrative Region of the People&#8217;s Republic of China which is currently
      subject to a bankruptcy lawsuit filed against it by Media Lab Ltd., an
      Australian company in Hong Kong&#8217;s High court on February 11, 2004. The court has
      ruled for Mega Winner to be wind-up (Companies Winding-up No. 1360 of 2003).
      A
      Liquidator was appointed on March 1, 2004 to wind-up Mega Winner. </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="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Board
      of Directors </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
      board
      of directors is currently composed of 4 members, all of whom are Infosmart
      employees and/or directors, except for Godwin Wong. Godwin Wong is an
      independent director designated by KI Equity to serve as a director for the
      one
      year period following Closing (&#8220;KI Equity Director&#8221;). Andy Kwok, Pauline Sze and
      Andrew Chang (collectively, the &#8220;Management Directors&#8221;) will have the right to
      appoint three persons as independent directors, however, these board positions
      are expected to be filled following the Closing. The Voting Agreement will
      require KI Equity and the Infosmart Shareholders to vote their Cyber shares
      for
      the above director designees.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mr.&#160;Chang
      has been elected as the Chairman of the Board of Directors. In this capacity
      he
      is responsible for meeting with the Chief Executive Officer to review financial
      and operating results, agendas and minutes of board and committee meetings,
      and
      presiding at the meetings of the committees of the board of directors.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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
      Management Directors have the right and intend to review and select additional
      candidates to serve on our board of directors. Currently, only Godwin Wong
      is
&#8220;independent,&#8221; within the meaning of the applicable federal securities laws.
      However, we expect to be able to attract and recruit additional candidates
      to
      serve on our board as independent directors, the timing of which will depend
      on
      the availability and willingness of qualified independent director candidates
      to
      serve in such capacity. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Board
      Committees </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      of
      this date, our board of directors has not appointed an audit committee or
      compensation committee, however, we are not currently required to have such
      committees. Accordingly, we do not have an &#8220;audit committee financial expert&#8221; as
      such term is defined in the rules promulgated under the Securities Act of 1933
      and the Securities and Exchange Act of 1934. The functions ordinarily handled
      by
      these committees are currently handled by our entire board of directors. Our
      Board of Directors intends, however, to review our governance structure and
      institute board committees as necessary and advisable in the future, to
      facilitate the management of our business. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; 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="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>No
      Code of Ethics</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
      code of
      ethics relates to written standards that are reasonably designed to deter
      wrongdoing and to promote:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 63pt;">&#160;</td>
              <td style="width: 18pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Honest
                  and ethical conduct, including the ethical handling of actual or
                  apparent
                  conflicts of interest between personal and professional
                  relationships;</font></div>
              </td>
            </tr>

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

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 63pt;">&#160;</td>
              <td style="width: 18pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Full,
                  fair, accurate, timely and understandable disclosure in reports
                  and
                  documents that are filed with, or submitted to, the SEC and in
                  other
                  public communications made by an
                  issuer;</font></div>
              </td>
            </tr>

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

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 63pt;">&#160;</td>
              <td style="width: 18pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Compliance
                  with applicable governmental laws, rules and
                  regulations;</font></div>
              </td>
            </tr>

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

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 63pt;">&#160;</td>
              <td style="width: 18pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  prompt internal reporting of violations of the code to an appropriate
                  person or persons identified in the code;
                  and</font></div>
              </td>
            </tr>

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

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 63pt;">&#160;</td>
              <td style="width: 18pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accountability
                  for adherence to the code.</font></div>
              </td>
            </tr>

        </table>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cyber
      has
      not adopted a code of ethics that applies to the Chief Executive Officer and
      Chief Financial Officer because it had no meaningful operations prior to the
      Closing. However, Cyber plans to adopt a code of ethics after the Closing.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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>Conflicts
      of Interest</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certain
      conflicts of interest existed at May 31, 2006 and may continue to exist between
      Cyber and its officers and directors due to the fact that each has other
      business interests to which they devote their primary attention. Each officer
      and director may continue to do so notwithstanding the fact that management
      time
      should be devoted to the business of Cyber. Certain conflicts of interest may
      exist between Cyber and its management, and conflicts may develop in the future.
      Cyber has not established policies or procedures for the resolution of current
      or potential conflicts of interest between Cyber, its officers and directors
      or
      affiliated entities. There can be no assurance that management will resolve
      all
      conflicts of interest in favor of Cyber, and conflicts of interest may arise
      that can be resolved only through the exercise by management their best judgment
      as may be consistent with their fiduciary duties. Management will try to resolve
      conflicts to the best advantage of all concerned, but there may be times when
      an
      acquisition opportunity is given to another entity to the disadvantage of
      Cyber&#8217;s stockholders and for which there will be no recourse. </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
      part
      of the Exchange, Cyber engaged Keating Securities, LLC, an affiliate of Keating
      Investments, LLC, the managing member of Cyber&#8217;s controlling stockholder, to act
      as a financial advisor in connection with the Exchange for which it will earn
      a
      $450,000 advisory fee upon the Closing. Margie L. Blackwell and Luca Toscani
      were directors of Cyber who resigned on the Closing Date in connection with
      Exchange and are each members of Keating Investments, LLC, and Jeff L. Andrews
      was also a director of&#160;Cyber, who resigned on the Closing Date in
      connection with the Exchange and is a Vice President of Keating Investments,
      LLC.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Board
      Meetings and Committees</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cyber&#8217;s
      Board of Directors held five special meetings of directors during the fiscal
      year ended May 31, 2006. In addition, the board of directors took a number
      of
      actions by written consent of all of the directors. Directors may be paid their
      expenses, if any, of attendance at such meeting of the Board of Directors,
      and
      may be paid a fixed sum for attendance at each meeting of the Board of Directors
      or a stated salary as Director. No such payment shall preclude any Director
      from
      serving Cyber in any other capacity and receiving compensation therefore except
      as otherwise provided under applicable law. Except as set forth below, no
      compensation has been paid to the Directors. The Board of Directors may
      designate from among its members an executive committee and one or more other
      committees. No such committees are currently appointed or in place.
</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">Cyber
      is
      not a "listed company" under SEC rules and is therefore not required to have
      a
      compensation committee or a nominating committee. Cyber does not currently
      have
      a compensation committee but it intends to appoint such committee after the
      Closing.</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">Cyber
      neither has a nominating committee for persons to be proposed as directors
      for
      election to the Board of Directors nor a formal method of communicating nominees
      from shareholders. Cyber does not have any restrictions on shareholder
      nominations under its certificate of incorporation or by-laws. The only
      restrictions are those applicable generally under California law and the federal
      proxy rules. Currently, the entire Board of Directors decides on nominees,
      on
      the recommendation of one or more members of the Board of Directors. Only one
      of
      the members of the Board of Directors, Godwin Wong, is "independent." The Board
      of Directors will consider suggestions from individual shareholders, subject
      to
      evaluation of the person's merits. Stockholders may communicate nominee
      suggestions directly to any of the Board members, accompanied by biographical
      details and a statement of support for the nominees. The suggested nominee
      must
      also provide a statement of consent to being considered for nomination. Although
      there are no formal criteria for nominees, Cyber&#8217;s Board of Directors believes
      that persons should be actively engaged in business endeavors, have a financial
      background, and be familiar with acquisition strategies and money
      management.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; 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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Board
      of Directors has not to adopted a formal methodology for communications from
      shareholders but plans to adopt such methodology after the Closing.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Cyber
      does not have a policy regarding the attendance of board members at the annual
      meeting of shareholders. At the last annual meeting of shareholders held May
      16,
      2005, one member of the board was in attendance.</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>Compensation
      Committee Interlocks and Insider Participation </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: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">No
      interlocking relationship exists between our board of directors and the board
      of
      directors or compensation committee of any other company, nor has any
      interlocking relationship existed in the past. </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"><strong>EXECUTIVE
      COMPENSATION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Summary
      of cash and other compensation</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      following Executive Compensation Chart highlights the compensation for Cyber&#8217;s
      executive officers. No other executive officers received salary and bonus in
      excess of $100,000 for the prior three fiscal years.</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" width="100%">

          <tr>
            <td align="left" colspan="9" valign="top" width="51%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td width="1%">&#160;</td>
            <td colspan="5" valign="middle" width="34%" 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">Long
                Term Compensation</font></div>
            </td>
            <td width="1%">&#160;</td>
          </tr>
          <tr>
            <td align="left" colspan="3" valign="top" width="18%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td width="1%">&#160;</td>
            <td colspan="5" valign="bottom" width="32%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Annual
                Compensation</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td colspan="3" valign="bottom" width="25%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Awards</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td valign="bottom" width="8%" 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">Payouts</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td align="left" valign="top" width="12%" style="border-bottom: #ffffff thin solid;">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="11%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Name</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">and</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">Principal</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">Position</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td valign="bottom" width="6%" 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">Year</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td valign="bottom" width="11%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Salary
                </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">($)</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td valign="bottom" width="7%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Bonus
                ($)</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td valign="bottom" width="12%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other</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">Annual
                Compensation ($) </font></div>
            </td>
            <td width="1%">&#160;</td>
            <td valign="bottom" width="13%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Restricted</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
                Award(s)</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">($)</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td valign="bottom" width="11%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Securities</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">Underlying
                Options/</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">SARs
                (#) (#)</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td valign="bottom" width="8%" 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">LTIP</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">Payouts
                ($)</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td valign="bottom" width="12%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
                Other</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Compensation
                </font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">($)</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="11%" 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">Frank
                Yuan (former CEO and President) (1)</font></div>
            </td>
            <td width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td valign="top" width="6%" 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">2005</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">2004</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">2003</font></div>
            </td>
            <td width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td valign="top" width="11%" 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">$137,500</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">$150,000</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">$150,000</font></div>
            </td>
            <td width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td valign="top" width="7%" 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</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">$0</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">$0</font></div>
            </td>
            <td width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td valign="top" width="12%" 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</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">$0</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">$0</font></div>
            </td>
            <td width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td valign="top" width="13%" 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">$42,943
                (2)</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">N/A</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">N/A</font></div>
            </td>
            <td width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td valign="top" width="11%" 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">N/A</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">185,000
                (3)</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;
                5,000 (4)</font></div>
            </td>
            <td width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td valign="top" width="8%" 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">N/A</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">N/A</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">N/A</font></div>
            </td>
            <td width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td valign="top" width="12%" 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">N/A</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">N/A</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">N/A</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="11%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Kevin
                R. Keating</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">(former
                President, Secretary and Treasurer) (5)</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td 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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2005</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">2004</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">2003</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="11%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$0</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">$0</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">$0</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="7%" 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">$0</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">$0</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">$0</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="12%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$0</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">$0</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">$0</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="13%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">N/A</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">N/A</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">N/A</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="11%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">N/A</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">N/A</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">N/A</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="8%" 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">N/A</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">N/A</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">N/A</font></div>
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            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="12%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$12,500
                (6)</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">N/A</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">N/A</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>
      <hr style="COLOR: black" align="left" noshade size="2" width="12%">
    </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: 27pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mr.
                Frank Yuan resigned as Cybers&#8217; Chairman, Chief Executive Officer,
                President and Chief Financial Officer on September 30, 2005.
                </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">
      <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: 27pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consists
                of grants of stock options under Cyber&#8217;s 2001 Stock Option Plan. All the
                stock options were cancelled during fiscal
                2005.</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">
      <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: 27pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consists
                of value of stock bonus consisting of 38,862 shares of Cyber&#8217;s common
                stock.</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">
      <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: 27pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(4)</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consists
                of value of stock bonus.</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">
      <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: 27pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(5)</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Kevin
                R. Keating was appointed as Cybers&#8217; President, Secretary, Treasurer and
                Director on September 30, 2005. He resigned from such positions at
                the
                Closing.</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">
      <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: 27pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(6)</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
                October 5, 2005, Cyber issued 250,000 shares of its common stock
                to Kevin
                R. Keating for services rendered to Cyber valued at $12,500, or $0.05
                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">&#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: 10pt; FONT-FAMILY: ">44</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      following summary compensation table indicates the cash and non-cash
      compensation earned during the fiscal year ended December&#160;31, 2005 by the
      Chief Executive Officer and each of our other four highest paid executives
      of
      our predecessor, Infosmart, whose total compensation exceeded $100,000 during
      the fiscal year ended December&#160;31, 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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Summary
      compensation table </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div align="left">
      <table border="0" cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" colspan="9" valign="top" width="51%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td width="1%">&#160;</td>
            <td colspan="5" valign="middle" width="34%" 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">Long
                Term Compensation</font></div>
            </td>
            <td width="1%">&#160;</td>
          </tr>
          <tr>
            <td align="left" colspan="3" valign="top" width="18%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td width="1%">&#160;</td>
            <td colspan="5" valign="bottom" width="32%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Annual
                Compensation</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td colspan="3" valign="bottom" width="25%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Awards</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td valign="bottom" width="8%" 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">Payouts</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td align="left" valign="top" width="12%" style="border-bottom: #ffffff thin solid;">&#160;</td>
          </tr>
          <tr>
            <td valign="bottom" width="11%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Name</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">and</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">Principal</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">Position</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td valign="bottom" width="6%" 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">Year</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td valign="bottom" width="11%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Salary
                </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">($)
                (1)</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td valign="bottom" width="7%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Bonus
                ($)</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td valign="bottom" width="12%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other</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">Annual
                Compensation ($) (1)</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td valign="bottom" width="13%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Restricted</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
                Award(s)</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">($)</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td valign="bottom" width="11%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Securities</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">Underlying
                Options/</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">SARs
                (#) (#)</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td valign="bottom" width="8%" 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>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">LTIP</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">Payouts
                ($)</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td valign="bottom" width="12%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
                Other</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Compensation
                </font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">($)</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="11%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Andy
                Kwok, CEO and Director </font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td 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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2005</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">2004</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">2003</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="11%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$30,769</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">$30,769</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">$12,820</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="7%" 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">$0</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">$0</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">$0</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="12%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$61,538</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">$46,153</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">$19,230</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="13%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">N/A</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">N/A</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">N/A</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="11%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">N/A</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">N/A</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">N/A</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="8%" 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">N/A</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">N/A</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">N/A</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="12%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">N/A</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">N/A</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">N/A</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="11%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pauline
                Sze,</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">CFO
                and Director </font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td 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="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2005</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">2004</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">2003</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="11%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$30,769</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">$30,769</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$&#160;
                6,410</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="7%" 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">$0</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">$0</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">$0</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="12%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$46,153</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">$46,153</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">$12,820</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="13%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">N/A</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">N/A</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">N/A</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="11%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">N/A</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">N/A</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">N/A</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="8%" 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">N/A</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">N/A</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">N/A</font></div>
            </td>
            <td width="1%" style="border-bottom: medium none;">&#160;</td>
            <td valign="top" width="12%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">N/A</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">N/A</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">N/A</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>
      <hr style="COLOR: black" align="left" noshade size="2" width="12%">
    </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: 27pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Salary
                and other annual compensation paid to Mr. Kwok and Ms. Sze are expressed
                in U.S. Dollars based on the interbank exchange rate of 7.75802 Hong
                Kong
                Dollars for each 1.00 U.S.&#160;Dollar, on June&#160;1, 2006. Other annual
                compensation consists of a housing allowance that will no longer
                be paid
                to Mr. Kwok and Ms. Sze in 2006. </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"><strong>Director
      Compensation and Stock Option Grants</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">Prior
      to
      the share exchange transaction, Cyber compensated its directors with stock
      options for their service as directors. Prior stock options granted and vested
      under Cyber&#8217;s 1996, 1999 and 2001 Stock Option Plans were cancelled during
      fiscal 2005. The value of the stock bonus issued to the directors of Cyber
      effective May 31, 2005 approximated $7,000.</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">Except
      as
      set forth above, there was no other compensation paid to Frank Yuan, Kevin
      R.
      Keating or any other director of Cyber during the fiscal year ended May 31,
      2006. There were no option grants to Frank Yuan, Kevin R. Keating or any other
      director of Cyber during the fiscal year ended May 31, 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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to an action by Cyber&#8217;s board on August 24, 2005, Cyber cancelled all
      outstanding stock options granted under Cyber&#8217;s 1996, 1999 and 2001 Stock Option
      Plans (&#8220;Option Plans&#8221;) and further terminated each of Option Plans. Certain
      option holders agreed to the cancellation of their options, and Frank Yuan
      agreed to assume all obligations of Cyber with respect to options to purchase
      36,025 shares of Cyber&#8217;s common stock held by certain employees and consultants
      who did not agree to cancel their options. </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">Effective
      June&#160;22, 2006, the board of directors terminated and discontinued the
      Company&#8217;s 1998 Incentive Stock Option Plan and 1998 Stock Bonus Plan. The board
      of directors plans to evaluate the Company&#8217;s need for equity incentive plans,
      and may institute such plans in the future if the board determines they are
      needed for compensation of its officers, directors and employees, or that
      formation of such plans is otherwise in the best interests 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">No
      directors of Infosmart received any compensation for their service on
      Infosmart&#8217;s board. Infosmart, IS International, IS Technology, IS Media and
      Discobras have no stock options issued or outstanding and do not maintain any
      stock option or equity incentive plans.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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>Employment
      Agreements </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 are summaries of Infosmart&#8217;s employment agreements with its executive
      officers and/or directors which we plan to assume following the Closing of
      the
      Exchange: </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">Infosmart
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">entered
      into a Letter of Appointment agreement with Mr. Andy Kwok on June 1, 2006.
      Effective June 1, 2006, Mr. Kwok was appointed Chief Executive Officer and
      Director of InfoSmart and his base monthly salary is HK$60,000 per month or
      approximately US$7,772 per month. Such salary is subject to an annual review
      by
      the Board of Directors (&#8220;Board&#8221;) at a time determined by the Board. Under the
      terms of the agreement, Mr. Kwok is also entitled to receive reimbursements
      for
      all reasonable business, office personnel, company-related entertainment and
      travel expenses that he incurs or he pays for on behalf 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 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: 10pt; 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="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">Infosmart
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">entered
      into a Letter of Appointment agreement with Mr. Andrew Chang on July 1, 2006.
      Effective July 1, 2006, Mr. Chang was appointed Chairman and Director of
      InfoSmart and his base monthly salary is HK$50,000 per month or approximately
      US$6,435 per month. Such salary is subject to an annual review by the Board
      of
      Directors (&#8220;Board&#8221;) at a time determined by the Board. Under the terms of the
      agreement, Mr. Chang is also entitled to receive reimbursements for all
      reasonable business, office personnel, company-related entertainment and travel
      expenses that he incurs or he pays for on behalf 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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Infosmart
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">entered
      into a Letter of Appointment agreement with Ms. Pauline Sze on June 1, 2006.
      Effective June 1, 2006, Mr. Sze was appointed Chief Financial Officer and
      Director of InfoSmart and his base monthly salary is HK$50,000 per month or
      approximately US$6,435 per month. Such salary is subject to an annual review
      by
      the Board of Directors (&#8220;Board&#8221;) at a time determined by the Board. Under the
      terms of the agreement, Ms. Sze is also entitled to receive reimbursements
      for
      all reasonable business, office personnel, company-related entertainment and
      travel expenses that she incurs or she pays for on behalf 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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
      of
      the above-described Letters of Appointment agreements state the officer and/or
      directors employment may be terminated immediately, without Company prior notice
      or payment in lieu of notice if at any time the officer and or director (1)
      becomes physically or mentally disabled whether totally or partially so that
      he
      is substantially unable to perform his duties for a period of or for 30 days
      in
      the aggregate in any period of six consecutive months, (2) is convicted of
      a
      criminal offense, except one which in the reasonable of the Board does not
      affect his position with the Company at the time of such conviction, (3) commits
      repeated or continued (after warning) any persistent or material breach of
      the
      employment agreement; (4) is guilty of willful neglect in discharging his duties
      or commits any grave misconduct which in the absolute opinion of the Board
      tends
      to bring himself or the Company into disrepute; or (5) commits an act of
      bankruptcy or compounded with his creditors generally or is guilty of conduct
      which would make his continued appointment prejudicial to the interests of
      the
      Company. Further, the agreements provide for employee insurance, mandatory
      provident fund benefits and, after completion of the three-month probation
      period, medical insurance. These agreements also contain restrictive covenants
      preventing competition with Infosmart during their employment and for a period
      of 12 months after termination, and also covenants preventing the use of
      confidential business information, except in connection with the performance
      of
      their duties for the Company, during or at any time after termination of their
      employment.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">46</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECURITY
      OWNERSHIP PRIOR TO CHANGE OF CONTROL </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="center"><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 Cyber&#8217;s common stock
      beneficially owned on August 15, 2006</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
      for (i)
      each shareholder Cyber knows to be the beneficial owner of 5% or more of its
      outstanding common stock, (ii) each of Cyber&#8217;s executive officers and directors,
      and (iii) all executive officers and directors as a group. 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. To the best of Cyber&#8217;s knowledge, all
      persons named have sole voting and investment power with respect to such shares,
      except as otherwise noted. Except as set forth in this Information Statement,
      there are not any pending or anticipated arrangements that may cause a change
      in
      control of Cyber. At August 15, 2006, 10,119,040 shares of Cyber&#8217;s common stock
      were outstanding.</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 cellpadding="0" cellspacing="0" id="ftable" width="100%">

          <tr>
            <td valign="bottom" width="63%" 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">Name</font></div>
            </td>
            <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="16%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Number
                of Shares Beneficially </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Owned</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="16%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Percent
                of Shares</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="63%" 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">Kevin
                R. Keating</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">936A
                Beachland Boulevard, Suite 13</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">Vero
                Beach, Florida 32963</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="15%" 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">250,000
                </font></div>
            </td>
            <td align="left" valign="bottom" width="2%" 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)</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="15%" 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">2.5</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>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="63%" 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">KI
                Equity Partners II, LLC</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">c/o
                Timothy J. Keating, Manager</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">5251
                DTC Parkway, Suite 1090</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">Greenwood
                Village, Colorado 80111</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="15%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,604,160</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">&#160;(2)</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="15%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">85.0</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="63%" 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">All
                Executive Officers and Directors as a group</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="15%" 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">250,000</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="15%" 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">2.5</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="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <div>
        <hr style="COLOR: black" align="left" noshade size="2" width="12%">
      </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: 27pt;">
              <div>(1)</div>
            </td>
            <td align="left">
              <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Kevin
                R. Keating is not affiliated with and has no equity interest in KI
                Equity
                Partners II, LLC (&#8220;KI Equity&#8221;) and disclaims any beneficial interest in
                the shares of Cyber&#8217;s common stock owned by KI
                Equity.</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>
      <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: 27pt;"><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">Timothy
                J. Keating is the manager of KI Equity and exercises sole voting
                and
                investment control over such shares. KI Equity is not owned by or
                affiliated with Kevin R. Keating and disclaims any beneficial interest
                in
                the shares of Cyber&#8217;s common stock owned by Kevin R.
                Keating.</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: 45pt; TEXT-INDENT: -45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECURITY
      OWNERSHIP AFTER CHANGE OF CONTROL</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: 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 Cyber&#8217;s common stock
      beneficially owned on August 16, 2006,</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      for (i)
      each stockholder known to be the beneficial owner of 5% or more of Cyber&#8217;s
      outstanding common stock, (ii) each executive officer and director, and (iii)
      all executive officers and directors as a group, on a pro forma basis to reflect
      the transactions contemplated by the Exchange Agreement, assuming the closing
      of
      the Exchange, the issuance of the Gateway Shares, the conversion of the Series
      A
      Preferred Shares received by the Infosmart Shareholders (including HIG) in
      the
      Exchange, and the conversion of the Series B Preferred Shares issued to
      Investors under the Financing based on gross proceeds of $7,650,000</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
      were
      completed as of such date. </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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Based
      on
&#160;the completion of the Exchange, gross proceeds from the Financing of
      $7,650,000, the issuance of the Gateway Shares, and assuming (i) the conversion
      of the Series A Preferred Shares issued to the Infosmart Shareholders, and
      (ii)
      the conversion of all Series B Preferred Shares issued to Investors under the
      Financing, occurred as of August 16, 2006, Cyber expects to have 159,000,745
      shares of common stock outstanding. </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 cellpadding="0" cellspacing="0" id="ftable" width="100%">

          <tr>
            <td valign="bottom" width="63%" 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">Name
                of Beneficial Owner and Address (1)</font></div>
            </td>
            <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="16%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Number
                of Shares of Common Stock Beneficially Owned (2)</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
            <td colspan="2" valign="bottom" width="16%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Percent
                of Shares of Common Stock Beneficially Owned (2)</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="63%" 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">Andy
                Kwok</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="15%" 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">23,370,211
                </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="15%" 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">14.70</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="63%" 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">Pauline
                Sze</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="15%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">78,598,867
                </font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3)</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="15%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">49.43</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="63%" 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">Andrew
                Chang</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="15%" 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</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="15%" 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</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="63%" 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">Godwin
                Wong</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="15%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="15%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><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>
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            <td align="left" valign="bottom" width="63%" 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">Prime
                Corporate Developments Limited</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="15%" 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">78,598,867</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" 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">(4)</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="15%" 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">49.43</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="63%" 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">Lui
                Sau Wan</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="15%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,267,763</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(6)</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="15%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5.20</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="63%" 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">Hamptons
                Investment Group Limited</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="15%" 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">6,484,519</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" 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)</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="15%" 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">4.08</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="63%" 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">KI
                Equity Partners II, LLC</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">c/o
                Timothy J. Keating, Manager</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">5251
                DTC Parkway, Suite 1090</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">Greenwood
                Village, Colorado 80111</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="15%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">8,604,160</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(5)</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="15%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">5.41</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="63%" 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">All
                Executive Officers and Directors </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">as
                a Group (4 persons)</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="15%" 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">101,969,078
                </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="15%" 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">64.13</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">
    </div>
    <div>
      <hr style="COLOR: black" align="left" noshade size="2" width="12%">
    </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: 27pt;">
              <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font></div>
            </td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Unless
                otherwise indicated, the address of the beneficial owner will be
                c/o
                Infosmart Group Limited, is 5th Floor, QPL Industrial Building, 126-140
                Texaco Road, Tsuen Wan, Hong Kong. </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 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: 10pt; FONT-FAMILY: ">47</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 27pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</font></td>
            <td align="left">
              <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
                amounts of beneficial ownership is based on the completion of the
                Exchange, the completion of the Financing with gross proceeds raised
                of
                $7,650,000, and the issuance of 2,850,000 shares of Cyber's common
                stock
                to Gateway as compensation for consulting services rendered to Cyber
                in
                connection with the Exchange and it also assumes the conversion of
                1,000,000 Series A Preferred Shares issued pursuant to the Exchange,
                in
                which each Series A Preferred Share is converted into 116.721360
                shares of
                Cyber's common stock (116,721,360 shares of common stock on an
                as-converted basis) and the conversion of 1,092,857.143 Series B
                Preferred
                Shares issued pursuant to the Financing, in which each Series B Preferred
                Share is converted into 26.819924 shares of Cyber's common stock
                (29,310,345 shares of common stock on an as-converted basis). Percentage
                of common stock&#160;beneficially owned is based on a total of 159,000,745
                shares of Cyber's common stock outstanding as of the Exchange and
                the
                Financing. Figures may vary slightly due to rounding.
                </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>
      <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: 27pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3)</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Includes
                78,598,867 shares of Cyber&#8217;s common stock owned by Prime Corporate
                Developments Limited (&#8220;Prime Corporate&#8221;). Ms. Pauline Sze is the sole
                owner of Prime Corporate and exercises sole voting and investment
                control
                over such shares. </font></div>
            </td>
          </tr>

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

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 27pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(4)</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ms.
                Pauline Sze is the sole owner of Prime Corporate and exercises sole
                voting
                and investment control over the shares owned by Prime Corporate.
                </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>
      <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: 27pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(5)</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Timothy
                J. Keating is the manager of KI Equity Partners II, LLC (&#8220;KI Equity&#8221;), and
                exercises sole voting and investment control over such
                shares.</font></div>
            </td>
          </tr>

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

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 27pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(6)</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ms.
                Lui Sau Wan&#8217;s address is No. 188, Victoria Road, Hong
                Kong.</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>
      <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: 27pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(7)</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shares
                were issued to Hamptons Investment Group for its services as a finder
                in
                connection with the Exchange transaction. Their address is Unit 3,
                25/F,
                Global Gateway (Hong Kong), 98 Wang Lung Street, Tsuen Wan, Hong
                Kong.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="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="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>CYBER</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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cyber
      had
      a revolving $500,000 line of credit with Frank Yuan and his spouse, Vicky Yuan.
      The line of credit bears interest at 8% per annum and expires on February 2006.
      The line of credit has been terminated and Cyber&#8217;s obligations thereunder were
      assumed by ASAP Show, 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 id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to certain Stock Option Assumption Agreement entered into between Cyber and
      Frank Yuan as of May 31, 2005 (&#8220;Option Assumption Agreement&#8221;), Frank Yuan, the
      former CEO of Cyber agreed to assume all obligations of Cyber with respect
      to
      options to purchase 36,025 shares of Cyber Common Stock held by certain
      employees and consultants. In connection with the Option Assumption Agreement,
      Yuan delivered a certificate representing 36,025 shares of Cyber Common Stock,
      which shares may be cancelled to the extent Yuan fails to deliver shares to
      such
      holders upon exercise.</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 id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
      certain
      Amended and Restated Securities Purchase Agreement (&#8220;SPA&#8221;) by and among KI
      Equity, Cyber and Frank Yuan (&#8220;Yuan&#8221;) dated August 25, 2005, pursuant to Section
      7.2 thereof Yuan has agreed to indemnify KI Equity and Cyber for certain claims
      and liabilities arising prior to the closing of the Amended SPA for a limited
      time. </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 id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
      certain
      Transfer and Assumption Agreement dated May 31, 2005 (&#8220;Assumption Agreement&#8221;) by
      and among Cyber, Yuan and ASAP Show, Inc. (&#8220;ASAP&#8221;), a then wholly owned
      subsidiary of Cyber, under which Cyber transferred all of its Assets (as defined
      therein) to ASAP and ASAP assumed all of Cyber&#8217;s liabilities (&#8220;Assumed
      Liabilities&#8221;). Under Section 5 of the Assumption Agreement, ASAP and Yuan agreed
      to indemnify Cyber for any claims and liabilities relating to the Assumed
      Liabilities. Further, pursuant to Section 3 of the Assumption Agreement, an
      indemnity reserve for $50,000 (&#8220;Indemnity Escrow&#8221;) was established to satisfy
      any claims that may arise for indemnity under the Amended SPA or the Assumption
      Agreement. Cyber has retained the Indemnity Escrow beyond the six month period
      after the closing of the Amended SPA pending the resolution of the Preference
      Action discussed below. </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: 10pt; FONT-FAMILY: ">48</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <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 id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      March
      7, 2006, a complaint was filed against Cyber in a Chapter 7 bankruptcy
      proceeding in U.S. Bankruptcy Court in the District of Delaware in the matter
      captioned </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>In
      Re:
      Factory 2-U Stores, Inc.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      (&#8220;Preference Action&#8221;). The complaint seeks to recover from Cyber $91,572 in
      alleged preferential transfers made to Cyber by the debtor during the ninety-day
      period prior to the filing of the debtor&#8217;s bankruptcy petition. Cyber intends to
      defend against such preference claim by asserting that such transfers were
      made
      in the ordinary course of business and such other available defenses. Cyber
      filed its answer to the compliant on or about April 20, 2006. To the extent
      Cyber incurs any losses, costs or damages with respect to the preference claim,
      including attorneys&#8217; fees and related costs, Cyber believes it may recover such
      losses, costs and damages from Frank Yuan and ASAP pursuant to the
      indemnification provisions under the Assumption Agreement and/or Amended SPA.
      Cyber has informed Frank Yuan and ASAP that it intends to seek indemnification
      from them with respect to the preference claim. Further, the Company has
      informed Frank Yuan and ASAP that the $50,000 reserve originally due to be
      paid
      March 30, 2006 under the terms of the Assumption Agreement will be retained
      by
      Cyber until this preference claim is resolved to satisfy any potential indemnity
      claims.</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 id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Effective
      October 5, 2005, Cyber entered into a contract with Vero Management, L.L.C.
      (&#8220;Vero&#8221;) for managerial and administrative services, which contract was amended
      effective November 1, 2005. Vero has not been engaged to provide, and Vero
      does
      not render, legal, accounting, auditing, investment banking or capital formation
      services. Kevin R. Keating, a director of Cyber, is the manager of Vero. The
      term of the contract is for one year, but the contract may be terminated at
      any
      time. In consideration of the services provided, Vero is paid $2,500 for each
      month in which services are rendered. Cyber's contract with Vero was terminated
      effective at the Closing of the Exchange.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Kevin
      R.
      Keating was the sole officer and a director of Cyber prior to the closing of
      the
      Exchange. 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 is the majority stockholder of Cyber, Keating
      Securities, LLC, the registered broker-dealer affiliate of Keating Investments,
      LLC, and KAMS. Kevin R. Keating is not affiliated with and has no equity
      interest in Keating Investments, LLC, KI Equity, KAMS or Keating Securities,
      LLC
      and disclaims any beneficial interest in the shares of Cyber&#8217;s common stock
      owned by KI Equity. Similarly, Keating Investments, LLC, KI Equity, KAMS and
      Keating Securities, LLC disclaim any beneficial interest in the shares of
      Cyber&#8217;s common stock currently owned by Kevin R. Keating. Mr. Keating is also
      the manager and sole member of Vero Management, LLC, which had a management
      agreement with Cyber that terminated 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: 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">Margie
      L.
      Blackwell, Luca Toscani and Jeff L. Andrews are directors of Cyber. Margie
      L.
      Blackwell and Luca Toscani are each members of Keating Investments, LLC, and
      Jeff L. Andrews is a Vice President of Keating Investments, 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: 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, pursuant to the terms of the Exchange Agreement, Cyber entered into
      financial advisory agreement with Keating Securities, LLC (&#8220;Keating
      Securities&#8221;), a registered broker-dealer, under which Keating Securities was
      compensated by Cyber for its advisory services rendered to Cyber in connection
      with the Exchange. The transaction advisory fee was $450,000. This fee was
      paid
      at the Closing of the Exchange. </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 id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
      the
      Closing, pursuant to the terms of the Exchange Agreement, Cyber also entered
      into an aftermarket support agreement between Cyber and Keating Aftermarket
      Support, LLC (&#8220;KAMS&#8221;), with such terms and conditions as mutually acceptable to
      Infosmart, Cyber and KAMS. Pursuant to this agreement, the parties agreed that:
      (i) KAMS shall provide after market support services to Cyber for a period
      of
      one year after the Closing of the Combination with the monthly retainer to
      be
      paid to KAMS for such services being $12,500, (ii) Cyber shall engage a
      qualified research firm approved by KAMS to issue an independent research report
      and provide research coverage on Cyber following the Closing, with Cyber being
      responsible for paying an estimated total cost of $35,000 for an initial
      independent research report and three subsequent quarterly reports thereafter,
      and (iii) Cyber agreed to allocate a $400,000 annual budget for third party
      aftermarket support and investor relations services for the one year period
      after 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: 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">Other
      than the above transactions or otherwise set forth in this Form 8-K Current
      Report or in any reports filed by Cyber with the SEC, Cyber has not entered
      into
      any material transactions with any director, executive officer, and nominee
      for
      director, beneficial owner of five percent or more of its common stock, or
      family members of such persons. Cyber is not a subsidiary of any
      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">
      <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: 10pt; FONT-FAMILY: ">49</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div 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>INFOSMART
      GROUP</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 id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      related transactions of our predecessor&#8217;s officers, directors and/or 5%
      Infosmart shareholders are as follow:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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><em>Advances
      from Related Parties</em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Advances
      from certain related parties to Infosmart&#8217;s working capital are as
      follows:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

          <tr>
            <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td colspan="5" valign="bottom" width="25%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
                of December 31,</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2005</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">
              <div>&#160;</div>
            </td>
            <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2004</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="71%" style="border-bottom: medium none;">&#160;</td>
            <td width="2%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="71%" 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">External
                Scene</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">$</font></div>
            </td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="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">129,000</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="71%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tech
                Power Resources Company, which is controlled by minority interest,
                Ms. Li
                Woon Che (before the Reorganization) of ISTL</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></div>
            </td>
            <td width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
              </div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
              </div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">96,448</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="71%" 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">Mega
                Century</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">-</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="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">490,549</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="71%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Prime
                Corporate</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: #ccffcc;">&#160;</td>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 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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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">384,961</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">Tony
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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;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 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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            <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="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">1,189,370</font></div>
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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="71%" style="border-bottom: white;">&#160;</td>
            <td width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
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            <td align="left" valign="bottom" width="71%" 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;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 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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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
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      above
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      undertaken not to demand repayment in the next twelve months. As of December
      31,
      2005, the amounts originally due to Tony Wong, Eternal Scene and Pauline Sze,
      which amounted to $3,870, $129,000 and $1,707,348, respectively, were assigned
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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">Infosmart&#8217;s
      material transactions with related parties during the years ended December
      31,
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    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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          <tr>
            <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td colspan="5" valign="bottom" width="25%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Year
                ended December 31,</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2005</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">
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            </td>
            <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2004</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">
              <div>&#160;</div>
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          </tr>
          <tr>
            <td align="left" valign="bottom" width="71%" style="border-bottom: medium none;">&#160;</td>
            <td width="2%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="71%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sales
                of raw materials to Mega Century at costs actual incurred</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>
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            <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">29,197</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;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 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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            <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">499,217</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purchases
                of finished goods from Mega Century at </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">market
                prices</font></div>
            </td>
            <td width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">24,667</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="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,292,156</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="bottom" width="71%" style="border-bottom: #ccffcc;">
              <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">Sales
                of finished goods to Mega Century at market </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Prices</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">-</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="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">26,040</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="71%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Factory
                rentals received from Mega Century at market rentals</font></div>
            </td>
            <td width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">2,572</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">17,873</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="71%" 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">Machinery
                rentals received from Mega Century at </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">market
                rentals</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">-</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="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">481,500</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="71%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Quarters
                rentals paid to Eternal Scene at market rentals</font></div>
            </td>
            <td width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">62,274</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mega
      Century Limited, a Hong Kong company (&#8220;Mega Century&#8221;), is a company formerly
      controlled by Ms. Pauline Sze. However, only the transactions with Mega Century
      up to February 7, 2005 are regarded as related party transactions as the
      management considers that Mega Century was no longer a related party following
      the transfer of entire interest in Mega Century by Ms. Sze and her family
      members.</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 style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Reorganization
      Related Transactions</em></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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      October 20, 2005, Infosmart and its subsidiaries (including IS Technology,
      IS
      International and IS Media (&#8220;IML&#8221;)) reorganized their corporate structure (the
&#8220;Infosmart Reorganization&#8221;).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div 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: 10pt; FONT-FAMILY: ">50</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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">Immediately
      before the Reorganization, the 20,000 fully-paid issued and outstanding shares
      of IS Technology were held as follows: (a) 14,255 shares held by Eternal Scene
      International Limited (&#8220;Eternal Scene&#8221;) (an entity controlled by Infosmart CFO
      and Director Sze Po Nei (&#8220;Pauline Sze&#8221;)); (b) 4,245 shares held by Infosmart CEO
      and Director Mr. Kwok Chung (&#8220;Andy Kwok&#8221;) and (c) 1,500 shares held in trust by
      Ms. Li Woon Che (&#8220;Ms. Li&#8221;) for the benefit of Ms. Lui Sau Wan (&#8220;Ms. Lui&#8221;),
      representing approximately 71.3%, 21.2% and 7.5% of the entire issued common
      stock of ISTL, respectively. On October 19, 2005, IS Technology increased its
      authorized share capital to 5,000,000 shares. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      connection with the Reorganization, on October 20, 2005, Prime Corporate
      Developments Limited (&#8220;Prime Corporate&#8221;), a company solely owned and controlled
      by Pauline Sze, converted $617,287 (equivalent to HK$4,800,000) in outstanding
      loans to IS Technology into 4,800,000 shares of IS Technology&#8217;s voting common
      stock, par value $0.13 (equivalent to HK$1) per share. Prime Corporate then
      directed IS Technology to issue 4,799,999 IS Technology shares to Infosmart
      and
      one (1) IS Technology share to be held in trust by Mr. Wong Hiu Ming (&#8220;Tony
      Wong&#8221;) for the benefit of Prime Corporate, the husband of Pauline Sze, instead
      of issuing such shares to Prime Corporate. </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">Further,
      following the conversion, Infosmart also acquired the remaining 20,000
      outstanding and issued shares of IS Technology stock as follows:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></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 style="width: 36pt;">
              </td>
              <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="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Infosmart
                  acquired the 14,255 IS Technology shares previously held by Eternal
                  Scene
                  in exchange for a cash payment of HK$14,255 or approximately
                  US$1,827.</font></div>
              </td>
            </tr>

        </table>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; 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%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">
            </td>
            <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">Mr.
                Kwok agreed to transfer his 4,245 IS Technology shares to Infosmart
                in
                exchange for an issuance to him by Infosmart of 43 shares of Infosmart
                stock. After transferring his 4,245 IS Technology shares to Infosmart,
                Mr.
                Kwok then assigned his right to receive the 43 Infosmart shares to
                Prime
                Fortune Enterprises Limited (&#8220;Prime&#8221;). All of the 1,000 fully-paid issued
                and outstanding shares of Prime's stock&#160;are held as follows: 713
                shares by Prime Corporate, 212 shares by Mr. Kwok, and 75 shares
                by Ms.
                Lui.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; 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%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">
            </td>
            <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">Ms.
                Li, who held the 1,500 IS Technology shares in trust for the benefit
                of
                Ms. Lui, agreed to transfer 1,500 IS Technology shares in exchange
                for an
                issuance to her by Infosmart of 15 shares of Infosmart stock. After
                transferring the 1,500 IS Technology shares to Infosmart, Ms. Li
                then
                waived</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">her
                right to receive the 15 Infosmart
                shares.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><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">Immediately
      before the Reorganization, the 200 fully-paid issued shares of IS International
      were held as follows: (a) 161 shares by Prime Corporate Developments Limited
      (&#8220;Prime Corporate&#8221;), an entity controlled by Infosmart CFO and Director Pauline
      Sze, Prime Corporate&#8217;s sole shareholder; (b) 24 shares by Rise Tech Holdings
      Limited (&#8220;Rise Tech&#8221;); and (c) 15 shares held in trust by Ms. Li for the benefit
      of Ms. Lui, representing 80.5%, 12.0% and 7.5% of the entire issued common
      stock
      of IS International. Infosmart acquired all 200 issued and outstanding shares
      of
      IS Technology stock as follows:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">
            </td>
            <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">Prime
                Corporate agreed to transfer its 161 IS International shares to Infosmart
                in exchange for an issuance to Prime Corporate by Infosmart of 161
                shares
                of Infosmart stock to Prime Corporate (including an issuance of one
                (1)
                share to Tony Wong, to hold in trust for the benefit of Prime Corporate).
                After transferring its 161 IS Technology shares to Infosmart, Prime
                Corporate then assigned its right to receive the 161 Infosmart shares
                to
                Prime.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">
            </td>
            <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">Rise
                Tech agreed to transfer its 24 IS International shares to Infosmart
                in
                exchange for an issuance to Rise Tech by Infosmart of 24 shares of
                Infosmart stock. After transferring its 24 IS Technology shares to
                Infosmart, Rise Tech then waived its right to receive the 24 Infosmart
                shares.</font></div>
            </td>
          </tr>

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

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">
            </td>
            <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">Ms.
                Li, who held the 15 IS International shares in trust for the benefit
                of
                Ms. Lui, agreed to transfer 15 IS International shares in exchange
                for an
                issuance to Ms. Li by Infosmart of 15 shares of Infosmart stock.
                After
                transferring the 15 IS Technology shares to Infosmart, Ms. Li then
                assigned</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">her
                right to receive the 15 Infosmart shares to
                Prime.</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">Thus,
      after the Reorganization, Infosmart beneficially owns all 4,820,000 shares
      of
      issued and outstanding shares IS Technology stock, and all 200 shares of issued
      and outstanding shares IS International stock. IS Technology owns all of the
      issued and outstanding shares of IS Media&#8217;s 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">
      <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: 10pt; FONT-FAMILY: ">51</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Further,
      as described above, the following persons assigned the rights to receive a
      total
      of 219 Infosmart shares to Prime, as follows: (1) Mr. Kwok, 43 shares; (2)
      Ms.
      Li, 15 shares; and (3) Prime Corporate, 161 shares. Rather than being issued
      the
      219 Infosmart shares, Prime agreed to waive its rights to all 219 Infosmart
      shares in exchange for the issuance of one (1) share of Infosmart stock, which
      is the only issued and outstanding share of Infosmart stock. Thus, following
      the
      Infosmart Reorganization, Prime became the owner of 100% of the voting power
      in
      Infosmart.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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><em>Re-structuring
      Related Transactions</em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      August
      2006, the board of directors of both Prime and Infosmart decided to re-structure
      certain shareholdings in Infosmart, so that after the re-structuring, Prime
      would no longer own 100% of Infosmart&#8217;s issued capital shares and so that Prime
      Corporate, Kwok Chung and Lui Sau Wan would replace Prime as the direct owners
      of 100% of the issued capital shares and equity ownership of Infosmart (the
      &#8220;Re-structuring&#8221;). </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Prior
      to
      the Re-structuring, Prime owned 100% of the issued capital shares of Infosmart,
      which consisted on one (1) issued capital share, and Prime&#8217;s issued capital
      shares were owned as follows: 713 shares held by Prime Corporate, 212 shares
      held by Kwok Chung, and 75 shares held by Lui Sau Wan. On August 11, 2006,
      and
      in connection with the Re-structuring, Prime&#8217;s board of directors approved
      resolutions for Prime to transfer the one (1) issued capital share of Infosmart
      owned by Prime to Prime shareholder Kwok Chung in exchange for a cash payment
      of
      $1.00 (the &#8220;Prime Transfer&#8221;), and that pursuant to such resolutions, Prime
      transferred the one Infosmart share to Kwok Chung on August 11, 2006 in exchange
      for the $1.00 cash payment.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Further,
      on August 11, 2006 and concurrent with the Prime Transfer, the Company&#8217;s Board
      approved resolutions for the issuance of 999 new shares in Infosmart to Prime
      Corporate Developments Limited (&#8220;Prime Corporate&#8221;), Kwok Chung and Lui Sau Wan,
      as follows: 713 shares to Prime Corporate, 211 shares to Kwok Chung, and 75
      shares to Lui Sau Wan, in exchange for a cash payment by Prime Corporate, Kwok
      Chung and Lui Sau Wan of $1.00 per Infosmart share that each receives (the
      &#8220;Infosmart Share Issuance&#8221;) or an aggregate total payment of $999 for such
      shares, and that on August 11, 2006, the Company issued the 999 Infosmart
      shares, in amounts as described above, to Prime Corporate, Kwok Chung and Lui
      Sau Wan and, in exchange, received the $999 cash payment, pursuant to such
      resolutions.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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"><strong>A</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">s
      a
      result of and immediately after the Prime Transfer and the Infosmart Share
      Issuance, Prime Corporate, Kwok Chung and Lui Sau Wan became the owners of
      100%
      of the issued capital shares of Infosmart, with each of them owning the same
      number of Infosmart shares as the number of Prime shares that each currently
      owns. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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><em>Other
      Related Transactions</em></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">For
      the
      period December 31, 2005 through the Closing of the Exchange Agreement, Prime
      Corporate Developments Limited, an Infosmart and Cyber shareholder and a related
      entity solely owned by Infosmart&#8217;s CFO and Director Ms. Pauline Sze, has loaned
      approximately $384,615 to Infosmart in connection with the construction of
      the
      Discobras manufacturing facility in Brazil. </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">Pursuant
      to the Exchange Agreement, as amended on August 16, 2006, immediately prior
      to
      the Closing of the Exchange, Infosmart issued 58.82 shares of the its capital
      stock to Hamptons Investment Group, Ltd. (&#8220;HIG&#8221;) (which will convert into
      approximately 6,484,519 of Cyber&#8217;s common stock upon Mandatory Conversion of the
      Series A Preferred Shares, as described above) for services provided as a finder
      in connection with the Exchange.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DESCRIPTION
      OF SECURITIES </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="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">Cyber
      is
      presently authorized under its Articles of Incorporation to issue 40,000,000
      shares of common stock, no par value per share, and 10,000,000 shares of
      preferred stock, no par value per share. Of the 10,000,000 shares of preferred
      stock authorized, 1,200,000 shares were designated as Series A Convertible
      Preferred Stock and 1,800,000 shares were designated as Series B Convertible
      Preferred Stock pursuant to Certificates of Determination ("Certificates of
      Determination") that were approved by Cyber's board of directors, and filed
      with
      and accepted by, the Secretary of State of the State of California prior to
      the
      Closing of the exchange transaction. Further, pursuant to the Exchange
      Agreement, Cyber issued 2,850,000 shares of Cyber&#8217;s common stock to Worldwide
      Gateway Co., Ltd. (&#8220;Gateway&#8221;) immediately prior to the Closing for Gateway&#8217;s
      services as a consultant to Cyber connection with the Exchange (&#8220;Gateway
      Shares&#8221;). Thus, as of the Closing, and after the completion of the Financing,
      Cyber had 12,969,040 shares of common stock issued and outstanding, 1,000,000
      shares of Series A Preferred Stock issued and outstanding, and 1,092,857.143
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">shares
      of
      Series B Preferred Stock issued and outstanding. Following the closing of the
      exchange transaction and upon approval by the majority of Cyber&#8217;s stockholders
      (voting together on an as-converted-to-common-stock basis) of an increase in
      the
      number of Cyber&#8217;s authorized shares of common stock, the Company will file an
      amendment to its articles of incorporation to increase in the number of
      authorized shares of Cyber&#8217;s common stock from 40,000,000 shares to 300,000,000
      shares.</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>&#160;</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
      following descriptions of Cybers&#8217; capital stock are only summaries and do not
      purport to be complete and is subject to and qualified by its Articles of
      Incorporation, as amended, its By-laws, the Certificates of Determination and
      by
      the provisions of applicable corporate laws of the State of California. The
      descriptions of the common stock and preferred stock, as well as warrants to
      purchase our common stock, reflect changes to our capital structure that
      occurred immediately prior to or upon the closing of this Exchange and the
      Financing:</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"><strong>COMMON
      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: 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 Cyber Merchants&#8217; common stock are entitled to one vote for each share
      held of record on all matters submitted to a vote of the stockholders, except
      that upon giving the legally required notice, stockholders may cumulate their
      shares in the election of directors. Cyber Merchants may pay dividends at such
      time and to the extent declared by the Board of Directors in accordance with
      California corporate law. Cyber Merchants&#8217; common stock has no preemptive or
      other subscription rights, and there are no conversion rights or redemption
      or
      sinking fund provisions with respect to such shares. All outstanding shares
      of
      common stock are fully paid and non-assessable. To the extent that additional
      shares of common stock may be issued in the future, the relative interests
      of
      the then existing stockholders may be diluted.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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>PREFERRED
      STOCK</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cyber
      Merchants&#8217; preferred stock may be divided into such number of series as the
      Board of Directors may determine. The Board of Directors is authorized to
      determine and alter the rights, preferences, privileges, and restrictions
      granted to or imposed upon any wholly unissued series of preferred shares,
      and
      to fix the number of shares and the designation of any series of preferred
      shares. The Board of Directors may increase or decrease (but not below the
      number of shares of such series then outstanding) the number of shares of any
      wholly unissued series subsequent to the issue of those shares. The rights
      of
      the holders of common stock will be subject to and may be adversely affected
      by
      the rights of the holders of any preferred stock that may be issued in the
      future. Issuance of a new series of preferred stock could make it more difficult
      for a third party to acquire, or discourage a third party from acquiring, the
      outstanding shares of common stock and make removal of the Board of Directors
      more difficult. No shares of preferred stock are currently issued and
      outstanding, and we have no present plans to issue any shares of preferred
      stock.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Series
      A Convertible Preferred 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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      following is a summary of the preferences and rights contained in the
      Certificate of Determination (the &#8220;Series A Certificate&#8221;) of the Series A
      Convertible Preferred Stock (&#8220;Series A Preferred Stock&#8221;) and is qualified in its
      entirety by reference to such Certificate, which is attached hereto as Exhibit
      3.3. Capitalized terms not otherwise defined herein have the respective meanings
      set forth in the Series A Certificate.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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><em>Stated
      Value</em></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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
      share of Series A Preferred Stock will have a stated value of $0.0001 per share
      (&#8220;Series A Stated Value&#8221;). </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Dividends</em></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">Holders
      of Series A Preferred Stock (the &#8220;Series A Holders&#8221;) will not be entitled to
      dividends unless the Company pays cash dividends or dividends in other property
      to holders of outstanding shares of Common Stock, in which event, each
      outstanding share of the Series A Preferred Stock will be entitled to receive
      dividends of cash or property in an amount or value equal to the Conversion
      Rate
      multiplied by the amount paid in respect of one share of Common Stock. Any
      dividend payable to the Series A Preferred Stock will have the same record
      and
      payment date and terms as the dividend is payable on the Common Stock.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Liquidation
      Preference</em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Series A Preferred Stock shall have a liquidation preference equal to $0.0001
      per share.</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">&#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><em>Adjustments
      to Conversion Rate and Reorganization</em></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">The
      Conversion Rate for the number of shares of Common Stock into which the Series
      A
      Preferred Stock shall be converted on a Mandatory Conversion shall be subject
      to
      adjustment from time to time </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">to
      reflect any stock splits, stock dividends, consolidations, reverse splits,
      combinations or reclassifications of shares of Common Stock or similar
      events.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      In case
      of any reclassification or reorganization of the outstanding shares of Common
      Stock which solely affects the par value of the shares of Common Stock, or
      in
      the case of any merger or consolidation of the Company with or into another
      corporation (other than a consolidation or merger in which the Company is the
      continuing corporation and which does not result in any reclassification or
      reorganization of the outstanding shares of Common Stock), or in the case of
      any
      sale or conveyance to another corporation or entity of the property of the
      Company as an entirety or substantially as an entirety in connection with which
      the Company is dissolved, the Series A Holders shall have the right thereafter
      (until the Mandatory Conversion or its equivalent) to receive upon the
      conversion of the Series A Preferred Stock the kind and amount of shares of
      stock or other securities or property (including cash) receivable upon such
      reclassification, reorganization, merger or consolidation, or upon a dissolution
      following any such sale or other transfer, by a holder of the number of shares
      of Common Stock into which the Series A Preferred Stock is convertible
      immediately prior to such event; and if any reclassification also results in
      a
      change in shares of Common Stock, then such adjustment also shall be
      made.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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><em>Conversion
      Rights</em></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"><em>Mandatory
      Conversion</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">At
      such
      time as the Company files an amendment to its Articles of Incorporation
      (&#8220;Amendment&#8221;) with California&#8217;s Secretary of State increasing the authorized
      number of shares of Common Stock from 40,000,000 to 300,000,000 so that the
      Company has a sufficient number of authorized and unissued shares of Common
      Stock so as to permit the conversion of all outstanding shares of the Series
      A
      Preferred Stock, then upon the filing and acceptance of the Amendment, whether
      by amendment or restatement, all the outstanding shares of Series A Preferred
      Stock will immediately and automatically convert into shares of the Company&#8217;s
      Common Stock without any notice or action required on the part of the Company
      or
      the holder (&#8220;Mandatory Conversion&#8221;). On a Mandatory Conversion, the holders of
      Series A Preferred Stock will be entitled to receive Common Stock at the
      conversion rate of 116.721360 shares of fully paid and non-assessable Common
      Stock for one (1) share of Series A Preferred Stock (&#8220;Conversion
      Rate&#8221;).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Redemption
      Rights </em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Series A Preferred Stock does not have any redemption rights.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Voting
      Rights</em></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">The
      holders of record of shares of Series A Preferred Stock shall be entitled to
      the
      following voting rights: (a) those voting rights required by applicable law
      and
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">as
      described in the paragraph under &#8220;Protective Provisions&#8221; below; (b) the right to
      vote together with the holders of the Common Stock, as a single class, upon
      all
      matters submitted to holders of Common Stock for a vote</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
      with
      e</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ach
      share
      of Series A Preferred Stock being entitled to a number of votes equal to the
      number of shares of Common Stock issuable in a Mandatory Conversion based on
      the
      then applicable Conversion Rate; (c) w</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">henever
      holders of Series A Preferred Stock are required or permitted to take any action
      by vote, such action may be taken without a meeting on written consent, setting
      forth the action so taken and signed by the holders of the outstanding capital
      stock of the Company having not less than the minimum number of votes that
      would
      be necessary to authorize or take such action at a meeting at which all such
      shares entitled to vote thereon were present and voted, with each share of
      the
      Series A Preferred Stock entitling the Series A Holder thereof to one vote
      on
      all matters to be voted on by the Series A Holders as set forth in this section
      (c).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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><em>Protective
      Provisions</em></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">So
      long
      as any shares of Series A Preferred Stock are outstanding, the Company shall
      not
      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 shares of
      Series A Preferred Stock, voting as a separate class: (a) create (by
      reclassification or otherwise) any new class or series of shares having rights,
      preferences or privileges equal or senior to the Series A Preferred Stock,
      other
      than the shares of Series B Preferred Stock (such Series B Preferred Stock
      having been created by a certificate of determination to be filed within five
      (5) business days after the filing of the </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series
      A
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certificate;
      (b) directly or indirectly, alter or change the rights, preferences or
      privileges of the Series A Preferred Stock; (c) amend the Company&#8217;s Articles of
      Incorporation in a manner that materially adversely affects the rights,
      preferences or privileges of the holders of the Series A Preferred Stock; (d)
      increase or decrease the authorized number of shares of Preferred Stock of
      the
      Company; (e) liquidate or wind-up the Company; or (f) 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 or Common Stock; provided, however,
      that this restriction shall not apply to the repurchase of shares of Common
      Stock from employees, officers, directors, consultants or other persons
      performing services for the Company or any subsidiary pursuant to agreements
      under which the Company 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>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Series
      B Convertible Preferred 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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      following is a summary of the preferences and rights contained in the
      Certificate of Determination (&#8220;Series B Certificate&#8221;) of the Series B
      Convertible Preferred Stock and is qualified in its entirety by reference to
      such Series B Certificate, which is attached hereto as Exhibit 3.4. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Capitalized
      terms not otherwise defined herein have the respective meanings set forth in
      the
      Series B Certificate.</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"><strong><em>Stated
      Value</em></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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
      share of Series B Preferred Stock will have a stated value of $7.00 per share
      (&#8220;Series B Stated Value&#8221;).</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"><strong><em>Dividends</em></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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Holders
      of Series B Preferred Stock (the &#8220;Series B Holders&#8221;) are entitled to receive
      preferential dividends in cash on a quarterly basis at the rate of $0.56 per
      share per annum plus accumulated and unpaid dividends thereon (including any
      accrued late fees on overdue and unpaid dividends), (the &#8220;Series B Dividend&#8221;).
      Dividends shall be due and payable in arrears on March 29, June 29, September
      29
      and December 29 of each year, commencing September 29, 2006, except that if
      such
      date is not a Business Day, then the dividend shall be payable on the first
      immediately succeeding Business Day (each such date being hereinafter referred
      to as a &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Dividend
      Payment Date</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;).
      All
      overdue accrued and unpaid dividends shall entail a late fee at the rate of
      fifteen percent (15%) per annum (or such lesser amount as required by applicable
      law), to accrue daily, from the date such dividend is due hereunder through
      and
      including the date of payment. </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">Unless
      full cumulative dividends (plus any accrued late fees thereon) have been or
      are
      contemporaneously distributed to both the Series B Preferred Stock and other
      preferred shares designated that rank in</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>
      pari
      passu</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      as the
      Series B Preferred Stock (&#8220;Parity Dividend Shares&#8221;), all dividends the Company
      declares upon the Series B Preferred Stock and the Parity Divdend Shares shall
      be declared pro rata with respect to all such shares, so that the amounts of
      such dividends shall in all cases bear to each other the same ratio that, at
      the
      time of the declaration, all accrued but unpaid dividends (plus any accrued
      late
      fees thereon) on such shares, respectively, bear to each other. No distributions
      shall be made with respect to the Common Stock, or other preferred shares
      designated as ranking junior the Series B Preferred Stock (&#8220;Junior Dividend
      Shares&#8221;), until (1) the Series B Dividend shall have been declared and paid or
      set apart through the most recent Dividend Payment Date, and (2) the Company
      has
      set apart for payment an amount in cash equal to the scheduled dividend payments
      for each of the next two Dividend Payment Dates.</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><em>Liquidation
      Preference</em></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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      liquidation value per share of Series B Preferred Stock in the event of any
      liquidation, dissolution or winding up of the Company, either voluntary or
      involuntary, shall be an amount equal to (i) the Series B Stated Value (subject
      to adjustment in the event of a stock split, stock dividend or similar event),
      plus (ii) an amount equal to the cash value of the accrued and unpaid dividends
      (including any accrued late fees) with respect to such share, whether or not
      declared, plus (iii) all liquidated damages and other amounts due in respect
      of
      the Series B Preferred Stock as provided in the </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series
      B
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certificate
      (the &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Liquidation
      Value</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;).
      Any
      shares which are junior to, in pari passu with, or senior to the Series B
      Preferred Stock with respect to redemption payments and rights upon liquidation,
      dissolution or winding-up of the affairs of the Company are referred to as
      &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Junior
      Liquidation Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;,
      &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Parity
      Liquidation Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;,
      and
&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Senior
      Liquidation Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;,
      respectively. In the event of any voluntary or involuntary liquidation,
      dissolution or winding-up of the Company (a &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Liquidation
      Event</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;),
      the
      Series B Holders (i) shall not be entitled to receive payments for the
      liquidation of the Preferred Shares held by them until the liquidation value
      of
      all Senior Liquidation Shares shall have been paid in full, and (ii) shall
      be
      entitled to receive the greater of: (a) one hundred twenty-five percent (125%)
      of the Liquidation Value; or (b) an amount equal an amount equal to the closing
      price of the Company&#8217;s common stock on the day of the Liquidation Event
      multiplied by the number of shares of the Company&#8217;s common stock that the
      Preferred Shares held by such Holder is convertible into (&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Liquidation
      Amount</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;)
      of
      such Preferred Shares held by them in preference to and in priority over any
      distributions upon the Junior Liquidation Shares. Upon payment in full of the
      Liquidation Amount to which the Holders are entitled, the Holders will not
      be
      entitled to any further participation in any distribution of assets by the
      Company. If the assets of the Company are not sufficient to pay in full the
      Liquidation Amount payable to the Holders and the liquidation value payable
      to
      the holders of any Parity Liquidation Shares, the holders of all such shares
      shall share ratably in such distribution of assets in accordance with the
      amounts that would be payable on the distribution if the amounts to which the
      Holders and the holders of Parity Liquidation Shares are entitled were paid
      in
      full.</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">
          <hr style="COLOR: black" noshade size="2">
        </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">&#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><em>Conversion
      Rights</em></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">Series
      B
      Holder&#8217;s Conversion</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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">Each
      share of the Series B Preferred Stock shall be convertible, at the option of
      the
      holder thereof, at any time after the date of issuance of such share into shares
      of Common Stock, subject to certain adjustments (&#8220;Series B Holder&#8217;s
      Conversion&#8221;). However, the Company shall not issue shares of Common Stock upon a
      Series B Holder&#8217;s Conversion in an amount which results in the Series B Holder
      or its Affiliates beneficially owning an aggregate of more the 4.99% of the
      Company&#8217;s outstanding Common Stock, after giving effect to such issuance of
      Common Stock, on the applicable conversion date, with beneficial ownership
      being
      determined by reference to Rule 13d-3 under the Securities Exchange Act of
      1934,
      as amended. The number of shares of Common Stock to be delivered by the Company
      to a Series B Holder pursuant to a conversion shall be determined by dividing
      (i) the aggregate Liquidation Value of such Series B Holder&#8217;s Preferred Shares
      to be converted by (ii) the conversion price in effect on the applicable
      conversion date. The initial conversion price shall be $0.261, and is subject
      to
      certain adjustments.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Automatic
      Conversion</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <div style="DISPLAY: block; MARGIN-LEFT: 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
        outstanding and unconverted Series&#160;B Preferred Shares shall be converted
        into shares of the Company&#8217;s common stock at the Conversion Price then in effect
        by delivering to the Holders an Automatic Conversion Notice upon the happening
        of all of the following events: (i) for each of the twenty (20) consecutive
        Trading Days immediately preceding the date of delivery of the Automatic
        Conversion Notice, the daily Closing Price of the Common Stock shall be equal
        to
        at least two hundred fifty percent (250%) of the Conversion Price in effect
        as
        of the date immediately preceding the date of the Automatic Conversion Notice;
        and (ii) the daily trading volume of the Common Stock for each of the Trading
        Days during such twenty (20) Trading day period shall be at least 500,000
        shares; provided, however, no such conversion is permitted unless at the
        time of
        the delivery of the Automatic Conversion Notice and on the Automatic Conversion
        Date, (A) the Company is in compliance with all of its obligations under
        this
        Certificate of Determination and the Transaction Documents, (B) during each
        of
        the Trading Days in such twenty (20) day period, the Registration Statement
        has
        been effective and has not been suspended by the SEC, (C) as of the Conversion
        Date, the Registration Statement is effective and has not been suspended
        by the
        SEC and no event has occurred which will likely result in the Registration
        Statement being declared ineffective or suspended by the SEC, and (D) no
        Triggering Event (as described below under &#8220;Redemption Rights&#8221;) hereof has
        occurred and is continuing. The Automatic Conversion Notice shall specify
        the
        date on which such conversion is to be effected, which date may not be prior
        to
        the day after the Company delivers such Automatic Conversion Notice in
        accordance the Certificate&#8217;s notice provision or later than ten (10) Business
        Days subsequent to such delivery (the &#8220;Automatic Conversion Date&#8221;). If no
        Automatic Conversion Date is specified in the Automatic Conversion Notice,
        the
        Automatic Conversion Date shall be the day after the Automatic Conversion
        Notice
        is deemed delivered pursuant to the Certificate&#8217;s notice provision. However, the
        Company shall not issue shares of Common Stock upon&#160;the Automatic
        Conversion in an amount which results in the Series B Holder or its Affiliates
        beneficially owning an aggregate of more the 4.99% of the Company&#8217;s outstanding
        Common Stock, after giving effect to such issuance of Common Stock, on the
        applicable conversion date, with beneficial ownership being determined by
        reference to Rule 13d-3 under the Securities Exchange Act of 1934, as
        amended.</font></div><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><em>Mandatory
      Conversion</em></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">All
      of
      the then outstanding and unconverted shares of Series B Preferred Stock shall
      automatically be converted into shares of the Common Stock at the then-effective
      conversion price on the second anniversary of the original issuance date of
      such
      shares; provided that, no such conversion is permitted so long as a Triggering
      Event (</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">as
      defined below under &#8220;Redemption Rights&#8221;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">)
      or
      (viii) hereof has occurred and is continuing; provided, further, that the
      Mandatory Conversion shall be delayed to the extent that a registration
      statement covering the resale of the Common Stock to be issued to holders of
      the
      Preferred Shares upon conversion is and has been continuously effective for
      a
      period of at least 120 calendar days prior to the Mandatory Conversion Date,
      but
      in no case should the delay be for a period more than 120 days after the
      Mandatory Conversion Date.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Anti-Dilution
      Adjustment</em></strong></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"><strong>&#160;</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 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 adjust the conversion price to reflect any stock splits, stock
      dividends or other combinations or distributions to holders of the Company&#8217;s
      securities where the consideration is less than the current conversion price.
      The Company will not make this adjustment with respect to shares issued (1)
      upon
      conversion of the Company&#8217;s Series A Preferred Stock issued pursuant to that
      certain Exchange Agreement, dated July 7, 2006, between the Company and
      Infosmart (the &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Exchange
      Agreement</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;)
      and
      the stockholders of Infosmart in accordance with the Certificate of
      Determination of the Series A Preferred Stock as of the date hereof; (2) for
      the
      issuance of Common Stock upon the exercise of warrants (including any warrants
      issued to the Placement Agent) pursuant to the terms of such warrants as of
      the
      date hereof issued in connection with the offering of the Preferred Shares
      (the
&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Private
      Placement</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;);
      or
      (3) for the issuance of Common Stock (whether directly or through Options or
      other Convertible Securities) to employees or directors of the Company pursuant
      to an equity incentive plan or agreement approved by the Company&#8217;s
      shareholders.</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="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
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      <div id="HDR">
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      <div>&#160;</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">Any
      grant
      by the Company (whether directly or by assumption in a merger or otherwise,
      in
      any manner) of any warrants, rights to subscribe for, or options to purchase
      any
      Common Stock (collectively, the &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Options</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;)
      or any
      issuance or sale by the Company (whether directly or by assumption in a merger
      or otherwise, in any manner) of any security convertible into or exchangeable
      for shares of Common Stock (&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Convertible
      Securities</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;)
      shall
      be deemed to be an issuance of Common Stock for anti-dilution purposes, whether
      or not immediately exercisable or convertible. The number of shares of Common
      Stock deemed to be issued shall be equal to the maximum number of shares of
      Common Stock issuable upon the exercise of such Options or conversion of such
      Convertible Securities. The price per share of Common Stock in such deemed
      issuance or sale of Common Stock shall be determined by dividing: (A) the sum
      of
      (a) the total amount, if any, received or receivable by the Company as
      consideration for the granting of such Options or issuance of such Convertible
      Securities, plus (b) the minimum aggregate amount of additional consideration
      payable to the Company upon the full exercise of all such Options or the full
      conversion of all such Convertible Securities (&#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Total
      Consideration</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;);
      by
      (B) the total maximum number of shares of Common Stock issuable upon the
      exercise of such Options or the conversion of such Convertible
      Securities.</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><em>Voting
      Rights</em></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">Except
      as
      otherwise required by law, each Series B Holder shall be entitled to vote on
      all
      matters submitted to a vote of shareholders of the Company, and shall be
      entitled to that number of votes equal to the number of whole shares of Common
      Stock into which such Series B Holder&#8217;s shares of Series B Preferred Stock could
      then be converted pursuant to the terms of the </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series
      B
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certificate
      at the record date for the determination of shareholders entitled to vote on
      such matter or, if no such record date is established, at the date such vote
      is
      taken or any written consent of shareholders is solicited. Except as otherwise
      required by law or as expressly provided herein, the Series B Holders shall
      vote
      together as a single class on all matters.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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><em>Redemption
      Rights</em></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">Upon
      a
      Triggering Event (as defined below), each Series B Holder shall have the right,
      at such Series B Holder&#8217;s option, to require the Company to redeem all, but not
      less than all, of its then-outstanding Series B Preferred Stock at the
      Liquidation Amount applicable to such shares as of the Redemption Date (the
      &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Redemption
      Amount</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;).
      </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
      &#8220;Triggering Event&#8221; includes one or more of the following events (whatever the
      reason and whether it shall be voluntary or involuntary or effected by operation
      of law or pursuant to any judgment, decree or order of any court, or any order,
      rule or regulation of any administrative or governmental body): </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">(i)
      if,
      during the period in which the Registration Statement shall be required to
      be
      effective pursuant to the Registration Rights Agreement entered by and between
      the Company and the Series B Holders, the effectiveness of the Registration
      Statement lapses for any reason for more than an aggregate of forty-five (45)
      calendar days (which need not be consecutive days) during any twelve (12) month
      period, or the Series B Holders are not be permitted to resell shares of Common
      Stock required to be registered on the Registration Statement for more than
      an
      aggregate of twenty-five (25) calendar days (which need not be consecutive
      days)
      during any twelve (12) month period; </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">(ii)
      the
      Company fails to observe or perform any other covenant, agreement or warranty
      contained in, or otherwise commit any breach of the Transaction Documents,
      and
      such failure or breach shall not, if subject to the possibility of a cure by
      the
      Company, have been remedied within thirty (30) calendar days after the date
      on
      which written notice of such failure or breach shall have been given;
</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">(iii)
      any
      material breach of the agreements required by the Purchase Agreement to be
      delivered to the Series B Holders at the closing thereof; </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">(iv)
      the
      Company shall be party to a Change of Control Transaction; </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">(v)
      the
      Common Stock fails to be listed or quoted for trading on the principal trading
      exchange or market for the Company&#8217;s Common Stock for more than ten (10) Trading
      Days, which need not be consecutive Trading 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">(vi)
      (a)
      the failure to have the registration statement required to be filed pursuant
      to
      Section 3(a) of the Registration Rights Agreement entered into in connection
      with the sale of the Preferred Shares declared effective by the Commission
      (as
      defined by the Registration Rights Agreement) by the one year anniversary of
      the
      closing date of the sale of the Preferred Shares AND the holder of such
      Preferred Shares can not sell any of the common stock to be received upon
      conversion of such Preferred Share pursuant to Rule 144, provided a legal
      opinion with respect to the availability of Rule 144 for the resale of
      Registrable Securities received upon conversion of such Preferred Shares has
      been rendered by a law firm acceptable to both the Company and the Holder as
      evidence that Rule 144 is available for such Registrable Securities; or (b)
      the
      Exercise Price (as defined in the warrants) of the warrants shall have been
      adjusted to the minimum Exercise Price of $0.15 and thereafter a Registration
      Event (as defined in the Registration Rights Agreement) shall have occurred
      or
      is continuing; </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 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">&#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">(vii)
      the
      entry by a court having jurisdiction in the premises of (a) a decree or order
      for relief in respect of the Company or any Subsidiary of a voluntary case
      or
      proceeding under any applicable Federal or State bankruptcy, insolvency,
      reorganization or other similar law or (b) a decree or order adjudging the
      Company or any Subsidiary as bankrupt or insolvent, or approving as properly
      filed a petition seeking reorganization, arrangement, adjustment or composition
      of or in respect of the Company or any Subsidiary under any applicable Federal
      or State law or (c) appointing a custodian, receiver, liquidator, assignee,
      trustee, sequestrator or other similar official of the Company or any Subsidiary
      or of any substantial part of its property, or ordering the winding up or
      liquidation of its affairs, and the continuance of any such decree or order
      for
      relief or any such other decree or order unstayed and in effect for a period
      of
      60 consecutive calendar 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">(viii)
      the commencement by the Company or any Subsidiary of a voluntary case or
      proceeding under any applicable Federal or State bankruptcy, insolvency,
      reorganization or other similar law or of any other case or proceeding to be
      adjudicated a bankrupt or insolvent, or the consent by it to the entry of a
      decree or order for relief in respect of the Company or any Subsidiary in an
      involuntary case or proceeding under any applicable Federal or State bankruptcy,
      insolvency, reorganization or other similar law or to the commencement of any
      bankruptcy or insolvency case or proceeding against it, or the filing by it
      of a
      petition or answer or consent seeking reorganization or relief under any
      applicable Federal or State law, or the consent by it to the filing of such
      petition or to the appointment of or taking possession by a custodian, receiver,
      liquidator, assignee, trustee, sequestrator or other similar official of the
      Company or any Subsidiary or of any substantial part of its property, or the
      making by it of an assignment for the benefit of creditors, or the admission
      by
      it in writing of its inability to pay its debts generally as they become due,
      or
      the taking of corporate action by the Company or any Subsidiary in furtherance
      of any such action; </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">(ix)
      any
      event of default occurs and is declared a default by the Company&#8217;s creditor with
      respect to any material indebtedness in which the amount defaulted exceeds
      US$250,000 in any one instance and US$500,000 in the aggregate, and any
      applicable grace periods in such indebtedness with respect to such event of
      default shall have expired; or </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">(x)
      a
      final judgment or judgments for the payment of money aggregating in excess
      of
      $250,000 are rendered against the Company or any of its Subsidiaries and which
      judgments are not, within sixty (60) calendar days after the entry thereof,
      bonded, discharged or stayed pending appeal, or are not discharged within sixty
      (60) calendar days after the expiration of such stay; provided, however, that
      any judgment which is covered by insurance or an indemnity from a credit worthy
      party shall not be included in calculating the $250,000 amount set forth above
      so long as the Company provides the Holder a written statement from such insurer
      or indemnity provider (which written statement shall be reasonably satisfactory
      to the Holder) to the effect that such judgment is covered by insurance or
      an
      indemnity and the Company will receive the proceeds of such insurance or
      indemnity within thirty (30) calendar days of the issuance of such
      judgment.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Registration
      Rights</em></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">The
      Company will use its best efforts to cause a Registration Statement on Form
      SB-2
      (the &#8220;Registration Statement&#8221;) relating to the resale of the common stock
      received by the holders of the Preferred Stock upon conversion of the Preferred
      Stock (the &#8220;Converted Common Stock&#8221;) to be filed with the Securities and
      Exchange Commission within 30 days following the Closing (the &#8220;Filing Deadline
      Date&#8221;) and shall use its commercially reasonable efforts to cause such
      Registration Statement to become effective within 150 days following the
      Closing. Subject to certain blackout periods, the Company is obligated to use
      best efforts to maintain the Registration Statement&#8217;s effectiveness for such
      time as is required to permit the persons with the registered shares to be
      able
      to sell them in the public market either under the registration statement or
      Rule 144(k). In the event that it does not meet its registration obligations,
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">then
      the
      Company has agreed to each purchaser, as partial liquidated damages for the
      damages to the purchaser by reason thereof, and not as a penalty, at a rate
      equal to two percent (2%) of the purchase price of the shares held by such
      Purchaser per month, for each calendar month of the Registration Default Period
      (pro rated for any period less than 30 days), subject to a cumulative maximum
      value of 14%; provided, however, if a breach of the registration rights
      agreement obligation occurs (or is continuing) on a date more than one year
      after the Purchaser acquired the Registrable Securities (and thus the one year
      holding period under Rule 144(d) has elapsed), liquidated damages shall be
      paid
      only with respect to that portion of a purchaser&#8217;s registrable securities that
      cannot then be immediately resold in reliance on Rule 144; </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">provided
      a legal opinion with respect to the availability of Rule 144 for the resale
      of
      Registrable Securities received upon conversion of the Series B Preferred Shares
      has been rendered by a law firm acceptable to both the Company and the Holder
      as
      evidence that Rule 144 is available for such Registrable Securities.
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
      such
      payment shall be made and in cash and is due and payable within five business
      days after the end of each calendar month of the Registration Default Period
      until the termination of the Registration Default Period and within five
      business days after such termination. The penalty payment may be made at the
      election of the Company in cash or shares of common stock valued at 50% of
      the
      closing bid price for such Common Stock (on the securities market at which
      time
      constitutes the principal securities market for the Common Stock) on the day
      such penalty is due. </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: 10pt; FONT-FAMILY: ">58</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </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="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>WARRANTS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      connection with the Offering, Cyber Merchants will issue the investors warrants
      to purchase 100% of the amount of shares of common stock into which the Series
      B
      Preferred Stock may be converted. Cyber Merchants will also issue a warrant
      to
      purchase a number of shares of common stock equal to 10% of the shares of common
      stock that the Series B Preferred Stock are convertible to the Placement Agents.
      The warrants will be immediately exercisable at any time for a period of five
      years at an exercise price equal to 125% </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">of
      the
      Conversion Price. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Anti-Takeover
      Provisions</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">Cyber
      Merchants&#8217; restated Articles of Incorporation and Bylaws contain provisions that
      may make it more difficult for a third party to acquire or may discourage
      acquisition bids for the Company. Cyber Merchants&#8217; Board of Directors is
      authorized, without action of its shareholders, to issue authorized but unissued
      common stock and preferred stock. The existence of undesignated preferred stock
      and authorized but unissued common stock enables Cyber Merchants, and the
      combined Company following the Exchange, to discourage or to make it more
      difficult to obtain control of us by means of a merger, tender offer, proxy
      contest or otherwise. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS</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="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cyber&#8217;s
      common stock, having no par value per share ("Common Stock"), is traded on
      the
      Over-The-Counter Bulletin Board ("OTCBB") under the symbol "CMXG". Following
      the
      Combination, the combined Company will be continue to be traded on the
      OTCBB.</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">The
      following table sets forth, for the periods indicated, the reported high and
      low
      closing bid quotations for Cyber&#8217;s common stock as reported on the OTCBB. The
      bid prices reflect inter-dealer quotations, do not include retail markups,
      markdowns or commissions and do not necessarily reflect actual transactions.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><a name="node9"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
      Stock</font></a></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div align="center">
      <table border="0" bordercolor="#000000" cellpadding="0" cellspacing="0" width="75%">

          <tr>
            <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">Quarter
                Ended</font></div>
            </td>
            <td width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" 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">High
                Bid</font></div>
            </td>
            <td width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
            <td align="left" 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">Low
                Bid</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="25%" style="border-bottom: medium none;">&#160;</td>
            <td width="1%">&#160;</td>
            <td align="left" valign="middle" width="12%" style="border-bottom: medium none;">&#160;</td>
            <td width="1%">&#160;</td>
            <td align="left" valign="middle" width="12%" style="border-bottom: medium none;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="25%" 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">May
                31, 2006</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td align="left" valign="middle" width="12%" 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">1.25</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td align="left" valign="middle" width="12%" 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">0.30</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="25%" 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">February
                28, 2006</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td align="left" valign="middle" width="12%" 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">0.51</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td align="left" valign="middle" width="12%" 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">0.30</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="25%" style="border-bottom: white;">&#160;</td>
            <td width="1%">&#160;</td>
            <td align="left" valign="middle" width="12%" style="border-bottom: white;">&#160;</td>
            <td width="1%">&#160;</td>
            <td align="left" valign="middle" width="12%" style="border-bottom: white;">&#160;</td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="25%" 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">November
                30, 2005</font></div>
            </td>
            <td width="1%">&#160;</td>
            <td align="left" valign="middle" width="12%" 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">0.55</font></div>
            </td>
            <td width="1%">&#160;</td>
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                31, 2005</font></div>
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                28, 2005</font></div>
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                30, 2004</font></div>
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                31, 2005</font></div>
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            <td align="left" valign="middle" width="12%" style="border-bottom: #ccffcc;">
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            <td align="left" valign="middle" width="12%" style="border-bottom: #ccffcc;">
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                31, 2005</font></div>
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            <td align="left" valign="middle" width="12%" style="border-bottom: #ccffcc;">
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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">February
                28, 2004</font></div>
            </td>
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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">2.81</font></div>
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            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Note:
      </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Quotations
      on and prior to July 22, 2005 were adjusted for a 10-for-85 reverse stock split
      on July 22, 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>Transfer
      Agent and Registrar</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      transfer agent and registrar for the common stock is U.S. Stock Transfer and
      Trust Company. Its address is 1745 Gardena Ave., Glendale, California
      91204-2991, and its telephone number is (818) 502-1404. </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>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">59</font></div>
        <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="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>Dividend
      Policy</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: 27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      do not
      currently intend to pay any cash dividends in the foreseeable future on our
      Common Stock and, instead, intend to retain earnings, if any, for future
      operation and expansion. Any decision to declare and pay dividends in the future
      will be made at the discretion of our board of directors and will depend on,
      among other things, our results of operations, cash requirements, financial
      condition, contractual restrictions and other factors that our board of
      directors may deem relevant.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>LEGAL
      PROCEEDINGS</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">We
      are
      from time to time subject to other claims and litigation arising in the ordinary
      course of business. In the opinion of management, the ultimate outcome of claims
      and litigation of which management is aware will not have a material adverse
      effect on our consolidated financial position or results of operation.
      Management is not currently aware of any claims and litigation against
      Infosmart.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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"><u>In
      Re:
      Factory 2-U Stores, Inc.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      On March
      7, 2006, a complaint was filed against Cyber Merchants in a Chapter 7 bankruptcy
      proceeding in U.S. Bankruptcy Court in the District of Delaware in the matter
      captioned </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>In
      Re:
      Factory 2-U Stores, Inc.</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      The
      complaint seeks to recover from the Company $91,572 in alleged preferential
      transfers made to the Cyber Merchants by the debtor during the ninety-day period
      prior to the filing of the debtor's bankruptcy petition. Cyber Merchants intends
      to defend against such preference claim by asserting that such transfers were
      made in the ordinary course of business and such other available defenses.
      To
      the extent that Cyber Merchants incurs any losses, costs or damages with respect
      to the preference claim, including attorneys' fees and related costs, Cyber
      Merchants believes it may recover such losses, costs and damages from Frank
      Yuan
      and ASAP pursuant to the indemnification provisions under the Transfer
      Agreement. The Company has informed Mr. Yuan and ASAP that it intends to seek
      indemnification from them with respect to the preference claim. Further, the
      Company has informed Mr. Yuan and ASAP that the $50,000 reserve originally
      due
      to be paid March 30, 2006 under the terms of the Transfer Agreement will be
      retained by the Company until this preference claim is resolved to satisfy
      any
      potential indemnity claims.</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"><u>Stanley
      Rosner (&#8220;Rosner&#8221;) v. World Wide Magic Net, Inc. (n/k/a Cyber) and Burlington
      Coat Factory</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">,
      New
      York State Supreme Court, Nassau County, Index No. 98-006524. Breach of
      contract, fraud and tortuous interference action seeking $5,000,000 in
      compensatory damages, unspecified punitive damages and declaratory relief.
      By
      stipulation parties dated May 7, 1998, Rosner agreed to transfer the action
      to
      Supreme Court, New York County, after conceding Nassau County was not the proper
      venue for the action. Since that date, Rosner has neither transferred the case
      nor pursued it further.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>RECENT
      SALES OF UNREGISTERED SECURITIES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Reference
      is made to Item&#160;3.02 of this Current Report on Form 8-K for a description
      of recent sales of unregistered securities, which is 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">&#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>INDEMNIFICATION
      OF OFFICERS AND DIRECTORS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the provisions of California&#8217;s Corporation Code, Cyber has adopted the
      following indemnification provisions in its restated Articles of Incorporation
      for its directors and officers:</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: 36pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;(a)
      </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: -5.35pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Directors.
      The liability of the directors of this corporation for monetary damages shall
      be
      eliminated to the fullest extent permissible under California law.</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: 36pt; 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)
      </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: -5.35pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Directors
      and Officers. The corporation is authorized to indemnify the directors and
      officers of the corporation to the fullest extent permissible under California
      law.&#8221;</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, Cyber&#8217;s Bylaws contain the following provision regarding
      indemnification of its officers, directors, employees or other agents of the
      corporation:</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: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8220;The
      corporation has the power to indemnify any person who is or was a director,
      officer, employee, or other agent of this corporation or of its predecessor,
      or
      is or was serving as such of another corporation, partnership, joint venture,
      trust, or other enterprise, at the request of this corporation against expenses,
      judgments, fines, settlements, and other amounts actually and reasonably
      incurred in connection with any threatened, pending, or completed action or
      proceeding, whether civil, criminal, administrative, or investigative, as
      provided in California Corporations Code Section 317 as that section now exists
      or may from time to time be amended to provide.&#8221;</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: 10pt; FONT-FAMILY: ">60</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
      <div>&#160;</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">Section&#160;204
      of the California General Corporation Law allows a corporation, among other
      things, to eliminate or limit the personal liability of a director for monetary
      damages in an action brought by the corporation itself or by way of a derivative
      action brought by shareholders for breach of a director&#8217;s duties to the
      corporation and its shareholders. The provision may not eliminate or limit
      liability of directors for the following specified actions, however:
      (i)&#160;for acts or omissions that involve intentional misconduct or a knowing
      and culpable violation of law; (ii)&#160;for acts or omissions that a director
      believes to be contrary to the best interests of the corporation or its
      shareholders, or that involve the absence of good faith on the part of the
      director; (iii)&#160;for any transaction from which a director derived an
      improper personal benefit; (iv)&#160;for acts or omissions that show a reckless
      disregard of the director&#8217;s duty to the corporation or its shareholders in
      circumstances in which the director was aware, or should have been aware, in
      the
      ordinary course of performing a director&#8217;s duties, of a risk of serious injury
      to the corporation or its shareholders; (v)&#160;for acts or omissions that
      constitute an unexcused pattern of inattention that amounts to an abdication
      of
      the director&#8217;s duty to the corporation or its shareholders; (vi)&#160;for
      transactions between the corporation and a director, or between corporations
      having interrelated directors; and (vii)&#160;for improper distributions and
      stock dividends, loans and guaranties. The provision does not apply to acts
      or
      omissions occurring before the date that the provision became effective and
      does
      not eliminate or limit the liability of an officer for an act or omission as
      an
      officer, regardless of whether that officer is also a director. </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">Section&#160;317
      of the California General Corporation Law gives a corporation the power to
      indemnify any person who was or is a party, or is threatened to be made a party,
      to any proceeding, whether threatened, pending, or completed, and whether civil,
      criminal, administrative or investigative, by reason of the fact that that
      person is or was a director, officer, employee or agent of the corporation,
      or
      is or was serving at the request of the corporation as a director, officer,
      employee or agent of another corporation, partnership, joint venture, trust
      or
      other enterprise. A corporation may indemnify such a person against expenses,
      judgments, fines, settlements and other amounts actually or reasonably incurred
      in connection with the proceeding, if that person acted in good faith, and
      in a
      manner that that person reasonably believed to be in the best interest of the
      corporation; and, in the case of a criminal proceeding, had no reasonable cause
      to believe the conduct of the person was unlawful. In an action by or in the
      right of the corporation, no indemnification may be made with respect to any
      claim, issue or matter (a)&#160;as to which the person shall have been adjudged
      to be liable to the corporation in the performance of that person&#8217;s duty to the
      corporation and its shareholders, unless and only to the extent that the court
      in which such proceeding was brought shall determine that, in view of all of
      the
      circumstances of the case, the person is fairly and reasonably entitled to
      indemnity for expenses; and (b)&#160;which is settled or otherwise disposed of
      without court approval. To the extent that any such person has been successful
      on the merits in defense of any proceeding, or any claim, issue or matter
      therein, that person shall be indemnified against expenses actually and
      reasonably incurred in connection therewith. Indemnification is available only
      if authorized in the specific case by a majority of a quorum of disinterested
      directors, by independent legal counsel in a written opinion, by approval of
      the
      shareholders other than the person to be indemnified, or by the court. Expenses
      incurred by such a person may be advanced by the corporation before the final
      disposition of the proceeding upon receipt of an undertaking to repay the amount
      if it is ultimately determined that the person is not entitled to
      indemnification. </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">Section&#160;317
      of the California General Corporation Law further provides that a corporation
      may indemnify its officers and directors in excess of the statutory provisions
      if authorized by its Articles of Incorporation and that a corporation may
      purchase and maintain insurance on behalf of any officer, director, employee
      or
      agent against any liability asserted or incurred in his or her capacity, or
      arising out of his or her status with the corporation. </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
      indemnification provisions described above provide coverage for claims arising
      under the Securities Act and the Exchange Act. Insofar as indemnification for
      liabilities arising under the Securities Act may be permitted to directors,
      officers and controlling persons of the Company pursuant to the Company&#8217;s
      Articles of Incorporation, Bylaws, the California Corporations Code, or
      otherwise, we have been advised that in the opinion of the SEC, such
      indemnification is against public policy as expressed in the Securities Act
      and
      is, therefore, unenforceable.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -63pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item&#160;3.02</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>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">In
      August&#160;2006 and immediately prior to the closing, the Company issued
      2,850,000 shares of Cyber&#8217;s common stock to Worldwide Gateway Co., Ltd.
      (&#8220;Gateway&#8221;) for Gateway&#8217;s services as a consultant to Cyber connection with the
      Exchange (&#8220;Gateway Shares&#8221;). Such securities were not registered under the
      Securities Act of 1933. The issuance of these securities was exempt from
      registration under Section&#160;4(2) of the Securities Act. Cyber made this
      determination based on the representations of Gateway, which included, in
      pertinent part, that such shareholder&#160;was not a "U.S. person" as that term
      is defined in Rule 902(k) of Regulation S under the Act, and that such
      shareholders were acquiring our common stock, for investment purposes for their
      own respective accounts and not as nominees or agents, and not with a view
      to
      the resale or distribution thereof, and that Gateway understood that the shares
      of our common stock may not be sold or otherwise disposed of without
      registration under the Securities Act or an applicable exemption therefrom.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; 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">
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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: 10pt; FONT-FAMILY: ">61</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
      <div>&#160;</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">Pursuant
      to the Exchange Agreement, Cyber issued 1,000,000 shares of its Series A
      Preferred Stock to the Infosmart shareholders in exchange for 100% of the
      outstanding shares of Infosmart. Each share of the Series A Preferred Stock
      will
      be convertible into 116.721360 shares of the Company&#8217;s common stock. Such
      securities were not registered under the Securities Act of 1933. The issuance
      of
      these shares was exempt from registration pursuant to Regulation S under the
      Securities Act of 1933. Cyber made this determination based on the
      representations of Gateway, which included, in pertinent part, that such
      shareholders were not a "U.S. person" as that term is defined in Rule 902(k)
      of
      Regulation S under the Act, and that such shareholders were acquiring our common
      stock, for investment purposes for their own respective accounts and not as
      nominees or agents, and not with a view to the resale or distribution thereof,
      and that such shareholders understood that the shares of our common stock may
      not be sold or otherwise disposed of without registration under the Securities
      Act or an applicable exemption therefrom. </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">Pursuant
      to the Financing, Cyber issued 1,092,857.143 shares of its Series B Preferred
      Stock to the Investors in exchange for gross proceeds of approximately
      $7,650,000 that the Company received pursuant to Subscription Agreements entered
      into with the Investors for the purchase of its Series B Preferred Stock at
      a
      price of $7.00 per share. When converted to common stock, the conversion price
      per share is $0.261 per share of common stock, subject to standard adjustments.
      Such securities were not registered under the Securities Act of 1933. The
      issuance of these securities was exempt from registration under
      Section&#160;4(2) of the Securities Act. Cyber made this determination based on
      the representations of Gateway, which included, in pertinent part, that such
      shareholders were either (a) "accredited investors" within the meaning of Rule
      501 of Regulation D promulgated under the Securities Act, or (b) not a "U.S.
      person" as that term is defined in Rule 902(k) of Regulation S under the Act,
      and that such shareholders were acquiring our common stock, for investment
      purposes for their own respective accounts and not as nominees or agents, and
      not with a view to the resale or distribution thereof, and that Gateway
      understood that the shares of our common stock may not be sold or otherwise
      disposed of without registration under the Securities Act or an applicable
      exemption therefrom.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 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
      connection with Financing and the issuance of the Series B Preferred Stock
      to
      the Investors, Cyber also issued warrants to the Investors to purchase the
      number of shares of the common stock of Cyber Merchants into which such Series
      B
      Preferred Stock are convertible (the &#8220;Conversion Shares&#8221;). Cyber issued warrants
      to the Investors to purchase an aggregate of 29,310,345 shares common stock.
      The
      warrants have an exercise price of $0.326 per share, subject to adjustments.
      In
      connection with the Financing, Cyber also issued warrants to placement agents&#8217;
Keating Securities, LLC and Axiom Capital Management, Inc. for the purchase
      of
      an aggregate of 2,931,035 shares at an exercise price of $0.326. The warrants
      are fully vested and have a 5-year term. Such securities were not registered
      under the Securities Act of 1933. The issuance of these securities was exempt
      from registration under Section&#160;4(2) of the Securities Act. Cyber made this
      determination based on the representations of the Investors, which included,
      in
      pertinent part, that such shareholders were either (a) "accredited investors"
      within the meaning of Rule 501 of Regulation D promulgated under the Securities
      Act, or (b) not a "U.S. person" as that term is defined in Rule 902(k) of
      Regulation S under the Act, and that such shareholders were acquiring our common
      stock, for investment purposes for their own respective accounts and not as
      nominees or agents, and not with a view to the resale or distribution thereof,
      and that&#160;the Investors&#160;understood that the shares of our common stock
      may not be sold or otherwise disposed of without registration under the
      Securities Act or an applicable exemption therefrom.</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">After
      the
      completion of the Exchange and the Financing, the Infosmart Shareholders
      (including HIG) will own 1,000,000 Series A Preferred Shares (equivalent to
      116,721,360 shares of Cyber&#8217;s common stock on an as-converted basis), the
      Investors received 1,092,857.143 Series B Preferred Stock that is convertible
      into approximately 29,310,345 shares of Cyber&#8217;s common stock, and the current
      Cyber stockholders (including Gateway) will own 12,969,040 shares of Cyber&#8217;s
      common stock. Upon the mandatory conversion of the Series A Preferred Stock,
      the
      Infosmart Shareholders together with the Investors (assuming the Investors
      elect
      to convert all of their Series B Preferred Stock) will own approximately 91.84%
      of the total outstanding shares of Cyber&#8217;s common stock, and the current Cyber
      stockholders will own approximately 8.16% of the total outstanding shares of
      Cyber&#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">&#160;</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: 10pt; FONT-FAMILY: ">62</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
      <div>&#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>Item&#160;5.01</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27.05pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Changes
      in Control of Registrant. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      explained more fully in Item 2.01, in connection with the Exchange
      Agreement,&#160;Cyber issued 1,000,000 shares of its Series A Preferred Stock to
      the Infosmart shareholders in exchange for the transfer of 100% of the
      outstanding shares of Infosmart&#8217;s capital stock by the Infosmart Shareholders to
      Cyber. Further, Cyber issued 1,092,857.143 shares of Series B Preferred Stock
      to
      the Investors in the Financing. Thus, at the Closing of the Exchange and the
      Financing, the Infosmart Shareholders (including HIG) owned 1,000,000 Series
      A
      Preferred Shares (equivalent to 116,721,360 shares of Cyber&#8217;s common stock on an
      as-converted basis), the Investors received 1,092,857.143 Series B Preferred
      Stock that is convertible into approximately 29,310,345 shares of Cyber&#8217;s common
      stock, and the current Cyber stockholders (including Gateway) owned 12,969,040
      shares of Cyber&#8217;s common stock. The holders of Series A and Series B Preferred
      Shares are entitled to vote together with the holders of the common stock,
      as a
      single class, upon all matters submitted to holders of common stock for a vote.
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
      Series A and Series B Preferred Share will carry a number of votes equal to
      the
      number of shares of common stock issuable upon conversion based on the then
      applicable conversion rate. As such, i</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">mmediately
      following the Exchange and Financing transactions, the Infosmart Shareholders
      (including HIG) held approximately 73.41% of the total combined voting power
      of
      all classes of Cyber&#8217;s outstanding stock entitled to vote. Reference is made to
      the disclosures set forth under Item 2.01 of this Current Report on Form 8-K,
      which disclosure 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="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font size="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      connection with the Closing of the Exchange, and as explained more fully in
      Item
      2.01 above under the section titled &#8220;Management&#8221; and in Item 5.02 of the Current
      Report on Form 8-K that is being filed concurrently with this Form 8-K,
      effective on August 16, 2006, Luca Toscani, Margie Blackwell, Jeff Andrews
      and
      Kevin R. Keating resigned as members of Cyber&#8217;s board of directors, and Kevin R.
      Keating resigned as President, Secretary and Treasurer of Cyber. Further,
      effective August 16, 2006, Kwok Chung, Sze Po Nei, Andrew Chang and Godwin
      Wong
      (the &#8220;New Cyber Directors&#8221;) were appointed as members of Cyber&#8217;s board of
      directors. Finally, effective August 16, 2006, the New Cyber Directors appointed
      Kwok Chung as the Chief Executive Officer and President of Cyber, and they
      appointed Sze Po Nei as the Chief Financial Officer, Treasurer and Secretary
      of
      Cyber.</font></font></div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      closing of the transaction under the Exchange Agreement, as amended, which
      resulted in the change of control of the registrant, occurred on August 16,
      2006. A copy of the Exchange Agreement is included as Exhibit 2.1 to the Current
      Report on Form 8-K filed by Cyber on July 12, 2006, and the First Amendment
      to
      the Exchange Agreement is included as Exhibit 2.5 to 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">&#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 style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
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        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
      <div>&#160;</div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -63pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      5.03</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Amendments
      to Articles of Incorporation or Bylaws; Change in Fiscal
      Year</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">Effective
      as of the Closing, pursuant to the provisions of the bylaws of Cyber, applicable
      to all holders of capital stock, the Board of Directors of Cyber, by resolution
      increased the authorized number of directors on the Board of Directors of Cyber
      from six to seven.</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">Cyber&#8217;s
      Certificate of Determination, Preferences, Rights and Limitations of Series
      A
      Convertible Preferred Stock and its Certificate of Determination, Preferences,
      Rights and Limitations of Series B Convertible Preferred Stock, as filed with
      the Secretary of State of California, are attached as Exhibits 3.3 and
      3.4</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      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: 36pt; 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">On
      August
      16, 2006, the Board of Directors, by written resolution, approved a resolution
      that revises Cyber&#8217;s bylaws to increase the number of directors allowed for the
      Company to seven (7).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      August
      16, 2006, the Board of Directors, by written resolution, agreed to change the
      Company&#8217;s fiscal year end effective August 16, 2006. The Company&#8217;s current
      fiscal year end is May 31. The new fiscal year end will now be December 31.
      The
      report to cover the transition period will be the Form 10-KSB</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      Annual
      Report. </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: 63pt; TEXT-INDENT: -63pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      5.06</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>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="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
          explained more fully in Item 2.01 above, Cyber was a "shell company" (as
          such
          term is defined in Rule 12b-2 under the Securities Exchange Act of 1934,
          as
          amended) immediately before the Closing of the Exchange. As a result of
          the
          Exchange, Infosmart became the wholly owned subsidiary of Cyber and became
          Cyber&#8217;s main operational business. Consequently, Registrant believes that the
          Exchange has caused it to cease to be a shell company. For information
          about the
          Exchange, please see the information set forth above under Item 2.01 of
          this
          Current Report on Form 8-K commencing on page 3, which information is
          incorporated herein by reference.</font></div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -63pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item&#160;9.01</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27.05pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Financial
      Statement and Exhibits. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -63pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)
      </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Audited Consolidated Financial Statements of Infosmart Group Limited as of
      December 31, 2005 and 2004 are filed as Exhibit 99.2 to this current report
      and
      are incorporated herein by reference.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Unaudited Condensed Consolidated&#160;Financial Statements of Infosmart Group
      Limited as of June 30, 2006 and for the six months ended June 30, 2006 and
      2005
      are filed as Exhibit 99.3 to this current report and are 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">&#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: 10pt; FONT-FAMILY: ">64</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)
        </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">PRO
        FORMA
        FINANCIAL INFORMATION.</font></div>
    </div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      following pro forma financial information is filed as Exhibit 99.4 to this
      Current Report 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>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 45pt;">
            </td>
            <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="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                Unaudited Pro Forma Condensed Combined Balance Sheet of Cyber Merchants
                Exchange, Inc. and Infosmart Group Limited as of May 31,
                2006.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 45pt;">
            </td>
            <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="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                Unaudited Pro Forma Condensed Combined Statements of Operations of
                Cyber
                Merchants Exchange, Inc. and Infosmart Group Limited for August 25,
                2005
                (Inception) to May 31, 2006.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)&#160;
      SHELL COMPANY TRANSACTIONS</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font size="2">Reference
      is made to Items &#160;9.01(a) and 9.01(b) and
      the exhibits referred to therein, which are 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">&#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">(d)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      EXHIBITS</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EXHIBIT
      INDEX</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
      <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td valign="bottom" width="7%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exhibit
                <u>Number</u></strong></font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;</font></div>
            </td>
            <td align="left" valign="bottom" width="74%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Description</u></strong></font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.1</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="bottom" width="74%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amended
                and Restated Securities Purchase Agreement, dated August 25, 2005
                (5)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.2</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="bottom" width="74%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Transfer
                and Assumption Agreement dated as of May 31, 2005 (5)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.3</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="bottom" width="74%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exchange
                Agreement by and among Cyber, KI Equity, Hamptons Investment Group,
                Ltd.,
                Prime and the Prime Shareholders dated July 7, 2006
                *(6)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.4</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="bottom" width="74%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Guarantee
                and Assumption Agreement by and among Cyber, Infosmart, IS International,
                IS Technology and IS Media dated July 7, 2006 (6)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
              <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">2.5</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="bottom" width="74%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">First
                Amendment to the Exchange Agreement dated August 16, 2006 between
                Cyber,
                KI Equity Partners, LLC, Hamptons Investment Group, Ltd., Prime,
                Prime
                Shareholders, Infosmart Group Ltd. and the Infosmart Shareholders
                *</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
              <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">2.6</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="bottom" width="74%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amended
                and Restated Guarantee and Assumption Agreement by and among Cyber,
                IS
                International, IS Technology and IS Media dated August 16, 2006
                </font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
              <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">2.7</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="bottom" width="74%">
              <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">Voting
                Agreement by and among the Infosmart Stockholders and KI Equity dated
                August 16, 2006</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
              <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">2.8</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="bottom" width="74%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Escrow
                Agreement by and among Cyber, KI Equity, Infosmart, the Infosmart
                Stockholders and Richardson, as escrow agent, dated August 16,
                2006</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
              <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">2.9</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="bottom" width="74%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Financial
                Advisory Agreement by an among Keating Securities LLC and Cyber Merchants
                Exchange Inc. dated August 16, 2006</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.1</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="bottom" width="74%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Articles
                of Incorporation (1)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.2</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="bottom" width="74%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Bylaws
                (1)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.3</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="bottom" width="74%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certificate
                Of Determination Of Rights, Preferences, Privileges And Restrictions
                Of
                Series A Convertible Preferred Stock</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.4</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="bottom" width="74%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certificate
                Of Determination Of Rights, Preferences, Privileges And Restrictions
                Of
                Series B Convertible Preferred Stock</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.1</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="top" width="74%">
              <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">Lock-Up
                Agreement (2)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.2</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="top" width="74%">
              <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">Specimen
                Stock Certificate for Shares of Common Stock of the Company
                (4)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.3</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="top" width="74%">
              <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">Warrant
                expiring October 15, 2002 issued by the Company to Burlington Coat
                Factory
                Warehouse Corporation on October 15, 1997 (1)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.4</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="top" width="74%">
              <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">Warrant
                expiring February 10, 2004 issued by the Company to Imperial Bank
                on
                February 10, 1999 (4)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.5</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="top" width="74%">
              <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">Warrant
                expiring May 25, 2005 issued by the Company to Factory 2-U on May
                25, 2000
                (3)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="7%">
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                Agreement with Burlington Coat Factory Warehouse Corporation
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            <td align="left" valign="top" width="74%">
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            <td align="left" valign="top" width="74%">
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                World Wide Magic Net, Inc. Stock Option Plan (1)</font></div>
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            <td align="left" valign="top" width="74%">
              <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">1999
                Stock Option Plan (4)</font></div>
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            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="top" width="74%">
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            <td align="left" valign="top" width="74%">
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            <td valign="top" width="7%">
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            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="top" width="74%">
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            <td align="left" valign="top" width="74%">
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            <td valign="top" width="7%">
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            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="top" width="74%">
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            <td valign="top" width="7%">
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            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td align="left" valign="top" width="74%">
              <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">Factory
                2-U Stores, Inc. - Joint Marketing and Cooperation Agreement
                (4)</font></div>
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              </td>
              <td align="left" valign="bottom" width="64%">
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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="64%">
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              <td align="left" valign="bottom" width="64%">
                <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
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              <td valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.18</font></div>
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              <td align="left" valign="bottom" width="64%">
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              </td>
            </tr>
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              <td align="left" valign="bottom" width="64%">
                <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Appointment
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            </tr>
            <tr>
              <td valign="top" width="6%">
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              <td align="left" valign="bottom" width="2%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="64%">
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                  Letter Agreement by and among Andrew Chang and Infosmart Group
                  Limited
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            </tr>
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              <td valign="top" width="6%">
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              <td align="left" valign="bottom" width="2%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="64%">
                <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Appointment
                  Letter Agreement by and among Kwok Chung and Infosmart Group Limited
                  dated
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              </td>
            </tr>
            <tr>
              <td valign="top" width="6%">
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              <td align="left" valign="bottom" width="2%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="64%">
                <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cooperation
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                  Ltd. dated December 1, 2005</font></div>
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            </tr>
            <tr>
              <td valign="top" width="6%">
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              <td align="left" valign="bottom" width="2%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="64%">
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            </tr>
            <tr>
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              <td align="left" valign="bottom" width="2%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="64%">
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              </td>
            </tr>
            <tr>
              <td valign="top" width="6%">
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              </td>
              <td align="left" valign="bottom" width="64%">
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              </td>
            </tr>
            <tr>
              <td valign="top" width="6%">
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              </td>
              <td align="left" valign="bottom" width="64%">
                <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">General
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              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="6%">
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              <td align="left" valign="bottom" width="2%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
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                <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Contract
                  for two Automatic Dual Track DVDR Manufacturing Systems "Streamline
                  II
                  DVDR" between Infoscience Media Ltd. and ACME Cassette Manufacturing
                  Limited dated September 15, 2004</font></div>
              </td>
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            <tr>
              <td valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">17.1</font></div>
              </td>
              <td align="left" valign="bottom" width="2%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="64%">
                <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Letter
                  of Resignation from Kevin R. Keating to the Board of Directors
<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(7)</font></font></div>
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            <tr>
              <td valign="top" width="6%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">17.2</font></div>
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              <td align="left" valign="bottom" width="2%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="bottom" width="64%">
                <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Letter
                  of Resignation of directors Jeff Andrews, Margie Blackwell and
                  Luca
                  Toscani to the Board of Directors (7)</font></div>
              </td>
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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">21.1</font></div>
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                <div style="MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">List
                  of Subsidiaries</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">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">23.1</font></div>
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              <td align="left" valign="bottom" width="2%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
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            <tr>
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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">99.1</font></div>
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              <td align="left" valign="bottom" width="2%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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              <td align="left" valign="bottom" width="64%">
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                  Statements for the Years Ended December 31, 2005 and
                  2004</font></div>
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              <td align="left" valign="bottom" width="64%">
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                  Statements for the Quarters Ended June 30, 2006 and
                  2005</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">&#160;</div>
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                <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">Pro
                  Forma Financial Information</font></div>
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              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Filed
                on May 6, 1999 as an exhibit to the Company's Registration Statement
                on
                Form SB-2 (File No. 333-60487), as amended, and incorporated herein
                by
                reference.</font></div>
            </td>
          </tr>

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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>
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          <tr valign="top" style="line-height: 1.25;">
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              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Filed
                on January 27, 2000 as an exhibit to a report by the Company on a
                Form 8-A
                and incorporated herein by
                reference.</font></div>
            </td>
          </tr>

      </table>
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              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Filed
                on July 18, 2000 as an exhibit to a report by the Company on a Form
                8-K
                dated June 30, 2000 and incorporated herein by
                reference.</font></div>
            </td>
          </tr>

      </table>
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    <div>
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          <tr valign="top" style="line-height: 1.25;">
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              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Filed
                on September 29, 2000 as an exhibit to the Company's report on Form
                10-KSB
                for the fiscal year ended June 30, 2000 and incorporated herein by
                reference.</font></div>
            </td>
          </tr>

      </table>
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    <div>
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          <tr valign="top" style="line-height: 1.25;">
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              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Filed
                on August 26, 2005 as an exhibit to a report by the Company on a
                Form 8-K
                dated August 25, 2005 and incorporated herein by
                reference.</font></div>
            </td>
          </tr>

      </table>
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    <div>
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          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 27pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(6)</font></td>
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              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Filed
                on July 12, 2006 as an exhibit to a report by the Company on a Form
                8-K
                dated July 7, 2006 and incorporated herein by
                reference.</font></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">
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        <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: -45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
        <div>
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              <tr valign="top" style="line-height: 1.25;">
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                  <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Filed
                    as an exhibit to the Company's&#160;other Current Report on Form 8-K filed
                    concurrently with this Form 8-K.</font></div>
                </td>
              </tr>

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      schedules to this document are not being filed herewith. &#160;Cyber agrees to
      furnish supplementally a copy of any such schedule to the Securities and
      Exchange Commission upon request.. </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">[The
      remainder of this page left blank intentionally.]</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this Report on Form 8-K to be signed on its behalf by the
      undersigned hereunto duly authorized. </font></div>
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          <tr valign="top" bgcolor="#ffffff">
            <td width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="49%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
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                MERCHANTS EXCHANGE INC.</strong></font></div>
            </td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
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            <td valign="bottom"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Date:&#160;August
              23, 2006</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">By:&#160;&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
              Kwok Chung</font></td>
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                Chung</font></div>
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: "><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
              Executive Officer</font></font></td>
          </tr>

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Unassociated Document
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 (Date of earliest event reported):
August 16, 2006
CYBER
      MERCHANTS EXCHANGE, INC.
(Exact
      name of registrant as specified in Charter)
California
001-15643
95-4597370
(State
                or other jurisdiction of
incorporation
                or organization)
(Commission
                File No.)
(IRS
                Employee Identification
                No.)
5th
      Floor, QPL Industrial Building, 126-140 Texaco Road,
Tsuen
      Wan, Hong Kong
(Address
      of Principal Executive Offices)
(852)
2944-9905
(Issuer
      Telephone number)
Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions (see General Instruction A.2. below):
¨
Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
      240.14d-2(b))
¨
Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
      240.13e-4(c))
Forward
      Looking Statements
This
      Form
      8-K and other reports filed by Registrant from time to time with the Securities
      and Exchange Commission (collectively the "Filings") contain or may contain
      forward looking statements and information that are based upon beliefs of,
      and
      information currently available to, Registrant's management as well as estimates
      and assumptions made by Registrant's management. When used in the filings the
      words "anticipate", "believe", "estimate", "expect", "future", "intend", "plan"
or the negative of these terms and similar expressions as they relate to
      Registrant or Registrant's management identify forward looking statements. Such
      statements reflect the current view of Registrant with respect to future events
      and are subject to risks, uncertainties, assumptions and other factors
      (including the risks contained in the section of this report entitled "Risk
      Factors") relating to Registrant's industry, Registrant's operations and results
      of operations and any businesses that may be acquired by Registrant. Should
      one
      or more of these risks or uncertainties materialize, or should the underlying
      assumptions prove incorrect, actual results may differ significantly from those
      anticipated, believed, estimated, expected, intended or planned.
Although
      Registrant believes that the expectations reflected in the forward looking
      statements are reasonable, Registrant cannot guarantee future results, levels
      of
      activity, performance or achievements. Except as required by applicable law,
      including the securities laws of the United States, Registrant does not intend
      to update any of the forward-looking statements to conform these statements
      to
      actual results. The following discussion should be read in conjunction with
      Registrant's pro forma financial statements and the related notes that will be
      filed herein.
In
      this
      Form 8-K, references to "we," "our," "us," "our company," "Cyber" or the
"Registrant" refer to Cyber Merchants Exchange, Inc., a California corporation.
PREFACE
The
        Company is filing this Current Report on Form 8-K ("Form 8-K") concurrently with
        a second separate Form 8-K on this same date. However, both Form 8-K's are being
        filed in connection with the Closing of the Exchange and Financing transactions
        described in Items 1.01 and 2.01 below. These two Form 8-K's are filed
        separately because the number of "Items" the Company must file in connection
        with the Closing of the Exchange and Financing transactions exceeds the nine
        (9)
"Item" limitation on the number of Items that can be included in one Form 8-K.
Item 1.01
Entry
      Into A Material Definitive Agreement
As
      more
      fully described in Item 2.01 below, on July 7, 2006, Cyber Merchants
      Exchange, Inc., a California corporation (the "Registrant" or "Cyber") acquired
      a Hong-Kong based recordable digital versatile disk manufacturing company by
      executing an Exchange Agreement ("Exchange Agreement") with KI Equity Partners
      II, LLC, a Delaware limited liability company ("KI Equity"), Prime Fortune
      Enterprises Limited, an international business company incorporated in the
      British Virgin Islands ("Prime"), the equity owners of Prime, which consist
      of
      Prime Corporate Developments Limited ("Prime Corporate"), Kwok Chung and Lui Sau
      Wan (collectively, the "Prime Shareholders") and Hamptons Investment Group Ltd.
      ("HIG"). Under the terms of the Exchange Agreement, immediately prior to the
      Closing, HIG is to receive 58.82352 shares of Prime capital stock (the "HIG
      Shares") as payment for its services as a finder in connection with the exchange
      transaction. Pursuant to the Exchange Agreement, Cyber was to acquire all of
      the
      outstanding capital stock and ownership interests of Prime (the "Prime Shares")
      from the Prime Shareholders and HIG in exchange for Cyber issuing 1,000,000
      shares of Series A Convertible Preferred Stock, no par value per share, of
      Cyber
      ("Series A Preferred Shares") to the Prime Shareholders and HIG (the
"Exchange"). On the execution date of the Exchange Agreement, Prime owned all of
      the equity interest in Infosmart Group Limited, an international business
      company incorporated in the British Virgin Islands ("Infosmart"), which
      consisted of one (1) ordinary share of Infosmart stock. Infosmart beneficially
      owns 100% of the issued and outstanding capital stock of both: (i) Info Smart
      Technology Limited, a company incorporated under the laws of Hong Kong ("IS
      Technology"); and (ii) Info Smart International Enterprises Limited, a company
      incorporated under the laws of Hong Kong ("IS International"). IS Technology
      owns all of the issued and outstanding capital stock of Infoscience Media
      Limited, a company incorporated under the laws of Hong Kong ("IS Media"). IS
      Media owns 99.42% of the issued and outstanding capital stock of Discobras
      Industria E Comercio de Electro Eletronica Limiteda, a company incorporated
      under the laws of Brazil ("Discobras").
However,
      as more fully described in Item 2.01 below, in August 2006 and prior to the
      Closing of the Exchange, the board of directors of Prime and Infosmart and
      their
      respective shareholders decided to re-structure certain shareholdings in
      Infosmart, so that after the re-structuring, Prime would no longer own 100%
      of
      Infosmart's issued capital shares and so that the Prime Shareholders would
      replace Prime as the direct owners of 100% of the issued capital shares and
      equity ownership of Infosmart (the "Re-structuring"). As described more fully in
      Item 2.01, as a result of the Re-structuring, the Prime Shareholders became
      the
      direct equity owners of 100% of Infosmart's issued capital shares.
After
      the
      Re-structuring, on
August
      14, 2006,
Cyber
      entered into a First Amendment to the Exchange Agreement (the "Amendment") with
      KI Equity, Prime, the Prime Shareholders, HIG, Infosmart, and each of the equity
      owners of Infosmart. Under the terms of the Amendment, the Exchange Agreement
      was amended so that the term "Company", which is currently defined in the
      Exchange Agreement as "Prime Fortune Enterprises Limited, an international
      business company incorporated in the British Virgin Islands" shall instead be
      defined as "Infosmart Group Limited, an international business company
      incorporated in the British Virgin Islands" so that all of the obligations,
      representations, warranties, liabilities and responsibilities of Prime under
      the
      Exchange Agreement shall now be the obligations, representations, warranties,
      liabilities and responsibilities of Infosmart. The parties further agreed and
      acknowledged that the Infosmart Shareholders (defined below) shall replace
      the
      Prime Shareholders as the exchanging party to the Exchange Agreement that will
      transfer and contribute all of their Infosmart Shares to Cyber in exchange
      for
      Cyber's issuance to the Infosmart Shareholders of 1,000,000 shares of Cyber's
      Series A Preferred Stock, and that all of the obligations, representations,
      warranties, liabilities and responsibilities of the Prime Shareholders under
      the
      Exchange Agreement shall become the obligations, representations, warranties,
      liabilities and responsibilities of the Infosmart Shareholders.
2
As
      a
      result of the Amendment: (1) Prime's obligation under the Exchange Agreement to
      issue capital shares to HIG immediately prior to the Closing was transferred
      to
      Infosmart, and thus Infosmart will issue 58.82352 Infosmart shares to HIG as
      payment for HIG's services; (2) the shares of capital stock to be exchanged with
      Cyber's Series A Preferred Stock pursuant to the Exchange Agreement will consist
      of 100% of Infosmart issued capital shares (the "Infosmart Shares"), (2) the
      holders of 100% of Infosmart's issued capital shares, which immediately prior to
      the Closing shall be Prime Corporate, Kwok Chung, Lui Sau Wan and HIG
      (hereinafter, collectively the "Infosmart Shareholders") will be the
      transferring the Infosmart Shares to Cyber in exchange for Cyber's issuance of
      Cyber's Series A Preferred Stock to the Infosmart Shareholders, and (3) that
      Infosmart and the Infosmart Shareholders will be replacing Prime and the Prime
      Shareholders as a parties to the Exchange Agreement and will be assuming all
      of
      Prime's and the Prime Shareholders' obligations, representations, warranties,
      liabilities and responsibilities under the Exchange Agreement.
In
      connection with the execution of the First Amendment to the Exchange Agreement,
      Cyber, IS Technology, IS International and IS Media entered into an Amended
      and
      Restated Guarantee and Assumption Agreement ("Amended Guarantee Agreement") on
      August 14, 2006, under which IS Technology, IS International and IS Media have
      agreed to be jointly and severally liable with Infosmart and the Infosmart
      Shareholders for each and every obligation and liability of Infosmart and the
      Infosmart Shareholders under the Exchange Agreement as if it were a party to
      the
      Exchange Agreement. A copy of the Amended Guarantee Agreement is included as
      Exhibit 2.6 to this Current Report and is hereby incorporated by this
      reference.
Thus,
      at
      the Closing, Cyber will acquire all of the Infosmart Shares from the Infosmart
      Shareholders, and the Infosmart Shareholders will transfer and contribute all
      of
      their Infosmart Shares to Cyber. In exchange, Cyber will issue to the Infosmart
      Shareholders 1,000,000 shares of Series A Preferred Shares, which shall be
      convertible into 116,721,360 shares of Cyber's common stock ("Conversion
      Shares"). A copy of the Amendment is included as Exhibit 2.5 to this Current
      Report and is hereby incorporated by this reference. All references to the
      Exchange Agreement, the Amendment and other exhibits to this Current Report
      are
      qualified, in their entirety, by the text of such exhibits.
Reference
      is also made to the description of the financial advisory agreement under Item
      2.01 of this report, which description is incorporated by reference into this
      Item 1.01.
Item
      1.02
Termination
      Of A Material Definitive Agreement.
Reference
      is made to the description of the termination of the management services
      agreement with Vero Management, LLC under Item 2.01 of this report, which
      description is incorporated by reference into this Item 1.02.
Item 2.01
Completion
      of Acquisition or Disposition of Assets
CLOSING
      OF EXCHANGE AGREEMENT
As
      described in Item 1.01 above, on July 7, 2006, Cyber acquired a Hong-Kong
      based recordable digital versatile disk manufacturing company by executing
      an
      Exchange Agreement with KI Equity, Prime, the equity owners of Prime, the Prime
      Shareholders and HIG. Under the terms of the Exchange Agreement, immediately
      prior to the Closing, HIG was to receive 58.82352 Prime capital shares as
      payment for its services as a finder in connection with the exchange
      transaction. Pursuant to the Exchange Agreement, Cyber was to acquire all of
      the
      outstanding capital stock and ownership interests of Prime (the "Prime Shares")
      from the Prime Shareholders and HIG in exchange for Cyber issuing 1,000,000
      shares of Series A Convertible Preferred Stock, no par value per share, of
      Cyber
      ("Series A Preferred Shares") to the Prime Shareholders and HIG (the
"Exchange").
However,
      prior to the Closing, the board of directors of both Prime and Infosmart decided
      to re-structure certain shareholdings in Infosmart, so that after the
      re-structuring, Prime would no longer own 100% of Infosmart's issued capital
      shares and so that Prime Corporate, Kwok Chung and Lui Sau Wan would replace
      Prime as the direct owners of 100% of the issued capital shares and equity
      ownership of Infosmart (the "Re-structuring").
3
Prior
      to
      the Re-structuring, Prime owned 100% of the issued capital shares of Infosmart,
      which consisted on one (1) issued capital share, and Prime's issued capital
      shares were owned as follows: 713 shares held by Prime Corporate, 212 shares
      held by Kwok Chung, and 75 shares held by Lui Sau Wan. On August 11, 2006,
      and
      in connection with the Re-structuring, Prime's board of directors approved
      resolutions for Prime to transfer the one (1) issued capital share of Infosmart
      owned by Prime to Prime shareholder Kwok Chung in exchange for a cash payment
      of
      $1.00 (the "Prime Transfer"), and that pursuant to such resolutions, Prime
      transferred the one Infosmart share to Kwok Chung on August 11, 2006 in exchange
      for the $1.00 cash payment.
Further,
      on August 11, 2006 and concurrent with the Prime Transfer, the Company's Board
      approved resolutions for the issuance of 999 new shares in Infosmart to Prime
      Corporate, Kwok Chung and Lui Sau Wan, as follows: 713 shares to Prime
      Corporate, 211 shares to Kwok Chung, and 75 shares to Lui Sau Wan, in exchange
      for a cash payment by Prime Corporate, Kwok Chung and Lui Sau Wan of $1.00
      per
      Infosmart share that each receives (the "Infosmart Share Issuance") or an
      aggregate total payment of $999 for such shares, and that on August 11, 2006,
      the Company issued the 999 Infosmart shares, in amounts as described above,
      to
      Prime Corporate, Kwok Chung and Lui Sau Wan and, in exchange, received the
      $999
      cash payment, pursuant to such resolutions.
A
s
      a
      result of and immediately after the Prime Transfer and the Infosmart Share
      Issuance, Prime Corporate, Kwok Chung and Lui Sau Wan became the owners of
      100%
      of the issued capital shares of Infosmart, with each of them owning the same
      number of Infosmart shares as the number of Prime shares that each currently
      owns.
As
      discussed in Item 1.01 above, after the Re-structuring, on August 14, 2006,
      Cyber entered into a First Amendment to the Exchange Agreement (the "Amendment")
      with KI Equity, Prime, the Prime Shareholders, HIG, Infosmart, and each of
      the
      equity owners of Infosmart.
As
      a
      result of the Amendment: (1) Prime's obligation under the Exchange Agreement to
      issue capital shares to HIG immediately prior to the Closing was transferred
      to
      Infosmart, and thus Infosmart will issue 58.82352 Infosmart shares to HIG as
      payment for HIG's services; (2) the shares of capital stock to be exchanged with
      the Series A Preferred Shares pursuant to the Exchange Agreement will consist
      of
      100% of Infosmart issued capital shares (the "Infosmart Shares"), (3) the
      holders of 100% of Infosmart's issued capital shares, which immediately prior to
      the Closing shall be Prime Corporate, Kwok Chung, Lui Sau Wan and HIG
      (hereinafter, collectively the "Infosmart Shareholders") will be the
      transferring the Infosmart Shares to Cyber in exchange for Cyber's issuance of
      Cyber's Series A Preferred Shares to the Infosmart Shareholders, and (4) that
      Infosmart and the Infosmart Shareholders will be replacing Prime and the Prime
      Shareholders as a parties to the Exchange Agreement and will be assuming all
      of
      Prime's and the Prime Shareholders' obligations, representations, warranties,
      liabilities and responsibilities under the Exchange Agreement.
Thus,
      at
      the Closing, Cyber will acquire all of the Infosmart Shares from the Infosmart
      Shareholders, and the Infosmart Shareholders will transfer and contribute all
      of
      their Infosmart Shares to Cyber. In exchange, Cyber will issue to the Infosmart
      Shareholders 1,000,000 shares of Cyber's Series A Preferred Stock, which shall
      be convertible into 116,721,360 shares of Cyber's common stock. All references
      to the Exchange Agreement, the Amendment and other exhibits to this Current
      Report are qualified, in their entirety, by the text of such exhibits.
Infosmart
      beneficially owns 100% of the issued and outstanding capital stock of both:
      (i)
      Info Smart Technology Limited, a company incorporated under the laws of Hong
      Kong ("IS Technology"); and (ii) Info Smart International Enterprises Limited, a
      company incorporated under the laws of Hong Kong ("IS International"). IS
      Technology owns all of the issued and outstanding capital stock of Infoscience
      Media Limited, a company incorporated under the laws of Hong Kong ("IS Media").
      IS Media owns 99.42% of the issued and outstanding capital stock of Discobras
      Industria E Comercio de Electro Eletronica Limiteda, a company incorporated
      under the laws of Brazil ("Discobras"). Infosmart, IS International, IS
      Technology, IS Media and Discobras shall be referred to herein collectively
      as
      "Infosmart Group" or our "predecessor." Infosmart Group is engaged in the
      business of development, manufacturing, marketing and sales of recordable
      digital versatile disks ("DVDR") media.
The
      consummation of the Exchange was contingent on a minimum of $7,000,000 (or
      such
      lesser amount as mutually agreed to by Prime and the placement agent) being
      subscribed for, and funded into escrow, by certain accredited and institutional
      investors ("Investors") for the purchase of shares of Series B Convertible
      Preferred Stock ("Series B Preferred Shares") of Cyber promptly after the
      closing of the Exchange under terms and conditions approved by Cyber's board of
      directors immediately following the Exchange (the "Financing"). The closing of
      the Financing was contingent on the closing of the Exchange, and the Exchange
      was contingent on the closing of the Financing.
4
The
      closing of the transactions contemplated by the Exchange Agreement and the
      First
      Amendment to the Exchange Agreement and in the Financing occurred on August
      16,
      2006 (the "Closing Date"). Following the Closing Date, Infosmart became a wholly
      owned subsidiary of Cyber.
FINANCING
Immediately
      following the Closing, we received gross proceeds of approximately $7.65 million
      in connection with the Financing from the Investors. Pursuant to Subscription
      Agreements entered into with these Investors, we sold 1,092,857.143 shares
      of
      our Series B Preferred Stock at a price per share of $7.00. Each share of Series
      B Preferred Stock will be convertible into shares of our common stock. The
      Company is required to register the common stock underlying the Series B
      Preferred Stock issued in the Financing with the Securities and Exchange
      Commission for resale by the Investors. After commissions and expenses, we
      received net proceeds of approximately $6.89
million
      in the Financing.
In
      connection with the issuance of the Series B Preferred Stock to the Investors,
      the Company issued warrants to the Investors to purchase an aggregate of
      29,310,345 shares of common stock, on as-converted basis, of the Company. The
      warrants have an exercise price of $0.326 per share, subject to
      adjustments.
Keating
      Securities, LLC and Axiom Capital Management, Inc. ("Placement Agents") acted as
      placement agent in connection with the Financing. For their services, the
      Placement Agents received a commission equal to 8% of the gross proceeds or
      approximately $587,000
from the
      offering and a non-accountable expense allowance equal to 2% of the gross
      proceeds or approximately $153,000
.
      In
      addition, the Placement Agents received, for nominal consideration, five-year
      warrants to purchase 10% of the number of shares of common stock into which
      the
      Series B Preferred Stock issued in the Financing may be converted number of
      shares of common stock into which the Series B Preferred Stock in the offering
      ("Placement Agent Warrants").  The Placement Agent Warrants will be
      exercisable at any time at a price equal 125% of the conversion price, on a
      net-issuance or cashless basis. The Placement Agent Warrants will have
      registration rights similar to the registration rights afforded to the holders
      of Series B Preferred Stock and Warrants. Cyber also paid for the out-of-pocket
      expenses incurred by the Placement Agent and all purchasers in the amount of
      $25,000. In addition, Cyber issued to the Placement Agent, warrants to purchase
      an aggregate of 2,931,035 shares of our common stock on an as-converted basis
      at
      an exercise price of $0.326 per share. The warrants are fully vested and have
      a
      term of five years.
Copies
      of
      the form of Placement Agent Agreement, Subscription Agreement, Registration
      Rights Agreement, and Form of Common Stock Purchase Warrant are attached to
      this
      report as Exhibits 10.14, 10.15, 10.16, and 10.17 respectively, and are
      incorporated herein by reference.
Upon
      completion of the Exchange, and after giving effect to the Financing, the
      Infosmart Shareholders owned 1,000,000 shares of Cyber's Series A Preferred
      Stock and the Investors in the aggregate received 1,092,857.143 shares of our
      Series B Preferred Stock. The Infosmart Shareholders and the Investors will
      own,
      in the aggregate, 91.84% of our issued and outstanding shares of common stock
      after giving effect to the conversion of the Series A and Series B Preferred
      Stock into common stock. Cyber's stockholders immediately prior to the Exchange
      will own 8.16% of the outstanding common stock (or, 12,969,040 shares of our
      common stock) immediately after completion of these transactions after giving
      effect to the conversion of the Series A and Series B Preferred Stock into
      common stock.
The
      issuance of the Series A Preferred Shares to the Infosmart Shareholders and,
      upon conversion, the shares of Cyber's common stock underlying the Series A
      Preferred Shares, is intended to be exempt from registration under the
      Securities Act of 1933, as amended (the "Securities Act"), pursuant to
      Regulation S promulgated thereunder. The issuance of the Series B Preferred
      Shares to Investors is intended to be exempt from registration under the
      Securities Act pursuant to Section 4(2) thereof and such other available
      exemptions. As such, the Series A Preferred Shares and the Series B Preferred
      Shares, and upon conversion thereof, Cyber's common stock, may not be offered or
      sold in the United States unless they are registered under the Securities Act,
      or an exemption from the registration requirements of the Securities Act is
      available. No registration statement covering these securities has been filed
      with the SEC or with any state securities commission in respect of the Exchange
      or the Financing.
However,
      pursuant to the Exchange Agreement and in connection with Financing, Cyber
      entered into a registration rights agreement (the "Registration Rights
      Agreement") with the Investors and the Placement Agents. Pursuant to the
      agreements, Cyber has agreed to register for public re-sale the shares of
      Cyber's common stock underlying the Series B Preferred Shares issued to the
      Investors in the Financing and the common stock issuable to each Investor and
      the Placement Agents pursuant to the warrants. In addition, Cyber has
      agreed to register for public re-sale after the Exchange: (i) 2,000,000 shares
      of Cyber's common stock which are currently outstanding and have been granted
      piggyback registration rights, (ii) 7,104,160 shares of Cyber's common stock
      currently held by KI Equity which do not have piggyback registration rights,
      (iii) the Gateway Shares (as defined below), (iv) approximately 6,484,519 shares
      of Cyber's common stock underlying Series A Preferred Stock to be issued to
      Hamptons Investment Group Limited ("HIG") immediately prior to the closing of
      the Exchange, and (v) 134,100 shares of Cyber's common stock issued to
      Richardson & Patel LLP after Closing for legal services rendered to Prime in
      connection with the Exchange and Financing. (The shares Cyber is required to
      register, as described above, are collectively referred to hereinafter as the
      "Registrable Securities".) The Registration Rights Agreement provides that Cyber
      must file a Registration Statement on Form SB-2 (the "Registration Statement")
      relating to the resale of the Registrable Securities within 30 days following
      the Closing (the "Filing Deadline Date") and shall use its commercially
      reasonable efforts to cause such Registration Statement to become effective
      within 150 days following the Closing. In the event that it does not meet its
      registration obligations,
then
      Cyber has agreed to pay
holders
      of Series B Preferred Stock and Warrants
,
      as
      partial liquidated damages for the damages to them by reason thereof, and not
      as
      a penalty, at a rate equal to two percent (2%) of the purchase price of the
      shares held by each
holder
      of
      Series B Preferred Stock and Warrants
per
      month, for each calendar month of the Registration Default Period (pro rated
      for
      any period less than 30 days), subject to a cumulative maximum value of 14%;
      provided, however, if a breach of the Registration Rights Agreement obligation
      occurs (or is continuing) on a date more than one year after the purchaser
      acquired the Registrable Securities (and thus the one year holding period under
      Rule 144(d) has elapsed), liquidated damages shall be paid only with respect
      to
      that portion of a purchaser's registrable securities that cannot then be
      immediately resold in reliance on Rule 144;
provided
      a legal opinion with respect to the availability of Rule 144 for the resale
      of
      Registrable Securities received upon conversion of the Series B Preferred Shares
      has been rendered by a law firm acceptable to both the Company and the Holder
      as
      evidence that Rule 144 is available for such Registrable Securities
.
5
In
      connection with the Closing, Cyber filed a press release announcing the Closing
      and the completion of the Financing, a copy of which is attached to this Current
      Report on Form 8-K as Exhibit 99.1.
Except
      for the Exchange Agreement and the transactions contemplated by that agreement,
      neither Cyber, nor the directors and officers of Cyber serving prior to the
      consummation of the Exchange, had any material relationship with Infosmart,
      or
      any of the Infosmart Shareholders.
Cyber
      is
      presently authorized under its Articles of Incorporation to issue 40,000,000
      shares of common stock, no par value per share, and 10,000,000 shares of
      preferred stock, no par value per share. Of the 10,000,000 shares of preferred
      stock authorized, 1,200,000 shares were designated as Series A Convertible
      Preferred Stock and 1,800,000 shares were designated as Series B Convertible
      Preferred Stock pursuant to Certificates of Determination ("Certificates of
      Determination") that were approved by Cyber's board of directors, and filed
      with
      and accepted by, the Secretary of State of the State of California prior to
      the
      Closing of the exchange transaction. Further, pursuant to the Exchange
      Agreement, Cyber issued 2,850,000 shares of Cyber's common stock to Worldwide
      Gateway Co., Ltd. ("Gateway") immediately prior to the Closing for Gateway's
      services as a consultant to Cyber connection with the Exchange ("Gateway
      Shares"). Thus, as of the Closing, and immediately after the completion of the
      Financing, Cyber had 12,969,040 shares of common stock issued and outstanding,
      1,000,000 shares of Series A Preferred Stock issued and outstanding, and
      1,092,857.143 shares of Series B Preferred Stock issued and
      outstanding.
MANDATORY
      CONVERSION OF PREFERRED STOCK INTO COMMON STOCK
Under
      the
      terms of the Exchange Agreement, the Infosmart Shares held by the Infosmart
      Shareholders were exchanged for 1,000,000 shares of our Series A Preferred
      Stock. Each Series A Preferred share will be convertible into 116.721360 shares
      of Cyber's common stock (the "Conversion Rate"). The Series A Preferred Shares
      will immediately and automatically be converted into shares of Cyber's common
      stock (the "Mandatory Conversion") upon the approval by a majority of Cyber's
      stockholders (voting together on an as-converted-to-common-stock basis),
      following the Exchange transaction, of an increase in the number of authorized
      shares of Cyber's common stock from 40,000,000 shares to 300,000,000 shares and
      a change of Cyber's corporate name (collectively, the "Corporate Actions"). In
      connection with the Closing, KI Equity and the Infosmart Shareholders entered
      into a voting agreement ("Voting Agreement") to vote their Cyber shares in favor
      of the Corporate Actions.
The
      holders of Preferred Stock (including the Investors acquiring such shares as
      part of the Financing after the Closing of the Exchange) are entitled to vote
      together with the holders of the common stock, as a single class, upon all
      matters submitted to holders of common stock for a vote. Each share of Preferred
      Stock will carry a number of votes equal to the number of shares of common
      stock
      issuable as if converted at the record date. As such, after the Closing and
      the
      Financing, the Infosmart Stockholders, and Investors have 91.84% of the total
      combined voting power of all classes of Cyber stock entitled to
      vote.
6
Upon
      Mandatory Conversion of the shares of Series A and Series B Preferred Stock,
      the
      Infosmart Stockholders and Investors will, in the aggregate, receive
      approximately 146,031,705 shares of Cyber's common stock, representing 91.84%
      of
      the outstanding shares of Cyber's common stock immediately following the
      Mandatory Conversion. The stockholders of Cyber immediately prior to the
      Exchange will, following the Mandatory Conversion, own approximately 12,969,040
      shares of Cyber's common stock, representing 8.16% of the outstanding shares
      of
      common stock.
Effective
      as of the Closing, Kevin R. Keating, Margie L. Blackwell, Luca Toscani and
      Jeff
      L. Andrews resigned as a directors of Cyber and following persons were appointed
      to Cyber's board of directors:
·
Kwok
      Chung ("Andy Kwok"), InfoSmart's current Chief Executive Officer
·
Sze
      Po
      Nei ("Pauline Sze"), InfoSmart's current Chief Financial Officer
·
Andrew
      Chung Yuen Chang ("Andrew Chang"), a director of InfoSmart
·
Godwin
      Wong, an independent director designated by KI Equity.
Additional
      information concerning Andy Kwok, Pauline Sze, Andrew Chang and Godwin Wong
      is
      set forth below.
BUSINESS
BUSINESS
      OF CYBER
Prior
      to
      the Closing, Cyber was a public "shell" company with nominal assets whose sole
      business has been to identify, evaluate and investigate various companies with
      the intent that, if such investigation warrants, a reverse merger transaction
      be
      negotiated and completed pursuant to which Cyber would acquire a target company
      with an operating business with the intent of continuing the acquired company's
      business as a publicly held entity.
BUSINESS
      OF INFOSMART
Overview
Infosmart
      manufactures 8x and 16x recordable digital versatile discs ("DVDRs"),
      and is preparing to launch production of new optical storage media, namely,
      high
      density DVDR ("HD DVD")/Blu-Ray discs. Infosmart operates a state of the art
      recordable DVDR factory in Hong Kong, which is presently operating at maximum
      capacity. In order to act as a one-stop-shop for the optical storage media
      needs
      of its customers, Infosmart outsources orders for products it does not produce
      itself, such as DVD±RW and DVD-RAM and other low margin DVDR items. However,
      there has been a permanent shift in Infosmart's operations in favor of sales of
      own-manufactured discs: 89% of Infosmart's revenues in 2005 were from sales of
      manufactured discs, up from 66% in 2004. In the future, Infosmart expects sales
      of purchased discs to be insignificant.
Infosmart
      is establishing a production facility and a sales base in Brazil in 2006. 
Infosmart intends to boost its productivity and return on investment from its
      existing DVDR equipment by relocating some production to Brazil, one of the
      world's largest developing economies.
7
In
      March
      2006, Infosmart formed Discobras, a Brazilian company, with a local partner,
      with registered capital of US$8 million. Infosmart's subsidiary, IS Media, holds
      a 99.42% ownership interest in Discobras and the local partner holds the
      remaining 0.58% ownership interest in Discobras. Infosmart has already received
      licenses and all necessary documents and approvals for operating a DVDR
      production facility in Brazil. The facility has been leased since April 2006
      and
      is already prepared for machines to be installed in October 2006.
      Production in Brazil is expected to start in the fourth quarter
      of 2006. Infosmart's Regional Director for South America, Sebastian Tseng, has
      lived in Argentina for many years, speaks fluent Spanish and is conversational
      in Portuguese.
Infosmart's
      strategy is to continue to produce 8x and 16x discs for developed and,
      increasingly, developing economies, while preparing some of its production
      lines
      for next generation media - HD DVD output. By the end of 2007, management plans
      to have at least two production lines converted to HD DVD output and another
      44
      lines ready for conversion. The timing of product and territory market entry
      and
      exit is a critical determinant of success in the optical media market.
      Flexibility in Infosmart's technology base and manufacturing locations will
      enable the company to time the switch of emphasis to HD DVD production and
      regional markets according to local information and actual, rather than
      projected, market developments.
Infosmart
        was incorporated in the British Virgin Islands on August 23, 2005 under the
        International Business Companies Act, British Virgin Islands. Pursuant to
        a
        group reorganization ("Infosmart Reorganization") completed in October 2005,
        Infosmart became the holding company of IS Technology, IS International and
        IS
        Media by the acquisition of 100% (directly and indirectly) of the issued
        and
        outstanding common stock of each such entity.
Founded
        in Hong Kong in August of 2002, IS Technology was the first company in Hong
        Kong
        to manufacture recordable digital versatile disks. With the continual growth
        in
        DVDR demand, the initial shareholders of IS Technology took in other
        shareholders to form the other two companies, IS International and IS Media,
        to
        produce DVDRs. These three companies form Infosmart's main operational business.
        In fiscal 2004, Infosmart's revenues were $22,421,765 and its net income was
        $3,024,300. In fiscal 2005, Infosmart's revenues were $24,577,206 and its net
        income was $4,214,761. Infosmart currently has customers in Western Europe
        and
        Australia and plans further expansion into North and South America, the Middle
        East, Africa, Eastern Europe and Russia.
Industry
        Overview and Market Opportunity
In
      general, demand for DVDR discs has been growing rapidly. Such increased demand
      has been driven by the higher market penetration of DVD drives, players and
      recorders, which was boosted by the rapid rise in the number of movies marketed
      in the DVD format. The installed base of DVD drives, players and recorders
      doubled from approximately 200 million units in 2004 to approximately 390
      million units in 2005. These estimates are inclusive of the installed base
      of
      DVD drives in personal computers (PCs) which was estimated to rise from 81
      million in 2004 to 158 million in 2005. In addition, worldwide demand for DVDR
      discs grew 12% in 2004 to approximately 2.1 billion units in 2005. Management
      believes the writable DVDR market saw a 93% sales volume growth in 2005. Due
      to
      strong growth of worldwide DVD recorder shipment and PC installation and prices
      of DVD drives falling 2%-3% per year, annual DVDR disc demand is projected
      to
      rise to around 4 billion units by 2005 and peak at almost 9 billion discs per
      year by 2008.
Currently,
      the largest markets for DVDR discs are Europe, USA and Japan. We believe
      that demand for DVDR discs from South America, the Middle East and Eastern
      Europe will grow quickly. Taiwanese companies account for approximately 60%
      of
      the world's installed DVDR disc production capacity and output.
Computer
      storage media products that have historically competed with DVDR discs include
      hard discs, USB drives and flash memory, and floppy discs. Hard discs have
      up to
      500GB of capacity, cost around $0.75/GB and are the most economical choice
      for
      large storage needs. However, the hard disc is less versatile, more fragile
      and
      harder to install than optical storage media; it is also bulky and has poor
      portability. Both USB drives and flash memory are compact in size and provide
      great portability and reusability, but are relatively expensive ($70-$100/GB)
      and have limited storage capacity (maximum only 1-2 GB). These devices are
      mainly used to store computer and music/home video files where portability
      is
      required. Floppy disc capacity is too small for multimedia or today's software
      files.
For
      full
      movies or computer file backups, CD-R and DVDR offer large (from 750MB to 9.4GB)
      and economical (from $0.18 to $0.80 per disc) storage solutions. Rewritable
      DVD±RW discs are reusable but more expensive, and therefore less popular, than
      write-once DVD±R discs.
In
      addition to its historical competitors, DVDR now faces competition from newer
      forms of optical storage mediums, such as HD DVD and Blu-Ray.
Older
      technology such as SL DVD already has an established large hardware base and
      thus there is constant demand for SL DVD media around the globe. These large
      volume production items like 8x and 16x SL DVDR discs can be rapidly produced
      and sold with little incremental effort. The high-tech consumers in developed
      countries, however, are demanding higher reading and writing speed and larger
      capacity for their growing needs on sizeable applications, files and
      high-definition media contents. Sales of 8x SL DVDR is on the downward trend
      as
      consumers can get 16x SL DVDR with negligible price difference.
8
Over
      time, the demand for DVDR discs may shift away from SL DVD and towards other
      forms of optical storage media with larger capacity and higher data transfer
      rates. For technical reasons, 16x represents the speed limit for DVDR discs,
      and
      thus faster data transfer can only be achieved by increasing the quantity of
      information transferred per second. This has spurred the development of a range
      of technologies designed to increase the density of information storage on
      DVD
      discs, such as using lasers of different wavelengths (HD DVD or Blu-Ray) or
      a
      second layer information storage on the disc (DL DVD). How effectively such
      newer technologies compete in the optical storage media depends on a number
      of
      factors, as discussed below.
Global
      DVDR disc production is highly competitive and manufacturers must continuously
      cut costs and keep up with product life cycles to survive. Market timing is
      critical in the optical storage media market. Management expertise is necessary
      in order to judge market entry at the early growth phase of a product cycle.
      Manufacturers that enter a product market too early in the introduction stage
      of
      the life cycle face insufficient demand, high production costs and the risk
      that
      their production technology will be overtaken by subsequent innovations. Those
      who enter too late, as many did with respect to the 4x DVD disc market in
      2003/2004, may face falling margins in a maturing or declining market as the
      relevant product nears the end of its life cycle.
The
      product cycle for SL DVD in developed countries, like Europe and the U.S.,
      is in
      the maturity stage, as reflected by a high quantity of demand and falling
      prices. With the introduction of HD DVD and Blu-Ray, SL DVDR demand might
      further decrease as consumers turn to HD DVD or Blu-Ray for their high capacity
      storage needs for high definition media. In Infosmart's analysis, HD DVD and
      Blu-Ray discs are still in the introduction stage. These items currently have
      a
      low share of the DVD market but their share could grow very rapidly if the
      products are successfully commercialized. The development of high density
      optical media awaits resolution of the format war between HD-DVD and Blu-Ray
      and
      technical maturity of the production process before the full market potential
      of
      these products can be realized.
Due
      to a
      sooner than expected release of HD DVD and Blu-Ray hardware and media into
      the
      market, the DL DVDR had quickly gone past the growth phase of its product life
      cycle since late 2005. The price and market demand for DL DVDR has dropped
      substantially with consumers waiting for the launch of the next generation
      high-density media. DL DVDR has quickly become one of those products that is
      expected to be displaced by more advanced technologies.
In
      contrast to developed countries, demand for DVDR discs continues to grow in
      developing countries. With the disparity between developed and developing
      countries, the demand for all high-tech products, including DVDs, in developing
      countries lagged behind the demand for same products in developed countries.
      The
      time gap between technology adoption in developed and developing countries
      has
      prolonged the original product life cycle for optical storage media. Currently,
      8x DVDR has already reached the maturity stage (or even the decline stage)
      of
      the product life cycle in developed countries such as U.S., Europe and
      Australia. However, the same 8x products are in the growth stage in developing
      countries such as those in South America and Africa. Therefore, by capturing
      the
      market in these developing markets, Infosmart can maximize the productivity
      and
      the values of its existing DVDR machines. The prices for DVDR products are
      also
      better in developing countries than in developed countries where the prices
      are
      driven down by intense competition.
Infosmart
      currently manufactures 8x and 16x write-once DVDR discs which are sold in
      several countries worldwide and believes that demand for recordable DVDR
      products will continue to grow in the foreseeable future, especially in
      developing countries. To increase sales in developed countries, Infosmart plans
      to focus some of its production on the HD DVD. Infosmart is preparing for
      HD DVD production. Thirty two (32) of Infosmart's forty four (44) production
      lines can be upgraded to HD DVD production at a time of management's choosing.
Infosmart
      is positioned as a strong competitor in meeting the growing demand for
      recordable DVD products. Infosmart is a DVDR manufacturer with no obsolete
      legacy CD plants and it offers a combination of the following key factors needed
      for success in this innovative sector: ability to time market entry to match
      the
      growth phase in a product's life cycle; ability to time exit from mature markets
      when unprofitable; adaptability achieved by using upgradeable manufacturing
      technology; flexibility gained by using outsourced capacity where necessary
      as
      products mature; cost competitiveness; and entrepreneurial drive. Infosmart
      already has a large base of customers and is striving to find new customers
      for
      its products.
As
      explained above, the timing of market entry and exit is a critical determinant
      of success in the optical media market. By entering the lucrative storage media
      market in Brazil in the early growth stage, Infosmart can maximize the revenue
      potentials of its existing production lines. Infosmart is also preparing to
      launch production of HD-DVD/Blu-Ray discs at the optimal time.
9
Employees
As
      of
      June 30, 2006, we had 148 full-time employees, including management. None
      of these employees are represented by any collective bargaining agreements.
      Neither we nor any of the subsidiaries have experienced a work stoppage.
      Management believes that our relations with our employees are good.
Current
      Products
Currently,
      sales of our 8x DVDR disc account for approximately between 70% to 80% of
      Infosmart's output; 16x DVDR discs make up the remainder. Management expects 8x
      sales to remain the bulk of Infosmart's sales partly because the Brazilian
      market is overwhelmingly an 8x market. Management expects the contribution
      to
      sales by product in 2006 and 2007 to follow the pattern set out in the table
      below:
Disc
                Type
2006E
2007E
16x
28
%
14
%
8x
72
%
74
%
HD
                DVD
0
%
12
%
Research
      and Development
Infosmart
      plans to invest $1,250,000 over the next 18 months on pre-production activities
      for HD DVD production, including dye and stamper testing, mould modification
      and
      process fine-tuning. In order to be one of the first manufacturers to
      mass-produce HD DVDs to coincide with the early growth phase of the product
      life
      cycle, Infosmart has been working closely with dye and stamper developers in
      Taiwan and will be conducting pre-production testing to prepare for HD DVD
      production. However, if the market turns in favor of Blu-Ray, the Company will
      have to purchase new equipment to produce Blu-Ray discs.
Manufacturing
Infosmart
      currently operates three factories, whose combined production capacity is 12
      million 8x and 16x SL DVDR discs per month. Currently, the product mix is about
      70-80% of 8x discs and 20-30% of 16x discs. Infosmart has the flexibility to
      switch production easily between the two product types. After manufacturing
      the
      discs, Infosmart puts its products through a rigid quality assurance
      process. Infosmart's Quality Management System complies with ISO9001:2000
      requirements and Infosmart is ISO 9000 certified. Our production equipment
      is
      easily upgradeable to HD DVD production, and the company will derive competitive
      advantage from this flexibility if HD DVD wins the standard war against Blu-Ray.
      Whichever format wins, however, the Company expects to make needed production
      purchases in 2007 in order to catch the expected first waves of demand in the
      high definition media storage market.
Intellectual
      Properties and Licenses
Infosmart
      does not own any patents or any other intellectual properties.
The
      intellectual properties used in manufacturing our products are provided to
      us
      pursuant to two separate cooperation agreements described below.
10
Agreement
      1
The
      first
      cooperation agreement ("Agreement 1") was entered into between our subsidiary
      Infosmart Technology Limited ("IS Technology") and Mega Century Limited ("Mega
      Century"), a Hong Kong company formerly controlled by Chief Financial Officer
      Pauline Sze) on January 1, 2006. Under Agreement 1, the parties agreed to
      combine operationally their production facilities so that Mega Century and
      IS
      Technology can both produce DVDRs using certain intellectual properties for
      the
      production of DVDRs for which Mega Century was granted a patent licenses (the
      "Patent License") for use by the DVD developer, and also the right to
      manufacture DVDRs under a government manufacturing license (the "Manufacturing
      License") held by the Mega Century. In addition, Mega Century agreed that (1) IS
      Technology has full legal and beneficial ownership of the first 6,500,000 DVD
      discs (the "First Minimum Quantity") produced in IS Technology's production
      facilities each whole month during the one year term of Agreement 1, which
      IS
      Technology can sell to third parties or to Mega Century; and (2) for any amount
      of DVDs produced in excess of the First Minimum Quantity (excluding quantities
      sold by IS Technology directly to Mega Century), IS Technology will receive
      70%
      of the gross profits from the sale of such DVDs.
In
      exchange, IS Technology agreed that for any amount of discs produced in excess
      of the First Minimum Quantity (excluding quantities sold by IS Technology
      directly to Mega Century), Mega Century receives 30% of the gross profits from
      the sale of such DVDs. Under Agreement 1, Mega Century is responsible for paying
      all the relevant licensee fees and IS Technology is responsible for all the
      recurrent costs and expenses incurred for the production of all DVD products
      manufactured at IS Technology's production facility during the one
      year term of Agreement 1. On January 1, 2006, Mega Century, IS Technology
      and Infosmart International Enterprises Limited ("IS International") entered
      into an Amendment Agreement amending Agreement 1 whereby IS International agreed
      to be an additional party to Agreement 1 and to undertake IS Technology's rights
      and obligations with IS Technology, jointly and severally.
Agreement
      2
The
      second cooperation agreement ("Agreement 2") was entered into between our
      subsidiary Infoscience Media Limited ("IS Media") and Infoscience Holdings
      Limited, an independent third party, (the "Third Party") on December 1, 2005.
      Under Agreement 2, the parties agreed to combine operationally their production
      facilities so that both IS Media and the Third Party can both produce DVDRs
      at
      their combined facilities using certain intellectual properties for the
      production of DVDs for which the Third Party holds patent licenses (the "Patent
      License") for use from the DVD developer (the "License Agreement") and also a
      right to manufacture DVDs under a government manufacturing license (the
"Manufacturing License") held by the Third Party. The Third Party also agreed
      that IS Media shall have full legal and beneficial ownership of the first
      5,000,000 DVD discs (the "Second Minimum Quantity") produced in both IS Media's
      and the Third Party's production facilities (the "Combined Facilities") for each
      whole month during the one year term of Agreement 2.
In
      exchange, IS Media agreed: (1) the Third Party shall receive full legal and
      beneficial ownership of all DVDs produced in the Combined Facilities that are
      in
      excess of the Second Minimum Quantity; and (2) to provide the Third Party with
      stand-by credit facility of not more than HK$30,000,000 from IS Media's own
      sources or indirectly from any third party including any licensed Hong Kong
      bank. Under Agreement 2, the Third Party is responsible for paying all the
      relevant licensee fees and IS Media is responsible for all the recurrent costs
      and expenses (except for rent and public utilities, for which each party is
      responsible for the costs they incur in their own production facility) incurred
      for the production of all DVD products manufactured in the Combined Facilities
      during the one year term of Agreement 2.
Patent
      Licenses
We
plan
      to
      directly apply for both a Patent License from the DVD developer to produce
      the Products and also the Manufacturing License in 2006 before the expiration
      of
      Agreement 1 and Agreement 2. In addition, upon completion of the Discobras
      DVDR
      production facility Brazil, Infosmart will also apply for the required Patent
      License for use of intellectual property required to manufacture its DVDR
      products in Brazil.
The
      Patent Licenses discussed above were both granted under
the
      Patent Licenses discussed above that that are held by Mega Century and the
      Third
      Party were obtained through a joint patent licensing program (the "DVDR Patent
      License Program") that is administered by Koninklijke Philips Electronics, N.V.
      ("Philips"). Parties acquiring the patent licenses through this DVDR Patent
      License Program are allowed to use patents owned (or for which these companies
      have patent applications pending) by participating companies including Philips,
      Sony, Hewlett Packard and/or Pioneer that are essential in the DVDR
      manufacturing process. The patent license offered through Philips' DVDR Patent
      Licensing Program is offered under non-discriminatory terms and conditions
      and
      in principle is available to all manufacturers. Thus, Infosmart should be able
      to gain approval upon application for use of the Patent Licenses. However,
      in
      the event that such approval is delayed for a long period or denied, then
      Infosmart plans to renew the Cooperation Agreements so that Infosmart can
      continue to produce its DVDR products.
11
Production
      Costs
Raw
      material costs constitute approximately 50% of the production costs for DVDR
      discs. Key materials used in DVDR production are polycarbonate, silver target,
      organic dye, printing oil and bonding glue. The most important cost item is
      polycarbonate, which accounts for about half of cost of goods sold.
The
      supply market for polycarbonate is competitive. Major polycarbonate suppliers
      include Teijin Chemicals, Dow Chemical, General Electric, Bayer, and Mitsubishi.
      Infosmart orders polycarbonate from a variety of sources depending on price
      and
      availability. Since polycarbonate is a petroleum byproduct its price is affected
      by crude oil prices and can be volatile. Infosmart places three (3) month supply
      contracts with polycarbonate vendors. These supply contracts guarantee quantity
      but leave pricing to be market determined.
Polycarbonate
      prices (PCB) increased from $1.90 - 2.50/kg in 2004 to around $2.80/kg -
      $3.50/kg in 2005 because of surging oil prices and supply constraints, thereby
      seriously cutting the profit margins of disc manufacturers worldwide. Capacity
      was hit in 2004 by the explosion of GE's PCB factory in Spain. At the end of
      2005, worldwide PCB capacity expanded as a major new factory came online in
      Shanghai, and two other large factories in Japan and the U.S. expanded output
      in
      response higher market prices. PCB prices were approximately $3.00/kg - $3.10/kg
      at the beginning of 2006, and have since dropped into the $2.80-$3.10 range.
      It
      is anticipated that expanded industry capacity for PCB will offset upward price
      pressures resulting from rising oil prices, leading to price stability or even
      a
      modest price decline in PCB prices in the near term.
Marketing
      And Distribution
We
      mainly
      sell to distributors, who resell to retailers. Infosmart has acquired about
      80%
      of its customers, and increased its exposure in Europe, USA, South America,
      the
      Middle East, Asia and China, through attendance at trade shows such
      as:
·
CeBIT
      (Hannover, Germany) 2003, 2004, 2005
·
Comdex
      (Las Vegas, USA) 2003
·
Computex
      (Taipei, Taiwan) 2004
·
Gitex
      (Dubai, UAE) 2004 and 2005
·
China
      Sourcing Fairs 2004
·
IT
      Brazil
      2005, 2006
·
Hong
      Kong
      Electronics Show 2004, 2005, 2006
Infosmart
      has gained the rest of its customers mainly through print advertising and
      referrals.
Infosmart
      is also planning a marketing campaign in Brazil including advertisements in
      Brazilian newspapers and magazines, and it also plans to attend the following
      local Brazilian trade exhibitions in 2006:
·
Abras
      (exhibition for buyers and purchasers for supermarkets and retail
      shops)
·
HI-FI
      (exhibition of audio and video products)
·
ESCORALERES
      (exhibition for schools and student usage products)
·
GAME
      (video game trade show)
Targeted
      New Overseas Markets
:
South
      America and Brazil
Infosmart
      received several large orders after attending the IT Brazil 2005 exhibition.
      We
      expect sales in South America will grow dramatically in the near future and
      Infosmart plans to deepen penetration of key South American markets in 2006
      by
      establishing a production facility and sales office in Brazil. We plan to
      achieve these objectives through Discobras, a Brazilian joint venture in which
      we have a 99.42% stake. For other South American countries, Infosmart will
      select strong distribution partners, conduct more marketing activities and
      exhibitions, and pre-positioning inventory in bonded warehouses in the region
      to
      ensure prompt delivery.
12
Brazil
      will be Infosmart's main focus in 2006. In addition to attending IT Brazil 2006,
      Infosmart will attend local computer games exhibitions and the main tradeshow
      for supermarket and chain store buyers in 2007. Infosmart's sales team will
      continue to secure distributors and strategic channel partners for specific
      territorial submarkets in Brazil.
Infosmart
      plans to launch its own brand "Discobras" in the Brazilian retail market from
      2007, with sales to supermarkets and chain stores such as Bompreco (a Wal-Mart
      subsidiary). Management expects that sales directly to retailers will generate
      higher profit margins sales to local wholesalers, and has earmarked a $650,000
      budget for this marketing effort over the next 18 months.
Management
      believes that Infosmart's Brazilian plant will support the company's push to
      become known as a top quality local DVDR manufacturer that offers stable supply
      and competitively priced products. Infosmart offers a 100% guarantee against
      defects in materials and workmanship for all its products. The company's quality
      control system in Hong Kong for the DVDR manufacturing process complies with
      ISO
      9001:2000 standards, and the entire manufacturing process and system from Hong
      Kong will also be applied to the Brazilian production facility.
Other
      Developing Markets - The Middle East, Africa, Eastern European
      Region/Russia.
Some
      of
      Infosmart's Western Europe distributors sell the company's products to retailers
      in the Middle East and Eastern Europe. We plan to exploit opportunities in
      major
      developing markets in the Middle East, Africa, Russia and Eastern Europe
      countries directly by attending tradeshows and advertising in trade
      websites.
Online
      Marketing Exposure
The
      Internet is increasingly being used for product sourcing. Infosmart currently
      invests $20,000 per year on online exposure in industry portals such as
      globalsources.com, alibaba.com and the Hong Kong Trade Development Council
      website. Infosmart plans to increase its online promotional activities.
Current
      Customers
We
      have
      established a wide client base and distribution network covering Europe/UK,
      the
      Middle East, Australia/New Zealand, and Asia.
Infosmart's
      top 3 customers by value, who accounted for 84% of our revenue in 2005, are
      as
      follows:
·
E-Net
                Distribution is the largest optical media distribution company in
                Europe;
                business from E-Net contributes 69% of Infosmart's revenue. E-Net sells to
                European as well as Middle Eastern retailers and sources from Infosmart
                about 15% of the blank DVDR discs that it sells.
·
NaSa
                Multimedia Technology (NaSa) markets Infosmart's DVDR blank media in
                Australia and New Zealand under its "Laser" brand. NaSa obtains 80-100% of
                its DVDR blank media supplies from Infosmart. Sales to NaSA account
                for
                8.7% of Infosmart's revenue.
·
DVD
                Technology, a leading distributor of optical storage products in
                the UK,
                also sells to continental Western and Eastern European retailers.
                DVD
                Technology's obtains about 20% of its DVDR blank media supplies from
                Infosmart. Sales to DVD Technology account for 6.5% of Infosmart's
                revenue.
Management
      expects that the proportion of revenue accounted for by these customers will
      decrease as its new markets develop in South America. Infosmart will be careful
      to maintain relationships with existing customers in developed countries because
      they are expected to be volume buyers of Infosmart's HD DVD discs.
Our
      pricing and payment terms are flexible. Infosmart's objective is to build a
      strong base of loyal customers and management will offer competitive price
      to
      capture market share in specific markets that have strong growth prospects.
      Our
      payment terms are more stringent for new customers and more flexible for
      long-term customers and established businesses.
13
In
        the
        Brazil local market, it is the norm to pay Cash on Delivery (C.O.D.). Infosmart
        does not intend to give any payment terms to its Brazilian customers in 2006,
        which will eliminate any credit risk from new customers in this newly developed
        market. Only when Infosmart starts dealing with major supermarkets and chain
        stores in 2007, will Infosmart be giving payment terms of up to sixty (60)
        days
        for these long-term customers.
Competition
Competitive
      Products
We
      currently produce Single Layer ("SL") DVDR discs of two writable speeds (8x and
      16x), but we are preparing to launch production of High Density discs in the
      HD
      DVD format. The table and discussion below describe some competitor products:
Computer
      storage media comparison
Product
Media
                Type
Storage
                Capacity
Unit
                Price ($)
Price
                per MB (¢/MB)
Floppy
                Disc
Non-
                optical
1.44
                MB
0.22
23.75
USB
                Drive
Non-
                optical
2
                GB
70
                - 140
7-12
Flash
                Memory
Non-
                optical
1
                GB
76
                - 120
7.4-11.7
Hard
                Disc
Non-
                optical
200
                GB
130
0.06
CD-R
Optical
700
                MB
0.18-0.30
0.026-0.043
DVD±R*
Optical
4.7
                GB
0.6-0.8
0.012-0.017
DL
                DVD±R*
Optical
8.5
                GB
2.50
0.029
HD
                DVD**
Optical
15-30
                GB
10-15
0.05-0.07
Blu-Ray
Optical
25-50
                GB
25-30
0.06-0.10
Note:
      1GB
      = 1024 MB
Optical
      storage media, hard discs, USB drives and flash memory are the most commonly
      used computer storage media. Hard discs have up to 500GB of capacity, cost
      around $0.75/GB and are the most economical choice for large storage needs.
      However the hard disc is less versatile, more fragile and harder to install
      than
      optical storage media; it is also bulky and has poor portability.
Both
      USB
      drives and flash memory are compact in size, provide great portability and
      reusability, but are relatively expensive ($70-100/GB) and have limited storage
      capacity (maximum only 1-2 GB). These devices are mainly used to store computer
      and music/home video files where portability is required. Floppy disc capacity
      is too small for multimedia or today's software files.
For
      full
      movies or computer file backups CD-R and DVDR offer large (from 750MB to 9.4GB)
      and economical (from $0.18 to $0.80 per disc) storage solutions. Rewritable
      DVD±RW discs are reusable but more expensive, and therefore less popular, than
      write-once DVD±R discs.
HD
      DVD
      and Blu-Ray represent the next optical media generation after DL DVD. HD DVD
      specifications were proposed in February 2004 by NEC and Toshiba. Blu-Ray and
      HD
      DVD discs have ultra-large capacity and are predicted to be impacting the market
      in a significant way from late 2006 to 2007.
Competitor
      Companies
Infosmart's
      competitors are numerous and include companies such as CMC Magnetics and UME
      Disc Group. Some of Infosmart's competitors have significantly larger
      manufacturing market share, but that is not necessarily indicative of greater
      profitability. Infosmart believes that it has achieved optimal capacity and
      can
      match the lowest SL DVD production costs anywhere in the industry.
14
Product
      Mix
Currently,
      8x DVDR discs account for 100% of Infosmart's exports to Brazil and
      approximately 70% of Infosmart's output by value in Hong Kong, while 16x DVDR
      discs make up the remainder. Management expects that the demand for 8x DVDR
      discs in Brazil will be strong for the foreseeable future because current
      recording hardware installed in Brazil and other developing countries mostly
      utilize 8x DVDR discs. Infosmart expects to ship almost 20 million 8x DVDR
      discs
      from Hong Kong to Brazil in 2006 to satisfy Brazilian demand before the
      Discobras plant begins production. Infosmart expects the Discobras production
      facility will produce 13.2 million 8x DVDR discs in 2006 and 67.6 million discs
      in 2007. Infosmart's Hong Kong production facilities are projected to produce
      50.6 million and 58.1 million 8x DVDR discs in 2006 and 2007, respectively,
      to
      fulfill non-Brazilian demand from existing customers around the world and new
      customers in developing markets such as Chile, Argentina, and Nigeria. In total,
      Infosmart's group sales for 8x DVDR discs are expected to be 92.1 million discs
      and 127.7 million discs in 2006 and 2007, respectively.
Infosmart's
      sales of 16x DVDR discs are not expected to grow as much because the company
      will focus its efforts on generating incremental sales mainly to developing
      country markets, where 8x DVDR discs rather than 16x DVDR discs are expected
      to
      be mainstream in 2006 and 2007. Management projects that 16x DVDR disc sales
      will be approximately 39.6 million discs in 2006 and in 2007. Management
      anticipates that the company will ship around 1.9 million HD DVD discs in 2007.
Principal
      Executive Offices
Our
      principal executive office
located
      at
5/F.,
      QPL
      Industrial Building, 126-140 Texaco Road, Tsuen Wan, Hong Kong
,
      China
      SAR and the telephone number is 852-
2944-9905
.
Filing
      Status
We
      file
      reports with the Securities and Exchange Commission ("SEC"). You can read and
      copy any materials we file with the Commission at its' Public Reference Room
      at
      450 Fifth Street, NW, Washington, DC 20549. You can obtain additional
      information about the operation of the Public Reference Room by calling the
      Commission at 1-800-SEC-0330. In addition, the Commission maintains an Internet
      site (www.sec.gov) that contains reports, proxy and information statements,
      and
      other information regarding issuers that file electronically with the
      Commission, including us.
15
RISK
      FACTORS
You
      should carefully consider the risks described below together with all of the
      other information included in this report before making an investment decision
      with regard to our securities. The statements contained in or incorporated
      into
      this offering that are not historic facts are forward-looking statements that
      are subject to risks and uncertainties that could cause actual results to differ
      materially from those set forth in or implied by forward-looking statements.
      If
      any of the following risks actually occurs, our business, financial condition
      or
      results of operations could be harmed. In that case, the trading price of our
      common stock could decline, and you may lose all or part of your investment.
Risks
      Relating to the Infosmart's Business
The
      limited operating history of Infosmart makes evaluation of our business
      difficult.
The
      Company and its subsidiaries have limited operating histories. Infosmart was
      incorporated in the British Virgin Islands on August 23, 2005, and
IS
      Technology was founded in August of 2002. These limited operating histories
      and
      the unpredictability of our industry make it difficult for investors to evaluate
      our business and future operating results. An investor in the Company's
      securities must consider the risks, uncertainties and difficulties frequently
      encountered by companies in new and rapidly evolving markets. The risks and
      difficulties we face include challenges in accurate financial planning as a
      result of limited historical data and the uncertainties resulting from having
      had a relatively limited time period in which to implement and evaluate our
      business strategies as compared to older companies with longer operating
      histories.
Infosmart
      currently experiences customer concentration, which exposes it to all of the
      risks faced by Infosmart's material customers.
Currently,
      84% of all of our revenues are derived from three customers. E-Net Distribution,
      Infosmart's largest customer, contributes approximately 69% of Infosmart's
      revenues. DVD Technology and NaSa Multimedia Technology each contribute
      approximately 6.5% and 8.7%, respectively, of Infosmart's revenues. Until
      Infosmart secures additional customer relationships, it is possible that
      Infosmart may experience periods during which it will be highly dependent on
      one
      or a limited number of customers. Dependence on a single or a few customers
      will
      make it difficult to negotiate satisfactorily attractive prices for the
      Company's products and will expose the Company to the risk of substantial losses
      if a single dominant customer stops conducting business with the Company.
      Moreover, the Company will be subject to the risks faced by these major
      customers to the extent that such risks impede such customer's ability to stay
      in business and make timely payments to the Company.
We
      continually seek to develop new products and standards, which may not be widely
      adopted by consumers or, if adopted, may reduce demand by consumers for our
      older products.
We
      continually seek to develop new products and standards and enhance existing
      products and standards with higher memory capacities and other enhanced
      features. We cannot assure you that our new products and standards will gain
      market acceptance or that we will be successful in penetrating the new markets
      that we target. As we introduce new products and standards, it will take time
      for these new products and standards to be adopted, for consumers to accept
      and
      transition to these new products and standards and for significant sales to
      be
      generated from them, if this happens at all. Moreover, broad acceptance of
      new
      products and standards by consumers may reduce demand for our older products
      and
      standards. If this decreased demand is not offset by increased demand for our
      new products and standards, our results of operations could be harmed. We cannot
      assure you that any new products or standards we develop will be commercially
      successful.
Our
      future operating results may fluctuate and cause the price of our common stock
      to decline.
We
      expect
      that our revenues and operating results will continue to fluctuate significantly
      from quarter to quarter due to various factors, many of which are beyond our
      control. The factors that could cause our operating results to fluctuate
      include, but are not limited to:
·
price
                competition;
·
general
                price increases by suppliers and manufacturers;
16
·
our
                  ability to maintain and expand our customer relationships;
·
the
                introduction of new or enhanced products and strategic alliances
                by us and
                our competitors;
·
the
                success of our brand-building and marketing campaigns;
·
consumer
                acceptance of our products and general shifts in consumer behavior
                with
                respect to our industry;
·
our
                ability to maintain, upgrade and develop our production facilities
                and
                infrastructure;
·
technical
                difficulties and system downtime;
·
the
                amount and timing of operating costs and capital expenditures relating
                to
                expansion of our business, operations and infrastructure;
·
general
                economic conditions as well as economic conditions specific to our
                industry; and
·
our
                ability to attract and retain qualified management and employees.
If
      our
      revenues or operating results fall below the expectations of investors or
      securities analysts, the price of our common stock could significantly decline.
Our
      ability to manage our future growth is uncertain.
We
      are
      currently anticipating a period of growth as a result of our corporate growth
      strategy, which aims to, among other things, further develop our manufacturing
      capabilities, expand our product offerings, and reach new customers. In pursuing
      these objectives, the resulting strain on our managerial, operational, financial
      and other resources could be significant. Success in managing such expansion
      and
      growth will depend, in part, upon the ability of senior management to manage
      effectively. Any failure to manage the anticipated growth and expansion could
      have a material adverse effect on our business.
Increased
      product returns will decrease our revenues and impact profitability.
We
      do not
      make allowances for product returns in our financial statements based on the
      fact that we have not had a material historical return rate. In order to keep
      product returns low, we continuously monitor product purchases and returns
      and
      may change our product offerings based on the rates of returns. If our actual
      product returns significantly increase, especially as we expand into new product
      categories, our revenues and profitability could decrease. Any changes in our
      policies related to product returns may result in customer dissatisfaction
      and
      fewer repeat customers.
Our
      growth and operating results could be impaired if we are unable to meet our
      future capital needs.
We
      may
      need to raise additional capital in the future to:
·
fund
                more rapid expansion;
·
acquire
                or expand into new facilities;
·
maintain,
                enhance and further develop our manufacturing systems;
·
develop
                new product categories or enhanced
                services;
·
fund
                acquisitions; or
·
respond
                to competitive pressures.
If
      we
      raise additional funds by issuing equity or convertible debt securities, the
      percentage ownership of our stockholders will be diluted. Furthermore, any
      new
      securities could have rights, preferences and privileges senior to those of
      the
      Company's preferred shares and the common stock into which the Company's
      preferred shares are convertible. We currently do not have any commitments
      for
      additional financing. We cannot be certain that additional financing will be
      available when and to the extent required or that, if available, it will be
      on
      acceptable terms. If adequate funds are not available on acceptable terms,
      we
      may not be able to fund our expansion, develop or enhance our products or
      services or respond to competitive pressures.
The
      loss of key senior management personnel could negatively affect our
      business.
We
      depend
      on the continued services and performance of our senior management and other
      key
      personnel, particularly Andy Kwok, our Chief Executive Officer, Gavin Wong,
      our
      V.P. of Sales and Marketing and Sebastian Tseng, our Regional Director for
      South
      America and V.P. of Production and R&D. The loss of any of our executive
      officers or other key employees could harm our business. Infosmart currently
      has
      employment agreements with its key personnel. Further, the Company expects
      that
      it will enter into employment agreements with certain of our executive officers
      and key employees upon completion of the Combination as described in more detail
      in the section of this Form 8-K Current Report titled "Employment Agreements"
Infosmart has a "key person" life insurance policy for Andy Kwok.
17
Rapid
      changes in technology could adversely affect our business and hurt our
      competitive position.
We
      believe that our ability to increase sales by developing appealing, innovative
      products has an important role to play in our growth. However, it is extremely
      difficult to predict future demand in the rapidly changing storage media
      industry and develop new technologies to meet that demand. We may fail to
      develop and supply in a timely manner attractive, new products with innovative
      technologies for this industry and its markets. In the event that our management
      misreads the industry and market and/or is slow in developing innovative
      technologies on a cost competitive basis, actual earnings could differ
      significantly from our forecasts. At the same time, we may cease to be able
      to
      compete in markets, resulting in a significant adverse effect on our business
      results and growth prospects.
The
      use of technologies and intellectual properties for the production of all of
      our
      products are derived from two cooperation agreements and the failure to maintain
      the effectiveness of such agreements could substantially and adversely affect
      our business.
Our
      ability to produce our products depends on two cooperation agreements (the
      "Cooperation Agreements") with two parties ("Cooperative Partners") that have
      been granted licenses (the "Patent Licenses") for the use of technologies and
      intellectual properties necessary for the production of all of our products.
      Such Cooperation Agreements currently expire on December 31, 2006, but Infosmart
      can renew both agreements. A failure to extend and otherwise maintain
      effectiveness of such agreements could prevent us from conducting our business
      of manufacturing our products and could substantially and adversely affect
      our
      business.
The
      patents required for manufacturing our DVD products are owned by multiple
      companies. Our failure to obtain all of the required patents to manufacture
      our
      products may interfere with our current or future product development and sales.
We
      have
      never conducted a comprehensive patent search relating to the technology we
      use
      in our products. The Patent Licenses held by the parties with whom we have
      Cooperation Agreements were obtained through a joint patent licensing program
      (the "DVDR Patent License Program") that is administered by Koninklijke Philips
      Electronics, N.V. ("Philips"). Parties acquiring the patent licenses through
      this DVDR Patent License Program are allowed to use patents owned by companies
      including Philips, Sony, Pioneer and/or Hewlett Packard (or for which such
      companies have patent applications pending) that are essential for manufacturing
      DVDR products. However, there may be other issued or pending patents owned
      by
      third parties that are required for manufacturing our products for which our
      Cooperative Partners do not have a patent license. If so, we could incur
      substantial costs defending against patent infringement claims or we could
      even
      be blocked from selling our products. We cannot determine with certainty whether
      any other existing third party patents or the issuance of any new third party
      patents would require us or our Cooperative Partners to alter, or obtain
      licenses relating to, our processes or products, or implement alternative
      non-infringing approaches, all at a significant additional cost to the Company.
      There is no assurance that we or our Cooperative Partners will be able to obtain
      any such licenses on terms favorable to us, if at all, and obtaining and paying
      royalties on new licenses might materially increase our costs. Additionally,
      the
      fees in respect of existing licenses could increase materially in the future
      when these licenses are renewed, and such increase may have a significantly
      and
      adversely impact our business.
Infosmart's
      inability to obtain its own Patent Licenses through the DVD Patent License
      Program prior to the expiration of the Cooperation Agreements could adversely
      affect its operations.
Infosmart
      is planning to apply for its own Patent Licenses before the expiration of the
      two Cooperation Agreements within 90 days of the closing of the Combination.
      In
      the event that Infosmart is unable to obtain its own Patent Licenses, then
      it
      plans to exercise its option to renew Cooperation Agreements. However, if the
      Company is unable to obtain its own Patent Licenses then we may not be able
      to
      manufacture our products and this could significantly and adversely affect
      our
      business results and financial condition. Infosmart's inability to either obtain
      its own Patent Licenses or to renew and maintain the effectiveness of the
      Cooperation Agreements could result in delays in product development or prevent
      us from selling our products until equivalent substitute technology can be
      identified, licensed and/or integrated or until we are able to substantially
      engineer our products to avoid infringing the rights of third parties. We might
      not be able to renegotiate agreements, be able to obtain necessary licenses
      in a
      timely manner, on acceptable terms, or at all, or be able to re-engineer our
      products successfully. Moreover, the loss of or inability to extend any of
      these
      Patent Licenses would increase the risk of infringement claims being made
      against us, which claims could have a material adverse effect on our
      business.
18
Infosmart
      may be unable to obtain its own new Hong Kong business customs license for
      its
      manufacturing facilities in Hong Kong
The
      Hong
      Kong government requires companies manufacturing DVDs to obtain a
business
      license for the manufacture of optical Disc/Stampers (the "HK Business
      Licenses") from the Customs and Excise Department of Hong Kong.
Infosmart currently manufacturers its products under HK Business Licenses held
      by its Cooperative Partners under the Cooperation Agreement. In addition, the
      Company plans to obtain its own HK Business Licenses for its Hong Kong factories
      within 90 days of the Closing of the Offering. However, if the Company is unable
      to obtain such bu
siness
      licenses and is also unable to extend the Cooperation Agreements beyond December
      31, 2006, then production of our products at Infosmart's Hong Kong factories may
      be halted, causing substantial losses to the Company.
Our
      business may suffer if we are sued for infringing upon the intellectual property
      rights of third parties.
There
      may
      be cases where it is alleged that the Company's products infringe on the
      intellectual property rights of third parties. As a result, the Company may
      suffer damages or may be sued for damages. In either case, settlement
      negotiations and legal procedures would be inevitable and could be expected
      to
      be lengthy and expensive. If the Company's assertions are not accepted in such
      disputes, it may have to pay damages and royalties and suffer losses such as
      the
      loss of markets. The failure to prevent infringement on the rights of others
      could have a materially adverse effect on the Company's business development and
      business results and financial condition.
We
      are dependent on certain raw materials and other products, and our business
      will
      suffer if we are unable to procure such materials and products.
Our
      manufacturing systems are premised on deliveries of raw materials and other
      supplies in adequate quality and quantity in a timely manner from many external
      suppliers. In new product development, the Company may rely on certain
      irreplaceable suppliers for materials. Because of this, there may be cases
      where
      supplies of raw materials and other products to the Company are interrupted
      by:
      an accident or some other event at a supplier; supply is suspended due to
      quality or other issues; or there is a shortage of or instability in supply
      due
      to a rapid increase in demand for finished products that use certain materials
      and products. If any of these situations becomes protracted, the Company may
      have difficulty finding substitutes in a timely manner from other suppliers,
      which could have a significant, adverse effect on the Company's production and
      prevent it from fulfilling its responsibilities to supply products to its
      customers. Furthermore, if an imbalance arises in the supply-demand equation,
      there could be a spike in the price of raw materials. In the event of these
      or
      other similar occurrences, there could be a material adverse effect on the
      Company's business results and financial condition.
We
      compete in a highly competitive industry where some of our competitors are
      larger and have more resources than us.
We
      operate in a highly competitive environment. Our competitors are both larger
      and
      smaller than Infosmart in terms of resources and market share. The marketplaces
      in which Infosmart operates are generally characterized by rapid technological
      change, frequent new product introductions and declining prices. In these highly
      competitive markets, the Company's success will depend to a significant extent
      on its ability to continue to develop and introduce differentiated and
      innovative products and customer solutions successfully on a timely basis.
      The
      success of the Company's product offerings is dependent on several factors
      including understanding customer needs, strong digital technology,
      differentiation from competitive offerings, market acceptance and lower costs.
      Although management believes that it can take the necessary steps to meet the
      competitive challenges of these marketplaces, no assurance can be given with
      regard to the Company's ability to take these steps, the actions of competitors,
      some of which will have greater resources than the Company, or the pace of
      technological changes.
Technology
      in our industry evolves rapidly, potentially causing our products to become
      obsolete, and we must continue to enhance existing systems and develop new
      systems or we will lose sales.
Rapid
      technological advances, rapidly changing customer requirements and fluctuations
      in demand characterize the current market for our products. Further, there
      are
      alternative data storage media and additional media is under development,
      including high capacity hard drives, new CD-R/DVD-R technologies, file servers
      accessible through computer networks and the Internet. Our existing and
      development-stage products may become obsolete if our competitors introduce
      newer or more appealing technologies. If these technologies are patented or
      proprietary to our competitors, we may not be able to access these technologies.
      We believe that we must continue to innovate and anticipate advances in the
      storage media industry in order to remain competitive. If we fail to anticipate
      or respond to technological developments or customer requirements, or if we
      are
      significantly delayed in developing and introducing products, our business
      will
      suffer lost sales.
19
Our
      market is becoming more competitive. Competition may result in price reductions,
      lower gross profits and loss of market share.
The
      storage media industry is becoming more competitive and we face the potential
      for increased competition in developing and selling our products. Our
      competitors may have or could develop or acquire significant marketing,
      financial, development and personnel resources. We cannot assure you that we
      will be able to compete successfully against our current or future competitors.
      The storage media industry has increased visibility, which may lead to large,
      well-known, well-financed companies entering into this market. Increased
      competition from manufacturers of systems or consumable supplies may result
      in
      price reductions, lower gross profit margins, increased discounts to
      distribution and loss of market share and could require increased spending
      by us
      on research and development, sales and marketing and customer support.
If
      Infosmart is unable to compete effectively with existing or new competitors,
      the
      loss of its competitive position could result in price reductions, fewer
      customer orders, reduced revenues, reduced margins, reduced levels of
      profitability and loss of market share.
Infosmart
      has several competitors, which include the largest DVDR manufacturers in the
      world. Certain of these competitors compete aggressively on price and seek
      to
      maintain very low cost structures. Some of these competitors are seeking to
      increase their market share, which creates increased pressure, including pricing
      pressure, within the market. In addition, certain of the competitors, including
      CMC and Ritek, have financial and human resources that are substantially greater
      than those of Infosmart, which increases the competitive pressures Infosmart
      faces. Customers make buying decisions based on many factors, including among
      other things, new product and service offerings and features; product
      performance and quality; ease of doing business; a vendor's ability to adapt to
      customers' changing requirements; responsiveness to shifts in the marketplace;
      business model; contractual terms and conditions; vendor reputation and vendor
      viability. As competition increases, each factor on which Infosmart competes
      becomes more important and the lack of competitive advantage with respect to
      one
      or more of these factors could lead to a loss of competitive position, resulting
      in fewer customer orders, reduced revenues, reduced margins, reduced levels
      of
      profitability and loss of market share. Infosmart expects competitive pressure
      to remain intense.
The
      products Infosmart makes have a life cycle. If Infosmart is unable to
      successfully time market entry and exit and manage its inventory, it may fail
      to
      enter profitable markets or exit unprofitable markets.
We
      operate in a highly competitive, quickly changing environment. Infosmart is
      preparing for HD DVD production. Thirty two (32) of Infosmart's forty four (44)
      production lines can be upgraded to HD DVD production at a time of management's
      choosing. However, if the market turns in favor of Blu-Ray, the Company will
      have to purchase new equipment to produce Blu-Ray discs, and thus the company's
      business and operating results could be adversely affected. If strong
      competitors challenge Infosmart in Brazil and other key markets, the Company
      will need to quickly develop an adequate competitive response. If the Company
      fails to accurately anticipate market and technological trends its business
      and
      operating results could be materially and adversely affected.
We
      must
      also be able to manufacture the products at acceptable costs. This requires
      us
      to be able to accurately forecast customer demand so that it can procure the
      appropriate inputs at optimal costs. We must also try to reduce the levels
      of
      older product inventories to minimize inventory write-offs. If the Company
      has
      excess inventory, it may be necessary to reduce its prices and write down
      inventory, which could result in lower gross margins. Additionally, the
      Company's customers may delay orders for existing 8x or 16x products in
      anticipation of new HD DVD or Blu-Ray product introductions. As a result, the
      Company may decide to adjust prices of existing products during this process
      to
      try to increase customer demand for these products. The Company's future
      operating results would be materially and adversely affected if such pricing
      adjustments were to occur and the Company was unable to mitigate the resulting
      margin pressure by maintaining a favorable mix of products, or if the Company
      was unsuccessful in achieving input cost reductions, operating efficiencies
      and
      increasing sales volumes.
If
      the
      Company is unable to timely develop, manufacture, and introduce new products
      in
      sufficient quantity to meet customer demand at acceptable costs, or if Company
      is unable to correctly anticipate customer demand for the Company's new and
      existing products, the Company's business and operating results could be
      materially adversely affected.
20
If
      our products fail to compete successfully with other existing or newly-developed
      products for the storage media industry, our business will
      suffer.
The
      success of our products depends upon end users choosing our DVDR technology
      for
      their storage media needs. However, alternative data storage media exist, such
      as high capacity hard drives, new CD-R/DVDR technologies, file servers
      accessible through computer networks and the Internet, and additional media
      is
      under development. If end users perceive any technology that is competing with
      ours as more reliable, higher performing, less expensive or having other
      advantages over our technology, the demand for our DVDR products could decrease.
      Further, some of our competitors may make strategic acquisitions or establish
      cooperative relationships with suppliers or companies that produce complementary
      products such as cameras, computer equipment, software or biometric
      applications. Competition from other storage media is likely to increase. If
      our
      products do not compete successfully with existing or new competitive products,
      our business will suffer.
Our
      products may have manufacturing or design defects that we discover after
      shipment, which could negatively affect our revenues, increase our costs and
      harm our reputation.
Our
      products may contain undetected and unexpected defects, errors or failures.
      If
      these product defects are substantial, the result could be product recalls,
      an
      increased amount of product returns, loss of market acceptance and damage to
      our
      reputation, all of which could increase our costs and cause us to lose sales.
      We
      do not carry general commercial liability insurance covering our products.
      In
      addition, Infosmart is preparing to launch production of HD DVD discs in 2007.
      HD DVD production will require the company to master new production techniques
      and modify machinery and equipment. It is possible that the Company may fail
      to
      achieve mastery of these new techniques and production yields could suffer
      as a
      result.
The
      development of digital distribution alternatives, including the copying and
      distribution of music and video and other electronic data files could lessen
      the
      demand for our products.
We
      are
      dependent on the continued viability and growth of physical distribution of
      music, video and other electronic data through recordable media. Alternative
      distribution channels and methods, both authorized and unauthorized, for
      delivering music, video and other electronic data may erode our volume of sales
      and the pricing of its products and services. The growth of these alternatives
      is driven by advances in technology that allow for the transfer and downloading
      of music, video and other electronic data files from the Internet. The
      proliferation of this copying, use and distribution of such files is supported
      by the increasing availability and decreasing price of new technologies, such
      as
      personal video recorders, DVD burners, portable MP3 music and video players,
      widespread access to the Internet, and the increasing number of peer-to-peer
      digital distribution services that facilitate file transfers and downloading.
      We
      expect that file sharing and downloading, both legal and illegal, will continue
      to exert downward pressure on the demand for traditional DVDRs. As current
      technologies and delivery systems improve, the digital transfer and downloading
      of music, video and other electronic data files will likely become more
      widespread. As the speed and quality with which music, video and other
      electronic data files can be transferred and downloaded improves, file sharing
      and downloading may in the future exert significant downward pressure on the
      demand for DVDRs. In addition, our business faces pressure from the emerging
      distribution alternatives, like video on demand ("VOD") and personal digital
      video recorders. As substantially all of our revenues are derived from the
      sale
      of DVDRs, increased file sharing, downloading and piracy or the growth of other
      alternative distribution channels and methods, could materially adversely affect
      its business, financial condition and results of operations.
The
      Company's revenues, cash flows and operating results may fluctuate for a number
      of reasons.
Future
      operating results and cash flows will continue to be subject to quarterly
      fluctuations based on a wide variety of factors, including seasonality. Although
      Infosmart's sales and other operating results can be influenced by a number of
      factors and historical results are not necessarily indicative of future results,
      Infosmart's sequential quarterly operating results generally fluctuate downward
      in the fourth quarter of each fiscal year when compared with the immediately
      preceding quarter. For example, the Company's first calendar quarter is modestly
      affected by the Chinese New Year.
A
      significant portion of the revenues will depend on the success of the Company's
      new venture in Brazil.
A
      significant portion of the Company's revenues will depend on the success of the
      Infosmart's new Brazilian venture. Infosmart has no prior manufacturing and
      distribution experience in Brazil, and will rely on the local knowledge of
      its
      Brazilian joint venture partner and the general knowledge of the South American
      marketplace of its regional director Sebastian Tseng. The Company's results
      could suffer should its relationships with either of these two parties
      deteriorate in the early months of the Brazilian venture.
21
We
      are at risk of losing our significant investment in Brazil if we are unable
      to
      obtain the intellectual property licenses required for our Discobras
      manufacturing facility.
The
      owners of the technologies and intellectual property necessary for the
      production of our products require that we obtain separate Patent Licenses
      for
      the use of intellectual property in our new DVDR manufacturing facility in
      Brazil. The Company plans to apply for the Patent Licenses for use at the
      Discobras manufacturing facility in 2006. However, if there is a substantial
      delay in obtaining approval for our use of the Patent Licenses, then we may
      be
      unable to manufacture a sufficient amount of our products to fill our sales
      orders, and this could cause the Company to lose substantial revenues. Further,
      in the event we are unable to obtain the Patent Licenses, then we may not be
      able to manufacture our products in Brazil, thus placing the Company at risk
      of
      losing its significant investment in the Brazilian venture.
Past
      activities of Cyber Merchants and its affiliates may lead to future liability
      for the combined companies.
Prior
      to
      the Combination, Cyber engaged in businesses unrelated to that of the Company's
      new operations. Any liabilities relating to such prior business against which
      Infosmart is not completely indemnified may have a material adverse effect
      on
      the Company.
Risks
      Relating To Doing Business in Hong Kong and Brazil
Adverse
      changes in economic and political policies of the People's Republic of China
      government could have a material adverse effect on the overall economic growth
      of Hong Kong, which could adversely affect our business.
Although,
      as described above, we are planning a new venture in Brazil, substantially
      all
      of our business operations are currently conducted in Hong Kong, a special
      administrative region in the People's Republic of China ("PRC"). Accordingly,
      our results of operations, financial condition and prospects are subject to
      a
      significant degree to economic, political and legal developments in Hong Kong
      and the PRC. The PRC's economy differs from the economies of most developed
      countries in many respects, including with respect to the amount of government
      involvement, level of development, growth rate, control of foreign exchange
      and
      allocation of resources. While the PRC economy has experienced significant
      growth in the past 20 years, growth has been uneven across different regions
      and
      among various economic sectors of China. The PRC government has implemented
      various measures to encourage economic development and guide the allocation
      of
      resources. Some of these measures benefit the overall PRC economy, but may
      also
      have a negative effect on us.
You
      may experience difficulties in effecting service of legal process, enforcing
      foreign judgments or bringing original actions in Hong Kong or China based
      on
      United States or other foreign laws against us, our management or the experts
      named in the prospectus.
We
      currently conduct substantially all of our operations in Hong Kong and
      substantially all of our assets are located in Hong Kong. In addition, all
      of
      our senior executive officers reside within Hong Kong. As a result, it may
      not
      be possible to effect service of process within the United States or elsewhere
      outside Hong Kong upon our senior executive officers, including with respect
      to
      matters arising under U.S. federal securities laws or applicable state
      securities laws. Moreover, neither the PRC nor Hong Kong have treaties with
      the
      United States or many other countries providing for the reciprocal recognition
      and enforcement of judgment of courts.
Fluctuation
      in the value of the Hong Kong Dollar may have a material adverse effect on
      your
      investment.
The
      value
      of the Hong Kong dollar against the U.S. dollar and other currencies may
      fluctuate and is affected by, among other things, changes in political and
      economic conditions. Although the exchange rate between the Hong Kong dollar
      and
      the U.S. dollar has been effectively pegged, there can be no assurance that
      the
      Hong Kong dollar will remain pegged, to the U.S. dollar, especially in light
      of
      the significant international pressure on the Chinese government to permit
      the
      free floatation of the RMB and the Hong Kong dollar, which could result in
      an
      appreciation of RMB or the Hong Kong dollar against the U.S. dollar. Our
      revenues and costs are mostly denominated in Hong Kong dollars, while a
      significant portion of our financial assets are also denominated in Hong Kong
      dollars. Any significant revaluation of the Hong Kong dollar may materially
      and
      adversely affect our cash flows, revenues, earnings and financial position,
      and
      the value of, and any dividends payable on, our stock in U.S. dollars. For
      example, an appreciation of the Hong Kong dollar against the U.S. dollar would
      make any new Hong Kong dollar denominated investments or expenditures more
      costly to us, to the extent that we need to convert U.S. dollars into Hong
      Kong
      dollars for such purposes. An appreciation of the Hong Kong dollar against
      the
      U.S. dollar would also result in foreign currency translation losses for
      financial reporting purposes when we translate our U.S. dollar denominated
      financial assets into the Hong Kong dollar, as the Hong Kong dollar is our
      reporting currency.
22
We
      face risks related to health epidemics and other outbreaks.
Our
      business could be adversely affected by the effects of SARS or another epidemic
      or outbreak. China and Hong Kong reported a number of cases of SARS in April
      2004. Any prolonged recurrence of SARS or other adverse public health
      developments in China or in Hong Kong may have a material adverse effect on
      our
      business operations. For instance, health or other government regulations
      adopted in response may require temporary closure of our production facilities
      or of our offices. Such closures would severely disrupt our business operations
      and adversely affect our results of operations. We have not adopted any written
      preventive measures or contingency plans to combat any future outbreak of SARS
      or any other epidemic.
Changes
      in Hong Kong or Brazil's political or economic situation could harm us and the
      Company's operational results.
In
      addition to our operations in Hong Kong, we are currently establishing a
      production facility and a sales base in Brazil. Economic reforms adopted by
      the
      Chinese or Brazilian governments have had positive effects on the economic
      development of these countries, but the governments could change these economic
      reforms or any of the legal systems at any time. This could either benefit
      or
      damage the Company's operations and profitability. Some of the things that could
      have this effect are:
·
Level
                of government involvement in the
                economy;
·
Control
                of foreign exchange;
·
Methods
                of allocating resources;
·
Balance
                of payments position;
·
International
                trade restrictions; and
·
International
                conflict.
Any
      of
      the foregoing events or other unforeseen consequences of public health problems
      could damage the Company's operations.
The
      Brazilian government has historically exercised, and continues to exercise,
      significant influence over the Brazilian economy. Brazilian political and
      economic conditions will have a direct impact on our business and the market
      price of our securities.
The
      Brazilian government frequently intervenes in the Brazilian economy and
      occasionally makes substantial changes in policy, as often occurs in other
      emerging economies. The Brazilian government's actions to control inflation and
      carry out other policies have in the past involved wage and price controls,
      currency devaluations, capital controls and limits on imports, among other
      things. Our business, financial condition and results of operations may be
      adversely affected by factors in Brazil including:
·
Currency
                volatility;
·
Inflation
                acceleration;
·
Monetary
                policy and interest rate increases;
·
Fiscal
                policy and tax changes;
·
International
                trade policy including tariff and non-tariff trade
                barriers;
·
Foreign
                exchange controls;
·
Energy
                shortages; and
·
Other
                political, social and economic developments in or affecting
                Brazil.
In
      2005,
      government figures, legislators and political party officials, especially those
      of the President's party, have been the subject of a variety of allegations of
      unethical or illegal conduct. These accusations, which are currently being
      investigated by the Brazilian Congress, involve campaign financing and election
      law violations, and influencing of government officials and Congressmen in
      exchange for political support. Several members of the President's party and of
      the federal government, including the President's chief of staff, have resigned.
      We cannot predict what effect these accusations and investigations may have
      on
      the Brazilian economy.
Inflation
      and government measures to curb inflation may contribute significantly to
      economic uncertainty in Brazil and to heightened volatility in the Brazilian
      securities markets and, consequently, may adversely affect our business in
      Brazil.
Brazil
      has in the past experienced extremely high rates of inflation, with annual
      rates
      of inflation reaching as high as 2,567% in 1993 (as measured by the
Índice
      Geral de Preços do Mercado
published by
Fundação
      Getúlio Vargas
,
      or
      IGP-M Index). More recently, Brazil's rates of inflation were 10.4% in 2001,
      25.3% in 2002, 8.7% in 2003, 12.4% in 2004 and 0.2% in the nine months ended
      September 30, 2005 (as measured by the IGP-M Index). Inflation,
      governmental measures to combat inflation and public speculation about possible
      future actions have in the past had significant negative effects on the
      Brazilian economy and have contributed to economic uncertainty in Brazil. If
      Brazil experiences substantial inflation in the future, our costs may increase
      and our operating and net margins may decrease. Inflationary pressures may
      also
      lead to further government intervention in the economy, which could involve
      the
      introduction of government policies that may adversely affect the overall
      performance of the Brazilian economy.
23
Restrictions
      on currency exchange may limit the Company's ability to receive and use the
      Company's revenues effectively
.
If
      we
      successfully establish our business operations in Brazil, some of the Company's
      revenues will be settled in the Brazilian Real. Any future restrictions on
      currency exchanges may limit the Company's ability to use revenue generated in
      Reals to fund any future business activities outside Brazil or to make dividend
      or other payments in U.S. dollars. Currently, the Company can legally exchange
      and transfer out of Brazil after-tax profits of up to the Company's total
      investment in its Brazilian subsidiary Discobras, which we expect to be
      approximately $8 million for 2006 and an additional $6 million for
      2007.
The
      value of the Company's securities will be affected by the foreign exchange rate
      between the U.S. dollar, the Hong Kong dollar and the
      Real.
The
      value
      of the Company's common stock will be affected by the foreign exchange rate
      between U.S. and Hong Kong dollars and Real, and between those currencies and
      other currencies in which the Company's sales may be denominated. For example,
      to the extent that the Company needs to convert U.S. or Hong Kong dollars into
      Real for the Company's operational needs and should the Real appreciate against
      the U.S. dollar at that time, the Company's financial position, the business of
      the Company, and the price of the Company's common stock may be harmed.
      Conversely, if the Company decides to convert the Company's Real into U.S. or
      Hong Kong dollars for the purpose of declaring dividends on the Company's common
      stock or for other business purposes and the U.S. dollar appreciates against
      the
      Real, the U.S. or Hong Kong dollar equivalent of the Company's earnings from the
      Company's subsidiaries in Hong Kong would be reduced. The Company will engage in
      hedging activities to manage our financial exposure related to currency exchange
      fluctuation. In these hedging activities, we might use fixed-price, forward,
      futures, financial swaps and option contracts traded in the over-the-counter
      markets or on exchanges, as well as long-term structured transactions when
      feasible.
We
      will depend on Brazil's foreign investment incentive programs, which provide
      reductions in taxation or exemptions from taxation for our operations in Brazil.
      The loss of the tax benefits from these incentive programs may substantially
      affect our earnings.
Under
      the
      State of Bahia's investment incentive program, our Brazilian subsidiary,
      Discobras, has been granted a reduction in the Value Added Tax ("VAT") it is
      required to pay for products. Discobras pays 2.28% only, as compared to VAT
      of
      12% in Salvador, or 18% in São Paulo. This VAT reduction will be available to us
      until June 2016. We will also avail ourselves of an incentive program for
      foreign investment which exempts Discobras from paying Brazil's ICMS taxes on
      raw materials it imports for production in Brazil and create substantial tax
      savings for the Company. This tax exemption will last through
June
2016.
      In
      the event that the VAT reduction program is no longer available to us or we
      are
      unable to extend the ICMS tax-exemption, our after-tax earnings would decline
      by
      the amount of the tax benefits, which may be substantial.
Risks
      Relating to this Offering and Ownership of Our
      Securities
Your
      rights with respect to ownership of the Company's Series A and Series B
      Preferred Shares are set forth in the Certificate of Determination of
      Rights, Preferences, Privileges and Restrictions for the Series A and Series
      B
      Preferred Stock and form of Warrants and such documents should be reviewed
      carefully with your legal counsel.
Your
      rights with respect to ownership of the Company's Series A and Series B
      Preferred Shares  are set forth in the Certificate of Determination of
      Rights, Preferences, Privileges and Restrictions for the Series A and
      Series B Preferred Stock that is attached hereto as Exhibits 3.3 and
      3.4 and in the form of Warrant attached as Exhibit 10.17 to this Form 8-K.
      Such documents contain important provisions that provide you with rights,
      limitations and obligations and should be reviewed carefully with your legal
      counsel.
24
Upon
        closing of the Exchange and the Financing, we will operate as a public
        company subject to evolving corporate governance and public disclosure
        regulations that may result in additional expenses and continuing uncertainty
        regarding the application of such regulations.
Changing
      laws, regulations and standards relating to corporate governance and public
      disclosure, including the Sarbanes-Oxley Act of 2002 and related rules and
      regulations, are creating uncertainty for public companies. We are presently
      evaluating and monitoring developments with respect to new and proposed rules
      and cannot predict or estimate the amount of the additional compliance costs
      we
      may incur or the timing of such costs. These new or changed laws, regulations
      and standards are subject to varying interpretations, in many cases due to
      their
      lack of specificity, and as a result, their application in practice may evolve
      over time as new guidance is provided by courts and regulatory and governing
      bodies. This could result in continuing uncertainty regarding compliance matters
      and higher costs necessitated by ongoing revisions to disclosure and governance
      practices. Maintaining appropriate standards of corporate governance and public
      disclosure may result in increased general and administrative expenses and
      a
      diversion of management time and attention from revenue-generating activities
      to
      compliance activities. In addition, if we fail to comply with new or changed
      laws, regulations and standards, regulatory authorities may initiate legal
      proceedings against us and our business and our reputation may be harmed.
Following
      the Exchange and the Financing, the shares of the Company may have limited
      liquidity.
Following
      the Exchange and the Financing, a substantial portion of the Company's
      shares of common stock will be subject to registration, and will be closely
      held
      by certain institutional and insider investors. Consequently, the public float
      for the shares may be highly limited. As a result, should you wish to convert
      the Series B Preferred Stock and sell your shares into the open market you
      may
      encounter difficulty selling large blocks of your shares or obtaining a suitable
      price at which to sell your shares.
The Series
      B Preferred Shares sold by us in the Financing initially will not
      be registered and you will not be able to sell these preferred shares or
      the shares of common stock underlying the preferred shares of the
      Company you obtain in the Financing until such shares are registered. There
      can be no assurance that we will be able to register the shares of the Company
      in a timely manner.
None
      of
      the Series B Preferred Shares ("Securities"), the Cyber Merchants shares of
      common stock underlying the Securities, nor the shares of the Company's common
      stock issued to the holders of Infosmart's capital stock in the Exchange
      will be registered or freely tradable immediately after the closing of
      the Financing and Exchange. We will use our reasonable best efforts to
      register the shares of the Company's common stock underlying the Securities that
      you obtain pursuant to the Offering in the time frame laid out in the
      Registration Rights Agreement that will be entered into by you and us in
      connection with your investment. However, there can be no assurance that we
      will
      be able to meet the time frame laid out in the Registration Rights Agreement.
      Our inability to meet such registration requirements will force you to hold
      the
      Securities acquired in the Financing for a substantial period of time
      without having liquidity for those Securities or the shares of the Company's
      common stock underlying the Securities.
Our
      stock price may be volatile, which may result in losses to our shareholders.
The
      stock
      markets have experienced significant price and trading volume fluctuations,
      and
      the market prices of companies quoted on the Over-The-Counter Bulletin Board,
      the stock market in which shares of the Company's common stock will be quoted,
      generally have been very volatile and have experienced sharp share price and
      trading volume changes. The trading price of our common stock is likely to
      be
      volatile and could fluctuate widely in response to many of the following
      factors, some of which are beyond our control:
·
variations
                in our operating results;
·
announcements
                of technological innovations, new services or product lines by us
                or our
                competitors;
·
changes
                in expectations of our future financial performance, including financial
                estimates by securities analysts and investors;
·
changes
                in operating and stock price performance of other companies in our
                industry;
·
additions
                or departures of key personnel; and
·
future
                sales of our common stock.
Domestic
      and international stock markets often experience significant price and volume
      fluctuations. These fluctuations, as well as general economic and political
      conditions unrelated to our performance, may adversely affect the price of
      our
      common stock. In particular, following initial public offerings, the market
      prices for stocks of companies often reach levels that bear no established
      relationship to the operating performance of these companies. These market
      prices are generally not sustainable and could vary widely. In the past,
      following periods of volatility in the market price of a public company's
      securities, securities class action litigation has often been
      initiated.
25
We
      have broad discretion as to the use of proceeds from this Financing and may
      not use the proceeds effectively.
Our
      management team will retain broad discretion as to the allocation and timing
      of
      the use of proceeds from the Financing and may spend these proceeds in ways
      with which our shareholders may not agree. The failure of our management to
      apply these funds effectively could result in unfavorable returns and
      uncertainty about our prospects, each of which could cause the price of our
      common stock to decline.
We
      anticipate that upon the completion of the Financing and Exchange, our
      officers and directors will own a substantial portion of our outstanding common
      stock, which will enable them to influence many significant corporate actions
      and in certain circumstances may prevent a change in control that would
      otherwise be beneficial to our shareholders.
Upon
      completion of the Financing and Exchange, our directors and executive
      officers will control approximately 64% of our outstanding shares of common
      stock. Specifically, Andy Kwok, Infosmart's Chief Executive Officer and Pauline
      Sze, Infosmart's Chief Financial Officer, will control approximately 64% of the
      outstanding shares of common stock of the Company upon completion of
      the Financing and the Exchange. These stockholders, acting together, could
      have a substantial impact on matters requiring the vote of the shareholders,
      including the election of our directors and most of our corporate actions.
      This
      control could delay, defer or prevent others from initiating a potential merger,
      takeover or other change in our control, even if these actions would benefit
      our
      shareholders and us. This control could adversely affect the voting and other
      rights of our other shareholders and could depress the market price of our
      common stock.
A
      large number of additional shares may be sold into the public market in the
      near
      future, which may cause the market price of our common stock to decline
      significantly, even if our business is doing well.
Sales
      of
      a substantial amount of common stock in the public market, or the perception
      that these sales may occur, could adversely affect the market price of our
      common stock. After the Financing and the conversion of our Series A Preferred
      Stock and our Series B Preferred Stock, we will have approximately 159,000,745
      shares of common stock outstanding. This includes 116,721,360 shares to be
      received by the shareholders of Infosmart in the Combination after the
      conversion of the Series A Preferred Stock. As restrictions on resale of such
      additional shares end, the market price could drop significantly if the holders
      of these restricted shares sell them or are perceived by the market as intending
      to sell them.
We
      will incur increased costs and compliance risks as a result of becoming a public
      company.
As
      a
      public company, we will incur significant legal, accounting and other expenses
      that Infosmart did not incur as a private company prior to the Financing
      and Exchange. We will incur costs associated with our public company reporting
      requirements. We also anticipate that we will incur costs associated with
      recently adopted corporate governance requirements, including certain
      requirements under the Sarbanes-Oxley Act of 2002, as well as new rules
      implemented by the SEC and the National Association of Securities Dealers
      ("NASD"). We expect these rules and regulations, in particular Section 404 of
      the Sarbanes-Oxley Act of 2002, to significantly increase our legal and
      financial compliance costs and to make some activities more time-consuming
      and
      costly. Like many smaller public companies, we face a significant impact from
      required compliance with Section 404 of the Sarbanes-Oxley Act of 2002. Section
      404 requires management of public companies to evaluate the effectiveness of
      internal control over financial reporting and the independent auditors to attest
      to the effectiveness of such internal controls and the evaluation performed
      by
      management. The SEC has adopted rules implementing Section 404 for public
      companies as well as disclosure requirements. The Public Company Accounting
      Oversight Board, or PCAOB, has adopted documentation and attestation standards
      that the independent auditors must follow in conducting its attestation under
      Section 404. We are currently preparing for compliance with Section 404;
      however, there can be no assurance that we will be able to effectively meet
      all
      of the requirements of Section 404 as currently known to us in the currently
      mandated timeframe. Any failure to implement effectively new or improved
      internal controls, or to resolve difficulties encountered in their
      implementation, could harm our operating results, cause us to fail to meet
      reporting obligations or result in management being required to give a qualified
      assessment of our internal controls over financial reporting or our independent
      auditors providing an adverse opinion regarding management's assessment. Any
      such result could cause investors to lose confidence in our reported financial
      information, which could have a material adverse effect on our stock price.
26
We
      also
      expect these new rules and regulations may make it more difficult and more
      expensive for us to obtain director and officer liability insurance and we
      may
      be required to accept reduced policy limits and coverage or incur substantially
      higher costs to obtain the same or similar coverage. As a result, it may be
      more
      difficult for us to attract and retain qualified individuals to serve on our
      Board of Directors or as executive officers. We are currently evaluating and
      monitoring developments with respect to these new rules, and we cannot predict
      or estimate the amount of additional costs we may incur or the timing of such
      costs.
If
      we fail to maintain the adequacy of our internal controls, our ability to
      provide accurate financial statements and comply with the requirements of the
      Sarbanes-Oxley Act of 2002 could be impaired, which could cause our stock price
      to decrease substantially.
Since,
      prior to the Financing, Infosmart operated as a private company without public
      reporting obligations, Infosmart has committed limited personnel and resources
      to the development of the external reporting and compliance obligations that
      would be required of a public company. Recently, Infosmart has taken measures
      to
      address and improve our financial reporting and compliance capabilities and
      we
      are in the process of instituting changes to satisfy our obligations in
      connection with joining a public company, when and as such requirements become
      applicable to us. Prior to taking these measures, we did not believe we had
      the
      resources and capabilities to do so. We plan to obtain additional financial
      and
      accounting resources to support and enhance our ability to meet the requirements
      of being a public company. We will need to continue to improve our financial
      and
      managerial controls, reporting systems and procedures, and documentation
      thereof. If our financial and managerial controls, reporting systems or
      procedures fail, we may not be able to provide accurate financial statements
      on
      a timely basis or comply with the Sarbanes-Oxley Act of 2002 as it applies
      to
      us. Any failure of our internal controls or our ability to provide accurate
      financial statements could cause the trading price of our common stock to
      decrease substantially.
Cyber
      Merchants common shares are thinly traded and, you may be unable to sell at
      or
      near ask prices or at all if you need to convert your Series B Preferred Stock
      and sell your shares to raise money or otherwise desire to liquidate such
      shares.
The
      Company cannot predict the extent to which an active public market for its
      common stock will develop or be sustained. Cyber Merchants' common shares have
      historically been sporadically or "thinly-traded" on the "Over-The-Counter
      Bulletin Board," meaning that the number of persons interested in purchasing our
      common shares at or near bid prices at any given time may be relatively small
      or
      non-existent. This situation is attributable to a number of factors, including
      the fact that Cyber Merchants is a small company which is relatively unknown
      to
      stock analysts, stock brokers, institutional investors and others in the
      investment community that generate or influence sales volume, and that even
      if
      we came to the attention of such persons, they tend to be risk-averse and would
      be reluctant to follow an unproven company such as ours or purchase or recommend
      the purchase of our shares until such time as we became more seasoned and
      viable. As a consequence, there may be periods of several days or more when
      trading activity in our shares is minimal or non-existent, as compared to a
      seasoned issuer which has a large and steady volume of trading activity that
      will generally support continuous sales without an adverse effect on share
      price. We cannot give you any assurance that a broader or more active public
      trading market for our common stock will develop or be sustained, or that
      current trading levels will be sustained.
The
      market price for Cyber Merchants common stock is particularly volatile given
      our
      status as a relatively small company with a small and thinly traded "float" and
      lack of current revenues that could lead to wide fluctuations in our share
      price. The price at which you convert your Series B Preferred Stock into the
      Company's common stock many be indicative of the price that will prevail in the
      trading market. You may be unable to sell your common stock at or above your
      purchase price if at all, which may result in substantial losses to
      you.
The
      market for Cyber Merchants' common shares is characterized by significant price
      volatility when compared to seasoned issuers, and we expect that our share
      price
      will continue to be more volatile than a seasoned issuer for the indefinite
      future. The volatility in Cyber Merchants' share price is attributable to a
      number of factors. First, as noted above, our common shares are sporadically
      and/or thinly traded. As a consequence of this lack of liquidity, the trading
      of
      relatively small quantities of shares by its shareholders may disproportionately
      influence the price of those shares in either direction. The price for its
      shares could, for example, decline precipitously in the event that a large
      number of our common shares are sold on the market without commensurate demand,
      as compared to a seasoned issuer which could better absorb those sales without
      adverse impact on its share price. Secondly, an investment in Cyber Merchants
      is
      a speculative or "risky" investment due to Cyber Merchants' lack of revenues or
      profits to date and uncertainty of future market acceptance for current and
      potential products. As a consequence of this enhanced risk, more risk-adverse
      investors may, under the fear of losing all or most of their investment in
      the
      event of negative news or lack of progress, be more inclined to sell their
      shares on the market more quickly and at greater discounts than would be the
      case with the stock of a seasoned issuer.
27
Shareholders
      should be aware that, according to SEC Release No. 34-29093, the market for
      penny stocks has suffered in recent years from patterns of fraud and abuse.
      Such
      patterns include (1) control of the market for the security by one or a few
      broker-dealers that are often related to the promoter or issuer; (2)
      manipulation of prices through prearranged matching of purchases and sales
      and
      false and misleading press releases; (3) boiler room practices involving
      high-pressure sales tactics and unrealistic price projections by inexperienced
      sales persons; (4) excessive and undisclosed bid-ask differential and markups
      by
      selling broker-dealers; and (5) the wholesale dumping of the same securities
      by
      promoters and broker-dealers after prices have been manipulated to a desired
      level, along with the resulting inevitable collapse of those prices and with
      consequent investor losses. Our management is aware of the abuses that have
      occurred historically in the penny stock market. Although we do not expect
      to be
      in a position to dictate the behavior of the market or of broker-dealers who
      participate in the market, management will strive within the confines of
      practical limitations to prevent the described patterns from being established
      with respect to our securities. The occurrence of these patterns or practices
      could increase the volatility of our share price.
Other
      than the dividend payments that will be due for the Series B Preferred Stock,
      we
      do not anticipate paying any cash dividends.
Other
      than the dividend payments that will be due for the Series B Preferred Stock,
      we
      presently do not anticipate that we will pay any dividends on any of our capital
      stock in the foreseeable future. The payment of dividends, if any, would be
      contingent upon our revenues and earnings, if any, capital requirements, and
      general financial condition. The payment of any dividends will be within the
      discretion of our Board of Directors. We presently intend to retain all
      earnings, if any, to implement our business plan; accordingly, we do not
      anticipate the declaration of any dividends in the foreseeable future.
28
SELECTED
      CONSOLIDATED FINANCIAL DATA
You
      should read the summary consolidated financial data set forth below in
      conjunction with "
Management's
      Discussion and Analysis of Financial Condition or Plan of
      Operations
"
and
      our
      predecessor's financial statements and the related notes included elsewhere in
      this report. We derived the financial data for the period January 1 through
      June 31, 2006 and as of December 31, 2005 and 2004 from the
      predecessor's financial statements included in this report. The historical
      results are not necessarily indicative of the results to be expected for any
      future period.
Six
                months ended June 30,
Year
                ended December 31,
2006
2005
2005
2004
Net
                sales
$
12,562,004
$
14,489,359
$
24,577,206
$
$22,421,765
Cost
                of sales
(9,077,139
)
(10,469,875
)
(18,441,644
)
(17,763,244
)
Gross
                profit
3,484,865
4,019,484
6,135,562
4,658,521
Administrative
                expenses
(610,325
)
(320,881
)
(739,621
)
(673,973
)
Depreciation
(121,084
)
(100,655
)
(214,534
)
(177,823
)
Selling
                and distributing costs
(198,713
)
(116,179
)
(188,058
)
(405,989
)
Income
                from operations before the following
Items
                and taxes
2,554,743
3,481,769
4,993,349
3,400,736
Professional
                fees for pre-listing exercise
-
-
(320,892
)
-
Reversal
                of commission payable
-
716,575
718,250
-
Other
                income
171,250
200,562
302,903
679,660
Interest
                expenses
(275,486
)
(230,075
)
(520,827
)
(319,693
)
Income
                before income taxes
2,450,507
4,168,831
5,172,783
3,760,703
Income
                taxes
(437,095
)
(729,545
)
(958,022
)
(736,403
)
Net
                income
$
2,013,412
$
3,439,286
$
4,214,761
$
3,024,300
As at December 31,
As at June 30,
2006
2005
2004
Consolidated
                Balance Sheet Data:
Cash
                and Cash Equivalents
$
188,219
$
154,368
$
95,226
Working
                Capital Deficit
994,286
2,838,819
5,692,014
Total
                Assets
28,172,973
24,920,741
22,568,708
Total
                Debt
17,142,293
15,879,322
16,886,198
Total
                Shareholders' Equity
11,030,680
9,041,419
5,682,510
Footnotes
The
      transaction contemplated under the Exchange Agreement (the "
Exchange
")
      is
      deemed to be a reverse acquisition, where Cyber (the legal acquirer) is
      considered the accounting acquiree and Infosmart (the legal acquiree) is
      considered the accounting acquirer. The consolidated financial statements of
      the
      combined entity will in substance be those of Infosmart, with the assets and
      liabilities, and revenues and expenses, of Cyber being included effective from
      the assumed date of August 25, 2005 (date of Cyber's inception) for the
      unaudited pro forma condensed combined statement of operations, and May 31,
      2006
      for the unaudited pro forma condensed combined balance sheet. Cyber is deemed
      to
      be a continuation of the business of Infosmart.
29
The
      unaudited pro forma condensed combined balance sheet as of May 31, 2006 is
      prepared based on the unaudited historical balance sheets of Infosmart of
      June 30, 2006 and the audited historical balance sheet of Cyber as of May
      31, 2006, and includes adjustments which give effect to the Exchange Transaction
      and are computed assuming the transaction was consummated on May 31, 2006.
MANAGEMENT'S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The
      following discussion and analysis of the results of operations and financial
      condition of Infosmart for the three and six months ended June 30, 2006 and
      2005
      and the fiscal years ended December 31, 2005 and 2004 should be read in
      conjunction with Selected Consolidated Financial Data and Infosmart's financial
      statements and the notes to those financial statements that are included
      elsewhere in this Memorandum. Our discussion includes forward-looking statements
      based upon current expectations that involve risks and uncertainties, such
      as
      our plans, objectives, expectations and intentions. Actual results and the
      timing of events could differ materially from those anticipated in these
      forward-looking statements as a result of a number of factors, including those
      set forth under the Risk Factors, Cautionary Notice Regarding Forward-Looking
      Statements and Business sections in this Memorandum. We use words such as
"anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect,"
"believe," "intend," "may," "will," "should," "could," and similar expressions
      to identify forward-looking statements.
Overview
Infosmart
      Group Limited ("Infosmart") was incorporated in the British Virgin Islands on
      August 23, 2005 under the International Business Companies Act, British Virgin
      Islands. Prior to the Re-structuring (as described below) Prime Fortune, a
      British Virgin Islands company ("Prime"), was the sole shareholder of 100% of
      Infosmart's issued capital shares. In August 2006, the board of directors of
      both Prime and Infosmart decided to re-structure certain shareholdings in
      Infosmart, so that after the re-structuring, Prime would no longer own 100%
      of
      Infosmart's issued capital shares and so that Prime Corporate Developments Ltd.
      ("Prime Corporate"), Kwok Chung and Lui Sau Wan would replace Prime as the
      direct owners of 100% of the issued capital shares and equity ownership of
      Infosmart (the "Re-structuring").
Prior
      to
      the Re-structuring, Prime owned 100% of the issued capital shares of Infosmart,
      which consisted on one (1) issued capital share, and Prime's issued capital
      shares were owned as follows: 713 shares held by Prime Corporate, 212 shares
      held by Kwok Chung, and 75 shares held by Lui Sau Wan. On August 11, 2006,
      and
      in connection with the Re-structuring, Prime's board of directors approved
      resolutions for Prime to transfer the one (1) issued capital share of Infosmart
      owned by Prime to Prime shareholder Kwok Chung in exchange for a cash payment
      of
      $1.00 (the "Prime Transfer"), and that pursuant to such resolutions, Prime
      transferred the one Infosmart share to Kwok Chung on August 11, 2006 in exchange
      for the $1.00 cash payment.
Further,
      on August 11, 2006 and concurrent with the Prime Transfer, the Company's Board
      approved resolutions for the issuance of 999 new shares in Infosmart to Prime
      Corporate Developments Limited ("Prime Corporate"), Kwok Chung and Lui Sau Wan,
      as follows: 713 shares to Prime Corporate, 211 shares to Kwok Chung, and 75
      shares to Lui Sau Wan, in exchange for a cash payment by Prime Corporate, Kwok
      Chung and Lui Sau Wan of $1.00 per Infosmart share that each receives (the
      "Infosmart Share Issuance") or an aggregate total payment of $999 for such
      shares. On August 11, 2006, the Company issued the 999 Infosmart shares, in
      amounts as described above, to Prime Corporate, Kwok Chung and Lui Sau Wan
      and,
      in exchange, received the $999 cash payment, pursuant to such
      resolutions.
A
s
      a
      result of and immediately after the Prime Transfer and the Infosmart Share
      Issuance, Prime Corporate, Kwok Chung and Lui Sau Wan became the owners of
      100%
      of the issued capital shares of Infosmart, with each of them owning the same
      number of Infosmart shares as the number of Prime shares that each currently
      owns. Pursuant to a group reorganization completed in October 2005 (the
"Reorganization"), Infosmart is the holding company (directly and indirectly) of
      IS Technology, IS International, IS Media and Infosmart's new Brazilian joint
      venture, Discobras, by the acquisition of 100% of the issued and outstanding
      common stock of IS Technology and IS International. IS Technology wholly owns
      IS
      Media, which, in turn, owns 99.42% of Discobras.
Infosmart
      started in the DVDR manufacturing business with the establishment of IS
      Technology. Founded in Hong Kong in August of 2002, IS Technology was the first
      company in Hong Kong to manufacture recordable digital versatile disks
      ("DVDRs"). With the continual growth in DVDR demand, the initial shareholders of
      IS Technology took in other shareholders to form two other companies, Info
      Smart
      International Enterprises Limited and Infoscience Media Limited, to produce
      DVDRs. These three companies form Infosmart's main operational business.
      Infosmart is a profitable and growing company led by industry veterans and
      is
      one of the world's top producers of DVDRs. Infosmart currently manufactures 8x
      and 16x discs, and is preparing to launch production of new optical storage
      media, namely, writable HD DVD discs. Infosmart currently has customers in
      Western Europe and Australia and plans further expansion into North and South
      America, the Middle East, Africa, Eastern Europe and Russia. To capture the
      lucrative South American market, Infosmart is establishing a sales and
      distribution network and a production facility in Brazil.
30
Critical
      Accounting Policies and Estimates
Our
      management's discussion and analysis of our financial condition and results
      of
      operations are based on our consolidated financial statements, which have been
      prepared in accordance with accounting principles generally accepted in the
      United States. The preparation of these financial statements requires us to
      make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and the disclosure of contingent assets and liabilities at the
      date
      of the financial statements as well as the reported net sales and expenses
      during the reporting periods. On an ongoing basis, we evaluate our estimates
      and
      assumptions. We base our estimates on historical experience and on various
      other
      factors that we believe are reasonable under the circumstances, the results
      of
      which form the basis for making judgments about the carrying value of assets
      and
      liabilities that are not readily apparent from other sources. Actual results
      may
      differ from these estimates under different assumptions or conditions.
While
      our
      significant accounting policies are more fully described in Note 5 to our
      consolidated financial statements appearing at Exhibit 99.2, we believe that
      the
      following accounting policies are the most critical to aid you in fully
      understanding and evaluating
Basis
      of presentation and consolidation
On
      October 20, 2005, Infosmart's Reorganization was completed and accordingly,
      accounting for recapitalization is adopted for the preparation of consolidated
      financial statements. Generally, this means that the consolidated financial
      statements are issued under the name of the legal parent, Infosmart Group
      Limited, but includes the combined financial statements of IS Technology and
      IS
      International. The comparative figures represent their combined financial
      position, the results of operations and cash flows. The accompanying
      consolidated financial statements of Infosmart have been prepared in accordance
      with generally accepted accounting principles in the United States of America.
      The consolidated financial statements include the accounts of Infosmart and
      its
      subsidiaries. All significant inter-company accounts and transactions have
      been
      eliminated in consolidation.
Use
      of
      estimates
In
      preparing of the financial statements in conformity with accounting principles
      generally accepted in the United States of America, management makes estimates
      and assumptions that affect the reported amounts of assets and liabilities
      and
      disclosures of contingent assets and liabilities at the dates of the financial
      statements, as well as the reported amounts of revenues and expenses during
      the
      reporting years. These accounts and estimates include, but are not limited
      to,
      the valuation of accounts receivable, inventories, deferred income taxes and
      the
      estimation on useful lives of plant and machinery. Actual results could differ
      from those estimates.
Cash
      and cash equivalents
Infosmart
      considers all cash and other highly liquid investments with initial maturities
      of three months or less. At December 31, 2005, the Company had $154,368 in
      cash
      and cash equivalents. DVDR production is a capital-intensive business. Most
      of
      the Company's capital lease and bank loans are on a short-term basis. These
      short-term arrangements allow the Company to minimize interest payment but
      at
      the same time kept the Company's net cash flow at a low level. Therefore, even
      though a large amount of cash is collected from sales of goods, a considerable
      portion of the cash is used to pay for leased equipment. The Company has paid
      off $7,537,978 and $4,008,648 of capital lease/bank loans in 2004 and 2005
      respectively. By the beginning of 2006, only 6 machines out of the total of
      44
      machines were leased equipment. With majority of the Company's lease obligations
      completed, the Company's net cash flow is expected to improve in
      2006.
Trade
      receivable
Trade
      receivables are stated at original amount less allowance made for doubtful
      receivables, if any, based on a review of all outstanding amounts at the year
      end. Full allowances for doubtful receivables are made when the receivables
      are
      overdue for 1 year and an allowance is also made when there is objective
      evidence that Infosmart will not be able to collect all amounts due according
      to
      original terms of receivables. Bad debts are written off when identified.
      Infosmart extends unsecured credit to customers in the normal course of business
      and believes all trade receivables in excess of the allowances for doubtful
      receivables to be fully collectible. Infosmart does not accrue interest on
      trade
      accounts receivable. The normal credit terms range from 15 to 60 days. During
      the reporting years, Infosmart had no bad debt experience and, accordingly,
      did
      not make any allowance for doubtful debts.
31
Inventories
Inventories
      are stated at the lower of cost or market. Cost is determined on a first-in,
      first out basis and includes all expenditures incurred in bringing the goods
      to
      the point of sale and putting them in a saleable condition. In assessing the
      ultimate realization of inventories, the management makes judgments as to future
      demand requirements compared to current or committed inventory levels.
      Infosmart's reserve requirements generally increase as the management projected
      demand requirements; decrease due to market conditions, product life cycle
      changes. During the reporting years, Infosmart was not required to make any
      allowance for slow-moving or defective inventories.
Plant
      and equipment
Plant
      and
      equipment are stated at cost less accumulated depreciation. Cost represents
      the
      purchase price of the asset and other costs incurred to bring the asset into
      its
      existing use. Maintenance, repairs and betterments, including replacement of
      minor items, are charged to expense; major additions to physical properties
      are
      capitalized.
Depreciation
      of plant and equipment is provided using the straight-line method over their
      estimated useful lives. The principal annual rates are as follows:
Production
                line and equipment
10%
                with 30% residual value
Others
20%
Effective
      April 1, 2004, the depreciation rate for the production line and equipment
      was
      changed from 20% to 10% with a residual value of 30% on cost. With reference
      to
      a valuation carried out at November 9, 2005 by a major production line and
      equipment supplier, the management considered that the revised depreciation
      method reflected more fairly the expected useful lives of the production line
      and equipment and its resalable value. The effect of a change in an accounting
      estimate is recognized prospectively by including it in consolidated statements
      of operations in 2004 and it increased the results of operations for 2004 by
      approximately $1,650,732.
Impairment
      of long-lived assets
Long-lived
      assets are reviewed for impairment whenever events or changes in circumstances
      indicate that the carrying amount of the assets may not be recoverable.
      Infosmart recognizes impairment of long-lived assets in the event that the
      net
      book values of such assets exceed the future undiscounted cashflows attributable
      to such assets. No impairment of long-lived assets was recognized for any of
      the
      periods presented.
Financial
      instruments
The
      carrying values of Infosmart's financial instruments, including cash and cash
      equivalents, restricted cash, trade and other receivables, deposits, dividend
      payable, trade and other payables approximate their fair values due to the
      short-term maturity of such instruments. The carrying amounts of borrowings
      approximate their fair values because the applicable interest rates approximate
      current market rates.
Foreign
      currency translation
Infosmart
      is exposed to certain foreign currency risk from export sales transactions
      and
      recognized trade receivables as they will affect the future operating results
      of
      Infosmart. Infosmart did not have any hedging activities during the reporting
      period. As the functional currency of Infosmart is HK$, the exchange difference
      on translation to US dollars for reporting purpose is taken to other
      comprehensive income.
32
Income
      taxes
Infosmart
      uses the asset and liability method of accounting for income taxes pursuant
      to
      SFAS No. 109 "Accounting for Income Taxes". Under the asset and liability method
      of SFAS 109, deferred tax assets and liabilities are recognized for the future
      tax consequences attributable to temporary differences between the financial
      statements carrying amounts of existing assets and liabilities and loss
      carryforwards and their respective tax bases. Deferred tax assets and
      liabilities are measured using enacted tax rates expected to apply to taxable
      income in the years in which those temporary differences are expected to be
      recovered or settled.
Revenue
      recognition
Revenue
      from sales of the Infosmart's products is recognized when the significant risks
      and rewards of ownership have been transferred to the buyer at the time of
      delivery and the sales price is fixed or determinable and collection is
      reasonably assured.
Concentrations
      of credit risk
Financial
      instruments that potentially subject Infosmart to significant concentrations
      of
      credit risk consist principally of trade receivables. Infosmart extends credit
      based on an evaluation of the customer's financial condition, generally without
      requiring collateral or other security. Infosmart conducts periodic reviews
      of
      the client's financial conditions and payment practices. Further, Infosmart will
      maintain an allowance for doubtful accounts based on the management's
      expectations on actual losses possibly incurred. Other than set forth below,
      no
      customers represented 10% or more of Infosmart's net sales and trade receivable.
At
      December 31, 2005 and 2004,
customers that
      represented 10% or more of Infosmart's net sales and their trade
      receivables are:
Net
                  sales
Year
                  Ended December 31,
2005
2004
DVD
                  Technology
$
1,592,482
$
3,492,778
ENet
17,164,213
16,188,381
$
18,756,695
$
19,681,159
Trade
                receivables
As
                of December 31,
2005
2004
DVD
                Technology
$
376,160
$
513,912
ENet
1,610,075
699,141
$
1,986,235
$
1,213,053
Recent
      accounting pronouncements
In
      November 2004, the FASB issued SFAS No. 151, "Inventory costs - an amendment of
      ARB No. 43, Chapter 4." ("SFAS 151"). SFAS 151 amends ARB 43, Chapter 4 to
      clarify that "abnormal" amount of idle freight, handling costs and spoilage
      should be recognized as current period charges. SFAS 151 is effective for
      inventory costs incurred during fiscal years beginning after June 15,
      2005.
In
      December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment" ("SFAS
      123R"), which revises SFAS No. 123, "Accounting for Stock Based Compensation",
      and supersedes APB 25. Among other items, SFAS 123R eliminates the use of APB
      25
      and the intrinsic value method of accounting, and requires companies to
      recognize in the financial statements the cost of employee services received
      in
      exchange for awards of equity instruments, based on the grant-date fair value
      of
      those awards. This cost is to be recognized over the period during which an
      employee is required to provide service in exchange for the award (typically
      the
      vesting period). SFAS 123R also requires that benefits associated with tax
      deductions in excess of recognized compensation cost be reported as a financing
      cash inflow, rather than as an operating cash flow as required under current
      literature.
SFAS
      123R
      permits companies to adopt its requirements using either a "modified
      prospective" method, or a "modified retrospective" method.
Under
      the
"modified prospective" method, compensation cost is recognized in the financial
      statements beginning with the effective date, based on the requirements of
      SFAS
      123R for all share-based awards granted or modified after that date, and based
      on the requirements of SFAS 123 for all unvested awards granted prior to the
      effective date of SFAS 123R. Under the "modified retrospective" method, the
      requirements are the same as under the "modified prospective" method, but this
      method also permits entities to restate financial statements of previous periods
      based on pro forma disclosures made in accordance with SFAS 123. Infosmart
      is
      adopting SFAS 123R effective January 1, 2006 using the modified prospective
      method.
33
In
      May
      2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections"
("SFAS 154"), which changes the requirements for the accounting for and
      reporting of a change in accounting principle. The statement requires
      retrospective application to prior period financial statements of changes in
      accounting principle, unless impracticable to do so. It also requires that
      a
      change in the depreciation, amortization, or depletion method for long-lived
      non-financial assets be accounted as a change in accounting estimate, effected
      by a change in accounting principle. Accounting for error corrections and
      accounting estimate changes will continue under the guidance in APB Opinion
      20,
"Accounting Changes", as carried forward in this pronouncement. The statement is
      effective for fiscal years beginning after December 15, 2005.
In
      November 2005, the FASB issued FSP Nos. FAS 115-1 and 124-1, "The Meaning of
      Other-Than-Temporary Impairment and Its Application to Certain Investments."
This FSP addresses the determination as to when an investment is considered
      impaired, whether the impairment is 'other-than-temporary', and the measurement
      of an impairment loss. The investment is impaired if the fair value is less
      than
      cost. The impairment is 'other-than-temporary' for equity securities and debt
      securities that can contractually be prepaid or otherwise settled in such a
      way
      that the investor would not recover substantially all of its cost. If
'other-than-temporary', an impairment loss shall be recognized in earnings equal
      to the difference between the investment's cost and its fair value. The guidance
      in this FSP is effective in reporting periods beginning after December 15,
      2005.
In
      February 2006, the Financial Accounting Standards Board issued SFAS No. 155,
Accounting
      for Certain Hybrid Financial Instruments,
which
      amends SFAS No. 133,
Accounting
      for Derivative Instruments and Hedging Activities
("SFAS
      No. 155"), and SFAS No. 140,
Accounting
      for Transfers and Servicing of Financial Assets and Extinguishments of
      Liabilities
.
      SFAS
      No. 155 simplifies the accounting for certain derivatives embedded in other
      financial instruments by allowing them to be accounted for as a whole if the
      holder elects to account for the whole instrument on a fair value basis. SFAS
      No. 155 also clarifies and amends certain other provisions of SFAS No. 133
      and
      SFAS No. 140. SFAS No. 155 is effective for all financial instruments acquired,
      issued or subject to a remeasurement event occurring in fiscal years beginning
      after September 15, 2006. Earlier adoption is permitted, provided the Company
      has not yet issued financial statements, including for interim periods, for
      that
      fiscal year.
In
      July
      2006, the FASB issued FIN 48 "Accounting for Uncertainty in Income Taxes." This
      interpretation requires that we recognize in our financial statements, the
      impact of a tax position, if that position is more likely than not of being
      sustained on audit, based on the technical merits of the position. The
      provisions of FIN 48 are effective as of the beginning of our 2007 fiscal year,
      with the cumulative effect of the change in accounting principle recorded as
      an
      adjustment to opening retained earnings.
Results
      of Operations
Comparison
      of Years Ended December 31, 2005 and December 31,
      2004.
Net
      Sales
.
Infosmart's
      net sales were $24,577,206 in 2005, an increase of approximately 9.6% on prior
      year sales of $22,421,765. The increase in revenues was driven by a 49% growth
      in manufactured disc revenues to $21,966,222 from $14,736,765. This more than
      offset a 66% decline in sales of purchased discs manufactured by third parties.
      Eighty nine percent of the company's revenues were from sales of manufactured
      discs, up from 66% in 2004. This trend marks a permanent shift in Infosmart's
      operations in favour of sales of own-manufactured discs and in the future the
      company expects sales of purchased discs to be insignificant. Infosmart's
      manufactured discs in 2005 were mostly 8x and 16x DVDRs; 4x DVDR discs were
      largely purchased for resale. In 2004, Infosmart's manufactured product mix was
      largely composed of 4x and 8x DVDRs. The average sale price of the Infosmart's
      manufactured discs in 2005 was 18.1 cents, 14.6% down from 21.2 cents in
      2004.
Cost
      of Sales
.
Cost
      of
      sales increased from $17,763,244 or approximately 79.2% of net sales in fiscal
      2004, to $18,441,644, or approximately 75% of net sales in the same period
      in
      fiscal 2005. The approximately 3.8% increase is primarily attributable to the
      increase in our volume of sales. Unit cost of goods sold ("COGS") fell by 12.9%
      to 13.3 cents per disc, driven by a 20% fall in polycarbonate (PCB) costs during
      2005, from $3.5/kg to $2.8/kg. PCB normally accounts for 50%-60% and 30%-40%
      of
      Infosmart's raw material costs and COGS, respectively. The decrease in the
      overall cost of sales as a percentage of net sales is mainly attributable to
      the
      drop in the cost of purchased discs as a percentage of their sales, from 93.1%
      in 2004 to 87.0% in 2005. This exceeded a modest rise in the cost of
      manufactured discs as a percentage of their sales, from 72.0% in 2004 to 73.6%
      in 2005.
34
Gross
      Profit
.
      Gross
      profit increased approximately 31.7% from $4,658,521 in 2004 to $6,135,562
      in
      2005. This increase in gross profit is due to the Infosmart's reduction of
      rebates offered to customers purchasing high quantities. These rebates were
      originally conceived when market prices of discs were high and became less
      appropriate as they fell during 2005.
Selling
      and Distribution Costs
.
      Selling
      and distribution costs decreased approximately 53.7% from $405,989 in 2004
      to
      $188,058 in 2005. This decrease in selling and distribution costs is primarily
      due to the fall in commission and traveling expenses from approximately total
      of
      $288,000 in 2004 to $53,000 in 2005. In 2004, in order to expand our market
      share and boost sales, higher commission and traveling expenses were incurred.
      In 2005, stronger customer relationships were already established and thus
      those
      expenses were reduced accordingly.
Administrative
      Expenses.
Administrative
      expenses increased approximately 9.7% from $673,973 in 2004 to $739,621 in
      2005.
      This increase in administrative expenses is due to the establishment of IS
      Media
      (Factory 3) and the employment of 10 new administrative personnel.
Net
      Income
.
      Net
      income increased approximately 39.4% from $3,024,300 in 2004 to $4,214,761
      in
      2005. Further, Infosmart's net income margin was 17.1% and 13.5% in 2005 and
      2004, respectively. This increase in net income is due primarily to the rise
      in
      revenues and fall in cost of goods sold and sales, general and administrative
      expenses as a percentage of sales. In addition, the company and its customers
      agreed to cancel potential sales rebates worth $718,250, which had been accrued
      in past years, because these rebates had been agreed, but not paid, in relation
      to selling prices which had subsequently been reduced by the company, and were
      therefore no longer commercially justified. This non-cash reversal exceeded
      $320,892 incurred in professional fees in 2005 in preparation for the reverse
      merger listing.
Comparison
      of Three Month and Six Month Periods Ended June 30, 2006 and June 30,
      2005.
The
      following table sets forth the results of our operations for the periods
      indicated as a percentage of net sales:
Three
                  months ended
June
                  30
Six
                  months ended
June
                  30
2006
%
                of
2005
%
                of
2006
%
                of
2005
%
                of
Unaudited
Revenue
Unaudited
Revenue
Unaudited
Revenue
Unaudited
Revenue
SALES
$
6,330,486
100.00
%
$
8,648,450
100.00
%
$
12,562,004
100.00
%
$
14,489,359
100.00
%
COST
                OF SALES
4,436,765
70.09
%
6,373,868
73.70
%
9,077,139
72.26
%
10,469,875
72.26
%
GROSS
                PROFIT
1,893,721
29.91
%
2,274,582
26.30
%
3,484,865
27.74
%
4,019,484
27.74
%
ADMINISTRATIVE
                EXPENSES
336,784
5.32
%
225,443
2.61
%
610,325
4.86
%
320,881
2.21
%
DEPRECIATION
62,947
0.99
%
51,232
0.59
%
121,084
0.96
%
100,655
0.69
%
SELLING
                AND DISTRIBUTING COSTS
150,426
2.38
%
30,724
0.36
%
198,713
1.58
%
116,179
0.80
%
INCOME
                FROM OPERATIONS
1,343,564
21.22
%
1,967,183
22.74
%
2,554,743
20.34
%
3,481,769
24.04
%
REVERSAL
                OF COMMISSION PAYABLE
-
0.00
%
716,575
8.29
%
-
0.00
%
716,575
4.95
%
OTHER
                INCOME
119,725
1.89
%
69,069
0.80
%
171,250
1.36
%
200,562
1.38
%
INTEREST
                EXPENSES
127,335
2.01
%
162,445
1.88
%
275,486
2.19
%
230,075
1.59
%
INCOME
                BEFORE INCOME TAXES
1,335,954
21.10
%
2,590,382
29.95
%
2,450,507
19.51
%
4,168,831
28.78
%
INCOME
                TAXES
242,048
3.82
%
454,299
5.25
%
437,095
3.48
%
729,545
5.04
%
NET
                INCOME
1,093,906
17.28
%
2,136,083
24.70
%
2,013,412
16.03
%
3,439,286
23.74
%
35
Comparison
      of Three Months Ended June 30, 2006 and 2005
Net
      Sales
.
For
      the
      three months ended June 30, 2006, Infosmart's net sales decreased 26.8% from
      $8,648,450 to $6,330,486 relative to the three months ended June 30, 2005.
      The
      decrease in revenues was driven by the decrease in the average sale price of
      the
      Infosmart's manufactured discs and the shifting of the sales force from Europe
      to Brazil. Another factor is the conversion of one production line to test
      HD-DVD production frequently. It causes the production capacity of the
      production line decreased by 5%.
Cost
      of Sales
.
Cost
      of
      sales decreased from $6,373,868 or approximately 73.7% of net sales for the
      three months ended June 30, 2005, to $4,436,765, or approximately 70.1% of
      net
      sales for the three months ended June 30, 2006, an decrease of 30.4% over the
      same comparable quarters in 2005 and 2006. The decrease in cost of sales was
      driven by the continuing moving downward trend in polycarbonate (PCB) costs
      during 2006. The PCB costs, however, have a lower sensitivity than the sale
      price.
Gross
      Profit
.
      Gross
      profit decreased approximately 16.7% from $2,274,582 for the three months ended
      June 30, 2005 to $1,893,721 for the three months ended June 30, 2006. This
      decrease in gross profit is due to the average sale selling price per disc
      was
      about 10% down from 18.1 cents in 2005.
Selling
      and Distribution Costs
.
      For the
      three months ended June 30, 2006, selling and distribution costs increased
      approximately 389.6% from $30,724 to $150,426 relative to the three months
      ended
      June 30, 2005. This increase in selling and distribution costs
is
      primarily due to the fall in commission and traveling expenses from
      approximately $288,000 in 2004 to $53,000 in 2005. In 2004, in order to expand
      our market share and boost sales, higher commission and traveling expenses
      were
      incurred. In 2005, stronger customer relationships were already established
      and
      thus those expenses were reduced accordingly.
Administrative
      Expenses.
Administrative
      expenses increased approximately 49.4% from $225,443 for the three months ended
      June 30, 2005 to $336,784 for the three months ended June 30, 2005. This
      increase in administrative expenses is due to the establishment of Brazil plant
      and sales office and the employment of new administrative personnel. Further,
      legal and professional fees were continuously paid for listing exercise during
      the period.
Net
      Income
.
      Net
      income decreased approximately 48.8% from $2,136,083 for the three months ended
      June 30, 2006 to $1,093,906 for the three months ended June 30, 2005. Further,
      Infosmart's net income margin was 17.3% and 24.7% in the same comparable
      quarters in 2006 and 2005, respectively. This decrease in net income is due
      primarily to the fall in revenues and increase in general and administrative
      expenses as a percentage of sales. In addition, the company and its customers
      agreed to cancel potential sales rebates worth $716,575, which had been accrued
      in past years, because these rebates had been agreed, but not paid, in relation
      to selling prices which had subsequently been reduced by the company, and were
      therefore no longer commercially justified.
Comparison
      of Six Months Ended June 30, 2006 and 2005
Net
      Sales
.
For
      the
      six months ended June 30, 2006, Infosmart's net sales decreased 13.3% from
      $14,489,359 to $12,562,004 relative to the six months ended June 30, 2005.
      The
      decrease in revenues was driven by the decrease in the average sale price of
      the
      Infosmart's manufactured discs compared with the same quarters in 2005. It
      causes the production capacity of the production line decreased by
      5%.
36
Cost
      of Sales
.
Cost
      of
      sales decreased from $10,469,875 or approximately 72.3% of net sales for the
      six
      months ended June 30, 2005, to $9,077,139, or approximately 72.3% of net sales
      for the six months ended June 30, 2006, an decrease of only 13.3%, as compared
      to a 13.3% decrease in sales over the same comparable quarters in 2005 and
      2006.
      The decrease in cost of sales was driven by the continuing moving downward
      trend
      in polycarbonate (PCB) costs during 2006. The PCB costs, however, have a lower
      sensitivity than the sale price.
Gross
      Profit.
Gross
      profit decreased approximately 13.3% from $ 4,019,484 for the six months ended
      June 30, 2005 to $3,484,865 for the six months ended June 30, 2006. This
      decrease in gross profit is due to the average sale selling price per disc
      was
      about 10% down from 18.1 cents in 2005.
Selling
      and Distribution Costs
.
      For the
      six months ended June 30, 2006, selling and distribution costs increased
      approximately 71.0% from $116,179 to $198,713 relative to the six months ended
      June 30, 2005. This increase in selling and distribution costs
is
      due to
      the promotion of new market in Brazil and its neighbors
.
Administrative
      Expenses.
Administrative
      expenses increased approximately 90.2% from $320,881 for the six months ended
      June 30, 2005 to $610,325 for the six months ended June 30, 2006. This increase
      in administrative expenses is due to the establishment of Brazil plant and
      sales
      office and the employment of new administrative personnel. Further, legal and
      professional fees were continuously paid for listing exercise during the
      period.
Net
      Income
.
      Net
      income decreased approximately 41.5% from $3,439,286 for the six months ended
      June 30, 2005 to $2,013,412 for the six months ended June 30, 2006. Further,
      Infosmart's net income margin was 16.0% and 23.7% in the same comparable
      quarters in 2006 and 2005, respectively. This decrease in net income is due
      primarily to the fall in revenues and increase in general and administrative
      expenses as a percentage of sales. In addition, the company and its customers
      agreed to cancel potential sales rebates worth $716,575, which had been accrued
      in past years, because these rebates had been agreed, but not paid, in relation
      to selling prices which had subsequently been reduced by the company, and were
      therefore no longer commercially justified.
Liquidity
      and Capital Resources
Cash
      Flows
Twelve
      Months ended December 31, 2005
We
      have
      funded our operations through December 31, 2005 primarily through retained
      earnings and borrowings.
Net
      cash
      flow provided by operating activities was $6,825,041 in fiscal 2004 and
      $2,269,328 in fiscal 2005. The reduction of net cash flow in fiscal 2005
      was mainly due to the increase in trade receivables and decrease in trade
      payable as compared to fiscal 2004. Since most of the customers are repeat
      customers, Infosmart gave longer trade terms to those customers who have a
      good
      payment history and who have conducted business with Infosmart for more than
      one
      year. Also, Infosmart had shipped a big Christmas/New Year order to E-Net,
      which
      was worth more than $1.8 million and which was recorded as part of trade
      receivable as of December 31, 2005. Therefore, the trade receivable for fiscal
      2005 was $3,252,678, an increase of $1,388,245 compared to the trade receivable
      of $1,864,433 in fiscal 2004. Another factor contributing to the decrease in
      the
      net cash flow by operating activities was the decrease in trade payable from
      $3,958,980 in fiscal 2004 down to $1,800,984 in fiscal 2005. Material costs
      were
      rising in 2005, but Infosmart purchased in bulk when prices dropped and
      negotiated lower prices from material suppliers by offering shorter payment
      terms. These arrangements also caused a decrease in net cash flow because
      Infosmart was paying suppliers at a much faster rate than in fiscal 2004.
      However, Infosmart was able to secure materials at lower prices in a volatile
      market, thereby minimizing the overall material costs.
Net
      cash
      flow used in investing activities was $3,645,625 for fiscal 2004 and $1,454,531
      in fiscal 2005. Uses of cash flow for investing activities include capital
      expenditures for the acquisition of plant and equipment. The uses of cash flow
      were offset by the sale of certain plant and equipment.
Net
      cash
      flow used in financing activities was $3,443,540 in fiscal 2004 and $756,134
      in
      fiscal 2005. The decrease in net cash flow was mainly due to the decrease in
      repayment of obligations under capital leases. Significant production lines
      and
      equipment were acquired under capital leases in fiscal 2004 and most of the
      leases
'
terms
      were for one year.
37
Six
      Months Ended June 30, 2006
Net
      cash
      flow provided by operating activities was $1,382,470 for the six months ended
      June 30, 2006 and $1,024,112 for the six months ended June 30, 2005. The
      increase of net cash flow provided by operating activities for the six months
      ended June 30, 2006 was mainly due to Infosmart paid significant amount of
      legal
      and professional fees relating to the listing exercise during the six months
      ended June 30, 2005, which was included in prepaid expenses. Another factor
      contributing to the increase in the net cash flow by operating activities was
      the increase in trade payable. Material costs were rising in 2005, but Infosmart
      purchased in bulk when prices dropped and negotiated lower prices from material
      suppliers by offering shorter payment terms. These arrangements also caused
      a
      decrease in net cash flow because Infosmart was paying suppliers at a much
      faster rate. However, Infosmart was able to secure materials at lower prices
      in
      a volatile market, thereby minimizing the overall material costs. During the
      six
      months ended June 30, 2006, the supply of material was more stable and hence,
      Infosmart was not required to settle with suppliers as fast as in 2005. The
      above factors eliminate the effect of the increase in trade
      receivables.
Net
      cash
      flow used in investing activities was $1,385,893 and $226,643 for the six months
      ended June 30, 2006 and 2005 respectively. Uses of cash flow for investing
      activities relate to the capital expenditures for the acquisition of plant
      and
      equipment.
Net
      cash
      flow provided by financing activities was $37,686 for the six months ended
      June
      30, 2006. Compared with the net cash flow used in financing activities of
      $285,899 for the six months ended June 30, 2005, the increase of net cash flow
      was mainly due to the decrease in repayment of obligations under capital leases.
      The capital leases terms were matured during the period ended June 30,
      2006.
Contractual
      Obligations and Off-Balance Sheet Arrangements
Contractual
      Obligations
We
      have
      certain fixed contractual obligations and commitments that include future
      estimated payments. Changes in our business needs, cancellation provisions,
      changing interest rates, and other factors may result in actual payments
      differing from the estimates. We cannot provide certainty regarding the timing
      and amounts of payments. We have presented below a summary of the most
      significant assumptions used in our determination of amounts presented in the
      tables, in order to assist in the review of this information within the context
      of our consolidated financial position, results of operations, and cash flows.
The
      following tables summarize our contractual obligations as of December 31,
      2005
,
      and the
      effect these obligations are expected to have on our liquidity and cash flows
      in
      future periods.
Payments
                Due by Period
Total
Less
                than 1 year
1-3
                Years
3-5
                Years
5
                Years +
In
                Thousands
Contractual
                Obligations
:
Bank
                Indebtedness
$
4,462
$
4,462
—
—
—
Other
                Indebtedness
$
3,747
$
1,997
$
1,604
$
146
—
Capital
                Lease Obligations
$
53
$
53
—
—
—
Operating
                Leases
$
70
$
70
—
—
—
Purchase
                Obligations
—
—
—
—
—
Total
                Contractual Obligations:
$
8,332
$
6,582
$
1,604
$
146
Bank
      indebtedness consists of secured and unsecured borrowings from Infosmart's
      banking facilities including letters of credit, bank overdrafts, and
      non-recurring bank loans.
Other
      indebtedness consists of loans and debt financing from independent third parties
      for working capital and the acquisition of DVDR production lines and
      equipment.
38
Capital
      lease obligations consist of leases for
certain
      production lines and equipment under non-cancelable lease
      agreements.
Operating
      lease amounts include leases for office and factory premises under various
      non-cancelable operating lease agreements that expire at various dates through
      years 2004 to 2006, with an option to renew the lease. All leases are on a
      fixed
      repayment basis. None of the leases includes contingent rentals.
Off-balance
      Sheet Arrangements
A
      bank
      guarantee was given by a bank to a electric utility company on Infosmart's
      behalf. This guarantee exempted Infosmart from the obligation of paying a
      deposit required by the electric utility company. This off-balance sheet
      arrangement has no effect on the Infosmart's liquidity, capital resources,
      market risk support or credit risk support, other than allowing Infosmart to
      retain the HK$1.1 million deposit that would have been required by the utility
      company. Infosmart is not aware of any events, demands, commitments, trends
      or
      uncertainties that will result in of reasonably likely result in the termination
      of this arrangement.
Other
      than the arrangement described above, we have not entered into any other
      financial guarantees or other commitments to guarantee the payment obligations
      of any third parties. We have not entered into any derivative contracts that
      are
      indexed to our shares and classified as shareholder's equity or that are not
      reflected in our consolidated financial statements. Furthermore, we do not
      have
      any retained or contingent interest in assets transferred to an unconsolidated
      entity that serves as credit, liquidity or market risk support to such entity.
      We do not have any variable interest in any unconsolidated entity that provides
      financing, liquidity, market risk or credit support to us or engages in leasing,
      hedging or research and development services with us.
Related
      Party Transactions
For
      a
      description of out related party transactions see the section of the Memorandum
      entitled "Certain Relationships and Related Transactions."
Quantitative
      and Qualitative Disclosures about Market Risk
Infosmart
      does not use derivative financial instruments in its investment portfolio and
      have no foreign exchange contracts. Infosmart's financial instruments consist of
      cash and cash equivalents, trade accounts receivable, accounts payable and
      long-term obligations. Infosmart considers investments in highly liquid
      instruments purchased with a remaining maturity of 90 days or less at the date
      of purchase to be cash equivalents. However, in order to manage the foreign
      exchange risks, Infosmart will engage in hedging activities to manage our
      financial exposure related to currency exchange fluctuation. In these hedging
      activities, we might use fixed-price, forward, futures, financial swaps and
      option contracts traded in the over-the-counter markets or on exchanges, as
      well
      as long-term structured transactions when feasible.
Interest
      Rates
.
      Our
      exposure to market risk for changes in interest rates relates primarily to
      our
      short-term investments and short-term obligations; thus, fluctuations in
      interest rates would not have a material impact on the fair value of these
      securities. At June 30, 2006, Infosmart had approximately $188,219 in cash
      and
      cash equivalents. A hypothetical 10% increase or decrease in interest rates
      would not have a material impact on our earnings or loss, or the fair market
      value or cash flows of these instruments.
Foreign
      Exchange Rates
.
      The
      majority of our revenues derived and expenses and liabilities incurred are
      in
      Hong Kong dollars. Thus, our revenues and operating results may be impacted
      by
      exchange rate fluctuations in the currencies of Hong Kong. We have not tried
      to
      reduce our exposure to exchange rate fluctuations by using hedging transactions.
      However, we may choose to do so in the future. We may not be able to do this
      successfully. Accordingly, we may experience economic losses and negative
      impacts on earnings and equity as a result of foreign exchange rate
      fluctuations. The effect of foreign exchange rate fluctuation during the year
      ended December 31, 2005 was not material to us.
DESCRIPTION
      OF PROPERTY
Hong
      Kong offices and facilities
Our
      main
      offices and manufacturing facilities are located in Hong Kong. The Company
      stores and delivers products from its manufacturing facilities located in Chai
      Wan and Tsuen Wan, New Territories, Hong Kong. Infosmart has placed a high
      priority on operating a safe, clean, and well-maintained distribution facility,
      which is a key selling point for many customers. The Company's prime location
      provides excellent proximity for shipping products to a diverse customer base
      located in all regions of the world.
39
The
      total
      approximate square footage of our facilities is summarized as follows:
Location
Principal
                Activities
Area
                (sq. feet)
Lease
                Expiration Date
Fortune
                Factory Building,
40
                Lee Chung Street
Chai
                Wan, Hong Kong.
Administrative
                offices, Manufacturing facility (Factories 1 & 2)
31,186
                sq. ft.
Lease
                for 7,500 sq. ft. expires December 2006; and
Lease
                for 26,686 sq. ft. expires in December 2007
5/F.,
                QPL Industrial Building, 126-140 Texaco Road,
Tsuen
                Wan, New Territories, Hong Kong
Manufacturing
                facility (Factory 3)
40,000
                sq. ft.
March
                2009 (entered by Infoscience Holdings
                Limited)
The
      Company leases office and factory premises under various non-cancelable
      operating lease agreements that expire at various dates through years 2004
      to
      2006,
with
      an
      option to renew the lease. All leases are on a fixed repayment basis. None
      of
      the leases includes contingent rentals. Minimum future commitments under these
      agreements payable as of December 31, 2005 are as follows:
Year
                ending December 31
2006
$
69,515
Rental
      expense was $518,967 and $158,051 during 2005 and 2004, respectively.
We
      believe that our existing facilities are well maintained and in good operating
      condition.
Brazil
      production facility
In
      the
      first quarter of 2006, Infosmart started the construction of the production
      facility in Brazil. Once the factory with the supporting infrastructure is
      ready, Infosmart will relocate twelve of its existing production lines from
      Factory 1 to Brazil in mid October 2006. Infosmart's Brazilian production
      facility is located in Camaçari, State of Bahia, close to Salvador. The factory
      is approximately 1,800 sq. meters and can accommodate 26 production lines.
      Good
      progress had been made in the construction of the factory. Further, all licenses
      required for the facility have been obtained, an incentive program from the
      State of Bahia had been approved, and the factory and the warehouse have been
      leased. The construction costs for the Brazil factory are currently being
      financed through loans from Infosmart shareholders.
The
      Company also uses a warehouse and the sales office, which are located in São
      Paulo and is where most of the current commercial activities are conducted.
      Both
      the warehouse and the sales office are owned by our local Brazilian partner
      and
      we are not obligated pay rent for using both of these premises. The warehouse
      is
      located at Rua Santa Clara, Brás, while the sales office is located at Rua
      Catumbi, Belém, both in São Paulo.
The
      total
      approximate square footage of our facilities is summarized as follows:
Location
Principal
                Activities
Area
                (sq. feet)
Lease
                Expiration Date
Loteamento
                Poloplast Quadra D lote 5, galpoes C, D, and E, Camacari, State of
                Bahia,
                Brazil - BA, CEP 42801-170
Manufacturing
                facility
25,000
                sq. ft.
March
                31, 2009, with options for renewal.
Rua
                Catumbi, Belem, Sao Paulo, Brazil
Warehouse
15,000
                sq. ft.
None.
Rua
                Santa Clara, No 272/274, Bras, Sao Paulo, Brazil - SP, CEP
                03025-030
Sales
                Office
2,000
                sq. ft.
None.
40
MANAGEMENT
Appointment
      of New Directors
In
      connection with the Exchange Agreement, Cyber appointed four new directors
      to
      its board of directors. Furthermore, concurrent with the closing of the Exchange
      Agreement, Mr. Kevin R. Keating, the former President, Treasurer and
      Secretary of Cyber, resigned from these positions. Immediately following the
      resignation of Mr. Keating, Mr. Kwok Chung ("Andy Kwok") was appointed
      Chief Executive Officer and President, and Ms. Sze Po Nei ("Pauline Sze")
      was appointed Chief Financial Officer, Treasurer and Secretary, respectively,
      of
      Cyber.
The
      following table sets forth the names and ages of our directors and executive
      officers, as of the date of this current report:
Name
Age
Position
Kwok
                Chung ("Andy Kwok")
39
Chief
                Executive Officer, President and Director
Sze
                Po Nei ("Pauline Sze")
33
Chief
                Financial Officer, Treasurer, Secretary and Director
Chang
                Chung Yuen, Andrew ("Andrew Chang")
36
Chairman
                of the Board of Directors
Godwin
                Wong
56
Director
Current
      Management
Andy
      Kwok,
Chief
      Executive Officer, President and Director, has over 12 years experience in
      the
      optical storage media industry. In 1993, he began his international sales career
      with a subsidiary of Sonopress AG, one of the world's top three pre-recorded
      CD/DVD manufacturers, and gained significant experience of the dynamics of
      storage media markets around the world. In 1997, Mr. Kwok co-founded Mega Winner
      (HK), Ltd. ("Mega Winner"), a leading CD manufacturer, before spotting the DVDR
      market opportunity and co-founding Infosmart in 2002. He served as Chairman
      of
      the Hong Kong Optical Disc Manufacturing and Technology Association from 2000
      to
      2002. He received his Bachelor of Mathematics degree from the Chinese University
      of Hong Kong.
Pauline
      Sze,
Chief
      Financial Officer, Treasurer, Secretary, and Director, co-founded InfoSmart
      in
      2002 and oversees its finance, human resources, accounting, purchasing and
      shipping departments. Before joining InfoSmart, she worked with Wing Shing
      Cassette Manufacturing Co. Ltd. between 1996 and 1998 and witnessed the
      evolution of media production from cassette to VCD to DVDR. She established
      her
      own company, Mega Century, with her spouse in 1998 to produce VCDs. Ms. Sze's
      relationship with and ownership in Mega Century were completely terminated
      in
      February 2005. Ms. Sze received her degree in Business Administration from
      the
      British Columbian Institute of Technology in Canada. Ms. Sze is the wife of
      Mr.
      Wong Hiu Ming ("Tony Wong"), who is a non-executive member of the Board of
      Directors of Prime, Infosmart, IS International, IS Technology, and IS Media.
Andrew
      Chang,
Chairman
      of the Board of Directors, is a seasoned entrepreneur. In 1995, he founded
      Hang
      Tat International (HK) Ltd., a telecommunication devices manufacturing business,
      which today employs 1,400 workers and has revenues of $15 million. Hang Tat
      International (HK) Ltd. exports most of its output to the U.S. and its major
      customers include Family Dollar, Best Buy, Circuit City, Southern Telecom and
      jWIN Electronics. Mr. Chang holds a Master of Economics degree from the
      University of Macquaire, Australia and a Bachelor of Commerce degree majoring
      in
      accounting from the University of New South Wales, Australia. Mr. Chang is
      the
      cousin of Mr. Tony Wong, one of InfoSmart's non-executive
      directors.
41
Godwin
      Wong
,
      Director,
has
      been
      on the faculty
of
      the
      Haas School of Business at the University of California, Berkeley for twenty
      years. He was raised
in
      Hong
      Kong and was educated in U.S.A. with Ph.D. from Harvard University, Master's
      from U.C.L.A. and baccalaureate from the University of Wisconsin.
Dr.
      Wong
      serves on the Board of Directors of the United Commercial Bank, other NASDAQ
      companies and certain technology ventures in the San Francisco area and
      overseas, and previously for other California financial institutions. He has
      been advisor/consultant, and specialist/strategist to various organizations,
      corporations, government agencies, business enterprises in the U.S., Canada,
      Europe and Asia. Dr. Wong has been appointed Chief Expert Advisor for the City
      Government of Beijing HaiDian, where the Silicon Valley of China, Zhong Guan
      Cun, is situated. He also serves as director of one of the top ten software
      companies in Shanghai.
He
      has
      assisted companies in the negotiation of businesses transactions, technology
      transfer, mergers and acquisitions. Representing various investment groups,
      he
      has run his own San Francisco management companies in real estate, consulting,
      and investment management with over 35 employees.
He
      speaks, reads and writes fluent Chinese in four dialects.
To
      the
      best of Cyber's knowledge, none of the officers or directors appointed following
      the Closing, including any of their affiliates, currently beneficially own
      any
      equity securities or rights to acquire any securities of Cyber, and no such
      persons have been involved in any transaction with Cyber or any of its
      directors, executive officers or affiliates that is required to be disclosed
      pursuant to the rules and regulations of the SEC, other than with respect to
      the
      transactions that have been described herein. To the best of Cyber's knowledge,
      none of the officers and directors appointed following the Closing have been
      convicted in a criminal proceeding, excluding traffic violations or similar
      misdemeanors, nor have they been a party to any judicial or administrative
      proceeding during the past five years, except for matters that were dismissed
      without sanction or settlement, that resulted in a judgment, decree or final
      order enjoining the person from future violations of, or prohibiting activities
      subject to, federal or state securities laws, or a finding of any violation
      of
      federal or state securities laws.
Mr.
      Andy
      Kwok is a 25% shareholder and director of Mega Winner (Hong Kong), Ltd. ("Mega
      Winner"), a corporation incorporated under the laws of the Hong Kong Special
      Administrative Region of the People's Republic of China which is currently
      subject to a bankruptcy lawsuit filed against it by Media Lab Ltd., an
      Australian company in Hong Kong's High court on February 11, 2004. The court has
      ruled for Mega Winner to be wind-up (Companies Winding-up No. 1360 of 2003).
      A
      Liquidator was appointed on March 1, 2004 to wind-up Mega Winner.
Board
      of Directors
Our
      board
      of directors is currently composed of 4 members, all of whom are Infosmart
      employees and/or directors, except for Godwin Wong. Godwin Wong is an
      independent director designated by KI Equity to serve as a director for the
      one
      year period following Closing ("KI Equity Director"). Andy Kwok, Pauline Sze and
      Andrew Chang (collectively, the "Management Directors") will have the right to
      appoint three persons as independent directors, however, these board positions
      are expected to be filled following the Closing. The Voting Agreement will
      require KI Equity and the Infosmart Shareholders to vote their Cyber shares
      for
      the above director designees.
Mr. Chang
      has been elected as the Chairman of the Board of Directors. In this capacity
      he
      is responsible for meeting with the Chief Executive Officer to review financial
      and operating results, agendas and minutes of board and committee meetings,
      and
      presiding at the meetings of the committees of the board of directors.
The
      Management Directors have the right and intend to review and select additional
      candidates to serve on our board of directors. Currently, only Godwin Wong
      is
"independent," within the meaning of the applicable federal securities laws.
      However, we expect to be able to attract and recruit additional candidates
      to
      serve on our board as independent directors, the timing of which will depend
      on
      the availability and willingness of qualified independent director candidates
      to
      serve in such capacity.
Board
      Committees
As
      of
      this date, our board of directors has not appointed an audit committee or
      compensation committee, however, we are not currently required to have such
      committees. Accordingly, we do not have an "audit committee financial expert" as
      such term is defined in the rules promulgated under the Securities Act of 1933
      and the Securities and Exchange Act of 1934. The functions ordinarily handled
      by
      these committees are currently handled by our entire board of directors. Our
      Board of Directors intends, however, to review our governance structure and
      institute board committees as necessary and advisable in the future, to
      facilitate the management of our business.
42
No
      Code of Ethics
A
      code of
      ethics relates to written standards that are reasonably designed to deter
      wrongdoing and to promote:
·
Honest
                  and ethical conduct, including the ethical handling of actual or
                  apparent
                  conflicts of interest between personal and professional
                  relationships;
·
Full,
                  fair, accurate, timely and understandable disclosure in reports
                  and
                  documents that are filed with, or submitted to, the SEC and in
                  other
                  public communications made by an
                  issuer;
·
Compliance
                  with applicable governmental laws, rules and
                  regulations;
·
The
                  prompt internal reporting of violations of the code to an appropriate
                  person or persons identified in the code;
                  and
·
Accountability
                  for adherence to the code.
Cyber
      has
      not adopted a code of ethics that applies to the Chief Executive Officer and
      Chief Financial Officer because it had no meaningful operations prior to the
      Closing. However, Cyber plans to adopt a code of ethics after the Closing.
Conflicts
      of Interest
Certain
      conflicts of interest existed at May 31, 2006 and may continue to exist between
      Cyber and its officers and directors due to the fact that each has other
      business interests to which they devote their primary attention. Each officer
      and director may continue to do so notwithstanding the fact that management
      time
      should be devoted to the business of Cyber. Certain conflicts of interest may
      exist between Cyber and its management, and conflicts may develop in the future.
      Cyber has not established policies or procedures for the resolution of current
      or potential conflicts of interest between Cyber, its officers and directors
      or
      affiliated entities. There can be no assurance that management will resolve
      all
      conflicts of interest in favor of Cyber, and conflicts of interest may arise
      that can be resolved only through the exercise by management their best judgment
      as may be consistent with their fiduciary duties. Management will try to resolve
      conflicts to the best advantage of all concerned, but there may be times when
      an
      acquisition opportunity is given to another entity to the disadvantage of
      Cyber's stockholders and for which there will be no recourse.
As
      part
      of the Exchange, Cyber engaged Keating Securities, LLC, an affiliate of Keating
      Investments, LLC, the managing member of Cyber's controlling stockholder, to act
      as a financial advisor in connection with the Exchange for which it will earn
      a
      $450,000 advisory fee upon the Closing. Margie L. Blackwell and Luca Toscani
      were directors of Cyber who resigned on the Closing Date in connection with
      Exchange and are each members of Keating Investments, LLC, and Jeff L. Andrews
      was also a director of Cyber, who resigned on the Closing Date in
      connection with the Exchange and is a Vice President of Keating Investments,
      LLC.
Board
      Meetings and Committees
Cyber's
      Board of Directors held five special meetings of directors during the fiscal
      year ended May 31, 2006. In addition, the board of directors took a number
      of
      actions by written consent of all of the directors. Directors may be paid their
      expenses, if any, of attendance at such meeting of the Board of Directors,
      and
      may be paid a fixed sum for attendance at each meeting of the Board of Directors
      or a stated salary as Director. No such payment shall preclude any Director
      from
      serving Cyber in any other capacity and receiving compensation therefore except
      as otherwise provided under applicable law. Except as set forth below, no
      compensation has been paid to the Directors. The Board of Directors may
      designate from among its members an executive committee and one or more other
      committees. No such committees are currently appointed or in place.
Cyber
      is
      not a "listed company" under SEC rules and is therefore not required to have
      a
      compensation committee or a nominating committee. Cyber does not currently
      have
      a compensation committee but it intends to appoint such committee after the
      Closing.
Cyber
      neither has a nominating committee for persons to be proposed as directors
      for
      election to the Board of Directors nor a formal method of communicating nominees
      from shareholders. Cyber does not have any restrictions on shareholder
      nominations under its certificate of incorporation or by-laws. The only
      restrictions are those applicable generally under California law and the federal
      proxy rules. Currently, the entire Board of Directors decides on nominees,
      on
      the recommendation of one or more members of the Board of Directors. Only one
      of
      the members of the Board of Directors, Godwin Wong, is "independent." The Board
      of Directors will consider suggestions from individual shareholders, subject
      to
      evaluation of the person's merits. Stockholders may communicate nominee
      suggestions directly to any of the Board members, accompanied by biographical
      details and a statement of support for the nominees. The suggested nominee
      must
      also provide a statement of consent to being considered for nomination. Although
      there are no formal criteria for nominees, Cyber's Board of Directors believes
      that persons should be actively engaged in business endeavors, have a financial
      background, and be familiar with acquisition strategies and money
      management.
43
The
      Board
      of Directors has not to adopted a formal methodology for communications from
      shareholders but plans to adopt such methodology after the Closing.
Cyber
      does not have a policy regarding the attendance of board members at the annual
      meeting of shareholders. At the last annual meeting of shareholders held May
      16,
      2005, one member of the board was in attendance.
Compensation
      Committee Interlocks and Insider Participation
No
      interlocking relationship exists between our board of directors and the board
      of
      directors or compensation committee of any other company, nor has any
      interlocking relationship existed in the past.
EXECUTIVE
      COMPENSATION
Summary
      of cash and other compensation
The
      following Executive Compensation Chart highlights the compensation for Cyber's
      executive officers. No other executive officers received salary and bonus in
      excess of $100,000 for the prior three fiscal years.
Long
                Term Compensation
Annual
                Compensation
Awards
Payouts
Name
and
Principal
Position
Year
Salary
($)
Bonus
                ($)
Other
Annual
                Compensation ($)
Restricted
Stock
                Award(s)
($)
Securities
Underlying
                Options/
SARs
                (#) (#)
LTIP
Payouts
                ($)
All
                Other
Compensation
($)
Frank
                Yuan (former CEO and President) (1)
2005
2004
2003
$137,500
$150,000
$150,000
$0
$0
$0
$0
$0
$0
$42,943
                (2)
N/A
N/A
N/A
185,000
                (3)
5,000 (4)
N/A
N/A
N/A
N/A
N/A
N/A
Kevin
                R. Keating
(former
                President, Secretary and Treasurer) (5)
2005
2004
2003
$0
$0
$0
$0
$0
$0
$0
$0
$0
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
$12,500
                (6)
N/A
N/A
(1)
Mr.
                Frank Yuan resigned as Cybers' Chairman, Chief Executive Officer,
                President and Chief Financial Officer on September 30, 2005.
(2)
Consists
                of grants of stock options under Cyber's 2001 Stock Option Plan. All the
                stock options were cancelled during fiscal
                2005.
(3)
Consists
                of value of stock bonus consisting of 38,862 shares of Cyber's common
                stock.
(4)
Consists
                of value of stock bonus.
(5)
Kevin
                R. Keating was appointed as Cybers' President, Secretary, Treasurer and
                Director on September 30, 2005. He resigned from such positions at
                the
                Closing.
(6)
On
                October 5, 2005, Cyber issued 250,000 shares of its common stock
                to Kevin
                R. Keating for services rendered to Cyber valued at $12,500, or $0.05
                per
                share.
44
The
      following summary compensation table indicates the cash and non-cash
      compensation earned during the fiscal year ended December 31, 2005 by the
      Chief Executive Officer and each of our other four highest paid executives
      of
      our predecessor, Infosmart, whose total compensation exceeded $100,000 during
      the fiscal year ended December 31, 2005.
Summary
      compensation table
Long
                Term Compensation
Annual
                Compensation
Awards
Payouts
Name
and
Principal
Position
Year
Salary
($)
                (1)
Bonus
                ($)
Other
Annual
                Compensation ($) (1)
Restricted
Stock
                Award(s)
($)
Securities
Underlying
                Options/
SARs
                (#) (#)
LTIP
Payouts
                ($)
All
                Other
Compensation
($)
Andy
                Kwok, CEO and Director
2005
2004
2003
$30,769
$30,769
$12,820
$0
$0
$0
$61,538
$46,153
$19,230
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Pauline
                Sze,
CFO
                and Director
2005
2004
2003
$30,769
$30,769
$ 
                6,410
$0
$0
$0
$46,153
$46,153
$12,820
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
(1)
Salary
                and other annual compensation paid to Mr. Kwok and Ms. Sze are expressed
                in U.S. Dollars based on the interbank exchange rate of 7.75802 Hong
                Kong
                Dollars for each 1.00 U.S. Dollar, on June 1, 2006. Other annual
                compensation consists of a housing allowance that will no longer
                be paid
                to Mr. Kwok and Ms. Sze in 2006.
Director
      Compensation and Stock Option Grants
Prior
      to
      the share exchange transaction, Cyber compensated its directors with stock
      options for their service as directors. Prior stock options granted and vested
      under Cyber's 1996, 1999 and 2001 Stock Option Plans were cancelled during
      fiscal 2005. The value of the stock bonus issued to the directors of Cyber
      effective May 31, 2005 approximated $7,000.
Except
      as
      set forth above, there was no other compensation paid to Frank Yuan, Kevin
      R.
      Keating or any other director of Cyber during the fiscal year ended May 31,
      2006. There were no option grants to Frank Yuan, Kevin R. Keating or any other
      director of Cyber during the fiscal year ended May 31, 2006.
Pursuant
      to an action by Cyber's board on August 24, 2005, Cyber cancelled all
      outstanding stock options granted under Cyber's 1996, 1999 and 2001 Stock Option
      Plans ("Option Plans") and further terminated each of Option Plans. Certain
      option holders agreed to the cancellation of their options, and Frank Yuan
      agreed to assume all obligations of Cyber with respect to options to purchase
      36,025 shares of Cyber's common stock held by certain employees and consultants
      who did not agree to cancel their options.
Effective
      June 22, 2006, the board of directors terminated and discontinued the
      Company's 1998 Incentive Stock Option Plan and 1998 Stock Bonus Plan. The board
      of directors plans to evaluate the Company's need for equity incentive plans,
      and may institute such plans in the future if the board determines they are
      needed for compensation of its officers, directors and employees, or that
      formation of such plans is otherwise in the best interests of the
      Company.
No
      directors of Infosmart received any compensation for their service on
      Infosmart's board. Infosmart, IS International, IS Technology, IS Media and
      Discobras have no stock options issued or outstanding and do not maintain any
      stock option or equity incentive plans.
Employment
      Agreements
The
      following are summaries of Infosmart's employment agreements with its executive
      officers and/or directors which we plan to assume following the Closing of
      the
      Exchange:
Infosmart
entered
      into a Letter of Appointment agreement with Mr. Andy Kwok on June 1, 2006.
      Effective June 1, 2006, Mr. Kwok was appointed Chief Executive Officer and
      Director of InfoSmart and his base monthly salary is HK$60,000 per month or
      approximately US$7,772 per month. Such salary is subject to an annual review
      by
      the Board of Directors ("Board") at a time determined by the Board. Under the
      terms of the agreement, Mr. Kwok is also entitled to receive reimbursements
      for
      all reasonable business, office personnel, company-related entertainment and
      travel expenses that he incurs or he pays for on behalf of the Company.
45
Infosmart
entered
      into a Letter of Appointment agreement with Mr. Andrew Chang on July 1, 2006.
      Effective July 1, 2006, Mr. Chang was appointed Chairman and Director of
      InfoSmart and his base monthly salary is HK$50,000 per month or approximately
      US$6,435 per month. Such salary is subject to an annual review by the Board
      of
      Directors ("Board") at a time determined by the Board. Under the terms of the
      agreement, Mr. Chang is also entitled to receive reimbursements for all
      reasonable business, office personnel, company-related entertainment and travel
      expenses that he incurs or he pays for on behalf of the Company.
Infosmart
entered
      into a Letter of Appointment agreement with Ms. Pauline Sze on June 1, 2006.
      Effective June 1, 2006, Mr. Sze was appointed Chief Financial Officer and
      Director of InfoSmart and his base monthly salary is HK$50,000 per month or
      approximately US$6,435 per month. Such salary is subject to an annual review
      by
      the Board of Directors ("Board") at a time determined by the Board. Under the
      terms of the agreement, Ms. Sze is also entitled to receive reimbursements
      for
      all reasonable business, office personnel, company-related entertainment and
      travel expenses that she incurs or she pays for on behalf of the
      Company.
All
      of
      the above-described Letters of Appointment agreements state the officer and/or
      directors employment may be terminated immediately, without Company prior notice
      or payment in lieu of notice if at any time the officer and or director (1)
      becomes physically or mentally disabled whether totally or partially so that
      he
      is substantially unable to perform his duties for a period of or for 30 days
      in
      the aggregate in any period of six consecutive months, (2) is convicted of
      a
      criminal offense, except one which in the reasonable of the Board does not
      affect his position with the Company at the time of such conviction, (3) commits
      repeated or continued (after warning) any persistent or material breach of
      the
      employment agreement; (4) is guilty of willful neglect in discharging his duties
      or commits any grave misconduct which in the absolute opinion of the Board
      tends
      to bring himself or the Company into disrepute; or (5) commits an act of
      bankruptcy or compounded with his creditors generally or is guilty of conduct
      which would make his continued appointment prejudicial to the interests of
      the
      Company. Further, the agreements provide for employee insurance, mandatory
      provident fund benefits and, after completion of the three-month probation
      period, medical insurance. These agreements also contain restrictive covenants
      preventing competition with Infosmart during their employment and for a period
      of 12 months after termination, and also covenants preventing the use of
      confidential business information, except in connection with the performance
      of
      their duties for the Company, during or at any time after termination of their
      employment.
46
SECURITY
      OWNERSHIP PRIOR TO CHANGE OF CONTROL
The
      following table sets forth certain information regarding Cyber's common stock
      beneficially owned on August 15, 2006
,
      for (i)
      each shareholder Cyber knows to be the beneficial owner of 5% or more of its
      outstanding common stock, (ii) each of Cyber's executive officers and directors,
      and (iii) all executive officers and directors as a group. 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. To the best of Cyber's knowledge, all
      persons named have sole voting and investment power with respect to such shares,
      except as otherwise noted. Except as set forth in this Information Statement,
      there are not any pending or anticipated arrangements that may cause a change
      in
      control of Cyber. At August 15, 2006, 10,119,040 shares of Cyber's common stock
      were outstanding.
Name
Number
                of Shares Beneficially
Owned
Percent
                of Shares
Kevin
                R. Keating
936A
                Beachland Boulevard, Suite 13
Vero
                Beach, Florida 32963
250,000
(1)
2.5
%
KI
                Equity Partners II, LLC
c/o
                Timothy J. Keating, Manager
5251
                DTC Parkway, Suite 1090
Greenwood
                Village, Colorado 80111
8,604,160
(2)
85.0
%
All
                Executive Officers and Directors as a group
250,000
2.5
%
(1)
Kevin
                R. Keating is not affiliated with and has no equity interest in KI
                Equity
                Partners II, LLC ("KI Equity") and disclaims any beneficial interest in
                the shares of Cyber's common stock owned by KI
                Equity.
(2)
Timothy
                J. Keating is the manager of KI Equity and exercises sole voting
                and
                investment control over such shares. KI Equity is not owned by or
                affiliated with Kevin R. Keating and disclaims any beneficial interest
                in
                the shares of Cyber's common stock owned by Kevin R.
                Keating.
SECURITY
      OWNERSHIP AFTER CHANGE OF CONTROL
The
      following table sets forth certain information regarding Cyber's common stock
      beneficially owned on August 16, 2006,
for (i)
      each stockholder known to be the beneficial owner of 5% or more of Cyber's
      outstanding common stock, (ii) each executive officer and director, and (iii)
      all executive officers and directors as a group, on a pro forma basis to reflect
      the transactions contemplated by the Exchange Agreement, assuming the closing
      of
      the Exchange, the issuance of the Gateway Shares, the conversion of the Series
      A
      Preferred Shares received by the Infosmart Shareholders (including HIG) in
      the
      Exchange, and the conversion of the Series B Preferred Shares issued to
      Investors under the Financing based on gross proceeds of $7,650,000
,
      were
      completed as of such date.
Based
      on
 the completion of the Exchange, gross proceeds from the Financing of
      $7,650,000, the issuance of the Gateway Shares, and assuming (i) the conversion
      of the Series A Preferred Shares issued to the Infosmart Shareholders, and
      (ii)
      the conversion of all Series B Preferred Shares issued to Investors under the
      Financing, occurred as of August 16, 2006, Cyber expects to have 159,000,745
      shares of common stock outstanding.
Name
                of Beneficial Owner and Address (1)
Number
                of Shares of Common Stock Beneficially Owned (2)
Percent
                of Shares of Common Stock Beneficially Owned (2)
Andy
                Kwok
23,370,211
14.70
%
Pauline
                Sze
78,598,867
(3)
49.43
%
Andrew
                Chang
0
0
%
Godwin
                Wong
0
0
%
Prime
                Corporate Developments Limited
78,598,867
(4)
49.43
%
Lui
                Sau Wan
8,267,763
(6)
5.20
%
Hamptons
                Investment Group Limited
6,484,519
(7)
4.08
%
KI
                Equity Partners II, LLC
c/o
                Timothy J. Keating, Manager
5251
                DTC Parkway, Suite 1090
Greenwood
                Village, Colorado 80111
8,604,160
(5)
5.41
%
All
                Executive Officers and Directors
as
                a Group (4 persons)
101,969,078
64.13
%
(1)
Unless
                otherwise indicated, the address of the beneficial owner will be
                c/o
                Infosmart Group Limited, is 5th Floor, QPL Industrial Building, 126-140
                Texaco Road, Tsuen Wan, Hong Kong.
47
(2)
The
                amounts of beneficial ownership is based on the completion of the
                Exchange, the completion of the Financing with gross proceeds raised
                of
                $7,650,000, and the issuance of 2,850,000 shares of Cyber's common
                stock
                to Gateway as compensation for consulting services rendered to Cyber
                in
                connection with the Exchange and it also assumes the conversion of
                1,000,000 Series A Preferred Shares issued pursuant to the Exchange,
                in
                which each Series A Preferred Share is converted into 116.721360
                shares of
                Cyber's common stock (116,721,360 shares of common stock on an
                as-converted basis) and the conversion of 1,092,857.143 Series B
                Preferred
                Shares issued pursuant to the Financing, in which each Series B Preferred
                Share is converted into 26.819924 shares of Cyber's common stock
                (29,310,345 shares of common stock on an as-converted basis). Percentage
                of common stock beneficially owned is based on a total of 159,000,745
                shares of Cyber's common stock outstanding as of the Exchange and
                the
                Financing. Figures may vary slightly due to rounding.
(3)
Includes
                78,598,867 shares of Cyber's common stock owned by Prime Corporate
                Developments Limited ("Prime Corporate"). Ms. Pauline Sze is the sole
                owner of Prime Corporate and exercises sole voting and investment
                control
                over such shares.
(4)
Ms.
                Pauline Sze is the sole owner of Prime Corporate and exercises sole
                voting
                and investment control over the shares owned by Prime Corporate.
(5)
Timothy
                J. Keating is the manager of KI Equity Partners II, LLC ("KI Equity"), and
                exercises sole voting and investment control over such
                shares.
(6)
Ms.
                Lui Sau Wan's address is No. 188, Victoria Road, Hong
                Kong.
(7)
Shares
                were issued to Hamptons Investment Group for its services as a finder
                in
                connection with the Exchange transaction. Their address is Unit 3,
                25/F,
                Global Gateway (Hong Kong), 98 Wang Lung Street, Tsuen Wan, Hong
                Kong.
CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS
CYBER
Cyber
      had
      a revolving $500,000 line of credit with Frank Yuan and his spouse, Vicky Yuan.
      The line of credit bears interest at 8% per annum and expires on February 2006.
      The line of credit has been terminated and Cyber's obligations thereunder were
      assumed by ASAP Show, Inc.
Pursuant
      to certain Stock Option Assumption Agreement entered into between Cyber and
      Frank Yuan as of May 31, 2005 ("Option Assumption Agreement"), Frank Yuan, the
      former CEO of Cyber agreed to assume all obligations of Cyber with respect
      to
      options to purchase 36,025 shares of Cyber Common Stock held by certain
      employees and consultants. In connection with the Option Assumption Agreement,
      Yuan delivered a certificate representing 36,025 shares of Cyber Common Stock,
      which shares may be cancelled to the extent Yuan fails to deliver shares to
      such
      holders upon exercise.
A
      certain
      Amended and Restated Securities Purchase Agreement ("SPA") by and among KI
      Equity, Cyber and Frank Yuan ("Yuan") dated August 25, 2005, pursuant to Section
      7.2 thereof Yuan has agreed to indemnify KI Equity and Cyber for certain claims
      and liabilities arising prior to the closing of the Amended SPA for a limited
      time.
A
      certain
      Transfer and Assumption Agreement dated May 31, 2005 ("Assumption Agreement") by
      and among Cyber, Yuan and ASAP Show, Inc. ("ASAP"), a then wholly owned
      subsidiary of Cyber, under which Cyber transferred all of its Assets (as defined
      therein) to ASAP and ASAP assumed all of Cyber's liabilities ("Assumed
      Liabilities"). Under Section 5 of the Assumption Agreement, ASAP and Yuan agreed
      to indemnify Cyber for any claims and liabilities relating to the Assumed
      Liabilities. Further, pursuant to Section 3 of the Assumption Agreement, an
      indemnity reserve for $50,000 ("Indemnity Escrow") was established to satisfy
      any claims that may arise for indemnity under the Amended SPA or the Assumption
      Agreement. Cyber has retained the Indemnity Escrow beyond the six month period
      after the closing of the Amended SPA pending the resolution of the Preference
      Action discussed below.
48
On
      March
      7, 2006, a complaint was filed against Cyber in a Chapter 7 bankruptcy
      proceeding in U.S. Bankruptcy Court in the District of Delaware in the matter
      captioned
In
      Re:
      Factory 2-U Stores, Inc.
("Preference Action"). The complaint seeks to recover from Cyber $91,572 in
      alleged preferential transfers made to Cyber by the debtor during the ninety-day
      period prior to the filing of the debtor's bankruptcy petition. Cyber intends to
      defend against such preference claim by asserting that such transfers were
      made
      in the ordinary course of business and such other available defenses. Cyber
      filed its answer to the compliant on or about April 20, 2006. To the extent
      Cyber incurs any losses, costs or damages with respect to the preference claim,
      including attorneys' fees and related costs, Cyber believes it may recover such
      losses, costs and damages from Frank Yuan and ASAP pursuant to the
      indemnification provisions under the Assumption Agreement and/or Amended SPA.
      Cyber has informed Frank Yuan and ASAP that it intends to seek indemnification
      from them with respect to the preference claim. Further, the Company has
      informed Frank Yuan and ASAP that the $50,000 reserve originally due to be
      paid
      March 30, 2006 under the terms of the Assumption Agreement will be retained
      by
      Cyber until this preference claim is resolved to satisfy any potential indemnity
      claims.
Effective
      October 5, 2005, Cyber entered into a contract with Vero Management, L.L.C.
      ("Vero") for managerial and administrative services, which contract was amended
      effective November 1, 2005. Vero has not been engaged to provide, and Vero
      does
      not render, legal, accounting, auditing, investment banking or capital formation
      services. Kevin R. Keating, a director of Cyber, is the manager of Vero. The
      term of the contract is for one year, but the contract may be terminated at
      any
      time. In consideration of the services provided, Vero is paid $2,500 for each
      month in which services are rendered. Cyber's contract with Vero was terminated
      effective at the Closing of the Exchange.
Kevin
      R.
      Keating was the sole officer and a director of Cyber prior to the closing of
      the
      Exchange. 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 is the majority stockholder of Cyber, Keating
      Securities, LLC, the registered broker-dealer affiliate of Keating Investments,
      LLC, and KAMS. Kevin R. Keating is not affiliated with and has no equity
      interest in Keating Investments, LLC, KI Equity, KAMS or Keating Securities,
      LLC
      and disclaims any beneficial interest in the shares of Cyber's common stock
      owned by KI Equity. Similarly, Keating Investments, LLC, KI Equity, KAMS and
      Keating Securities, LLC disclaim any beneficial interest in the shares of
      Cyber's common stock currently owned by Kevin R. Keating. Mr. Keating is also
      the manager and sole member of Vero Management, LLC, which had a management
      agreement with Cyber that terminated effective as of the Closing.
Margie
      L.
      Blackwell, Luca Toscani and Jeff L. Andrews are directors of Cyber. Margie
      L.
      Blackwell and Luca Toscani are each members of Keating Investments, LLC, and
      Jeff L. Andrews is a Vice President of Keating Investments, LLC.
At
      the
      Closing, pursuant to the terms of the Exchange Agreement, Cyber entered into
      financial advisory agreement with Keating Securities, LLC ("Keating
      Securities"), a registered broker-dealer, under which Keating Securities was
      compensated by Cyber for its advisory services rendered to Cyber in connection
      with the Exchange. The transaction advisory fee was $450,000. This fee was
      paid
      at the Closing of the Exchange.
At
      the
      Closing, pursuant to the terms of the Exchange Agreement, Cyber also entered
      into an aftermarket support agreement between Cyber and Keating Aftermarket
      Support, LLC ("KAMS"), with such terms and conditions as mutually acceptable to
      Infosmart, Cyber and KAMS. Pursuant to this agreement, the parties agreed that:
      (i) KAMS shall provide after market support services to Cyber for a period
      of
      one year after the Closing of the Combination with the monthly retainer to
      be
      paid to KAMS for such services being $12,500, (ii) Cyber shall engage a
      qualified research firm approved by KAMS to issue an independent research report
      and provide research coverage on Cyber following the Closing, with Cyber being
      responsible for paying an estimated total cost of $35,000 for an initial
      independent research report and three subsequent quarterly reports thereafter,
      and (iii) Cyber agreed to allocate a $400,000 annual budget for third party
      aftermarket support and investor relations services for the one year period
      after Closing.
Other
      than the above transactions or otherwise set forth in this Form 8-K Current
      Report or in any reports filed by Cyber with the SEC, Cyber has not entered
      into
      any material transactions with any director, executive officer, and nominee
      for
      director, beneficial owner of five percent or more of its common stock, or
      family members of such persons. Cyber is not a subsidiary of any
      company.
49
INFOSMART
      GROUP
The
      related transactions of our predecessor's officers, directors and/or 5%
      Infosmart shareholders are as follow:
Advances
      from Related Parties
Advances
      from certain related parties to Infosmart's working capital are as
      follows:
As
                of December 31,
2005
2004
External
                Scene
$
-
$
129,000
Tech
                Power Resources Company, which is controlled by minority interest,
                Ms. Li
                Woon Che (before the Reorganization) of ISTL
-
96,448
Mega
                Century
-
$
490,549
Prime
                Corporate
2,217,054
906,209
Rise
                Tech
-
154,317
Andy
                Kwok
-
384,961
Tony
                Wong
-
1,189,370
$
2,217,054
$
3,350,854
The
      above
      advances are interest-free, unsecured and all of the related parties have
      undertaken not to demand repayment in the next twelve months. As of December
      31,
      2005, the amounts originally due to Tony Wong, Eternal Scene and Pauline Sze,
      which amounted to $3,870, $129,000 and $1,707,348, respectively, were assigned
      to Prime Corporate pursuant to consent letters dated the same date.
Related
      Party Material Transactions
Infosmart's
      material transactions with related parties during the years ended December
      31,
      2005 and 2004 included:
Year
                ended December 31,
2005
2004
Sales
                of raw materials to Mega Century at costs actual incurred
$
29,197
$
499,217
Purchases
                of finished goods from Mega Century at
market
                prices
24,667
1,292,156
Sales
                of finished goods to Mega Century at market
Prices
-
26,040
Factory
                rentals received from Mega Century at market rentals
2,572
17,873
Machinery
                rentals received from Mega Century at
market
                rentals
-
481,500
Quarters
                rentals paid to Eternal Scene at market rentals
-
$
62,274
Mega
      Century Limited, a Hong Kong company ("Mega Century"), is a company formerly
      controlled by Ms. Pauline Sze. However, only the transactions with Mega Century
      up to February 7, 2005 are regarded as related party transactions as the
      management considers that Mega Century was no longer a related party following
      the transfer of entire interest in Mega Century by Ms. Sze and her family
      members.
Reorganization
      Related Transactions
On
      October 20, 2005, Infosmart and its subsidiaries (including IS Technology,
      IS
      International and IS Media ("IML")) reorganized their corporate structure (the
"Infosmart Reorganization").
50
Immediately
      before the Reorganization, the 20,000 fully-paid issued and outstanding shares
      of IS Technology were held as follows: (a) 14,255 shares held by Eternal Scene
      International Limited ("Eternal Scene") (an entity controlled by Infosmart CFO
      and Director Sze Po Nei ("Pauline Sze")); (b) 4,245 shares held by Infosmart CEO
      and Director Mr. Kwok Chung ("Andy Kwok") and (c) 1,500 shares held in trust by
      Ms. Li Woon Che ("Ms. Li") for the benefit of Ms. Lui Sau Wan ("Ms. Lui"),
      representing approximately 71.3%, 21.2% and 7.5% of the entire issued common
      stock of ISTL, respectively. On October 19, 2005, IS Technology increased its
      authorized share capital to 5,000,000 shares.
In
      connection with the Reorganization, on October 20, 2005, Prime Corporate
      Developments Limited ("Prime Corporate"), a company solely owned and controlled
      by Pauline Sze, converted $617,287 (equivalent to HK$4,800,000) in outstanding
      loans to IS Technology into 4,800,000 shares of IS Technology's voting common
      stock, par value $0.13 (equivalent to HK$1) per share. Prime Corporate then
      directed IS Technology to issue 4,799,999 IS Technology shares to Infosmart
      and
      one (1) IS Technology share to be held in trust by Mr. Wong Hiu Ming ("Tony
      Wong") for the benefit of Prime Corporate, the husband of Pauline Sze, instead
      of issuing such shares to Prime Corporate.
Further,
      following the conversion, Infosmart also acquired the remaining 20,000
      outstanding and issued shares of IS Technology stock as follows:
1.
Infosmart
                  acquired the 14,255 IS Technology shares previously held by Eternal
                  Scene
                  in exchange for a cash payment of HK$14,255 or approximately
                  US$1,827.
2.
Mr.
                Kwok agreed to transfer his 4,245 IS Technology shares to Infosmart
                in
                exchange for an issuance to him by Infosmart of 43 shares of Infosmart
                stock. After transferring his 4,245 IS Technology shares to Infosmart,
                Mr.
                Kwok then assigned his right to receive the 43 Infosmart shares to
                Prime
                Fortune Enterprises Limited ("Prime"). All of the 1,000 fully-paid issued
                and outstanding shares of Prime's stock are held as follows: 713
                shares by Prime Corporate, 212 shares by Mr. Kwok, and 75 shares
                by Ms.
                Lui.
3.
Ms.
                Li, who held the 1,500 IS Technology shares in trust for the benefit
                of
                Ms. Lui, agreed to transfer 1,500 IS Technology shares in exchange
                for an
                issuance to her by Infosmart of 15 shares of Infosmart stock. After
                transferring the 1,500 IS Technology shares to Infosmart, Ms. Li
                then
                waived
her
                right to receive the 15 Infosmart
                shares.
Immediately
      before the Reorganization, the 200 fully-paid issued shares of IS International
      were held as follows: (a) 161 shares by Prime Corporate Developments Limited
      ("Prime Corporate"), an entity controlled by Infosmart CFO and Director Pauline
      Sze, Prime Corporate's sole shareholder; (b) 24 shares by Rise Tech Holdings
      Limited ("Rise Tech"); and (c) 15 shares held in trust by Ms. Li for the benefit
      of Ms. Lui, representing 80.5%, 12.0% and 7.5% of the entire issued common
      stock
      of IS International. Infosmart acquired all 200 issued and outstanding shares
      of
      IS Technology stock as follows:
1.
Prime
                Corporate agreed to transfer its 161 IS International shares to Infosmart
                in exchange for an issuance to Prime Corporate by Infosmart of 161
                shares
                of Infosmart stock to Prime Corporate (including an issuance of one
                (1)
                share to Tony Wong, to hold in trust for the benefit of Prime Corporate).
                After transferring its 161 IS Technology shares to Infosmart, Prime
                Corporate then assigned its right to receive the 161 Infosmart shares
                to
                Prime.
2.
Rise
                Tech agreed to transfer its 24 IS International shares to Infosmart
                in
                exchange for an issuance to Rise Tech by Infosmart of 24 shares of
                Infosmart stock. After transferring its 24 IS Technology shares to
                Infosmart, Rise Tech then waived its right to receive the 24 Infosmart
                shares.
3.
Ms.
                Li, who held the 15 IS International shares in trust for the benefit
                of
                Ms. Lui, agreed to transfer 15 IS International shares in exchange
                for an
                issuance to Ms. Li by Infosmart of 15 shares of Infosmart stock.
                After
                transferring the 15 IS Technology shares to Infosmart, Ms. Li then
                assigned
her
                right to receive the 15 Infosmart shares to
                Prime.
Thus,
      after the Reorganization, Infosmart beneficially owns all 4,820,000 shares
      of
      issued and outstanding shares IS Technology stock, and all 200 shares of issued
      and outstanding shares IS International stock. IS Technology owns all of the
      issued and outstanding shares of IS Media's stock.
51
Further,
      as described above, the following persons assigned the rights to receive a
      total
      of 219 Infosmart shares to Prime, as follows: (1) Mr. Kwok, 43 shares; (2)
      Ms.
      Li, 15 shares; and (3) Prime Corporate, 161 shares. Rather than being issued
      the
      219 Infosmart shares, Prime agreed to waive its rights to all 219 Infosmart
      shares in exchange for the issuance of one (1) share of Infosmart stock, which
      is the only issued and outstanding share of Infosmart stock. Thus, following
      the
      Infosmart Reorganization, Prime became the owner of 100% of the voting power
      in
      Infosmart.
Re-structuring
      Related Transactions
In
      August
      2006, the board of directors of both Prime and Infosmart decided to re-structure
      certain shareholdings in Infosmart, so that after the re-structuring, Prime
      would no longer own 100% of Infosmart's issued capital shares and so that Prime
      Corporate, Kwok Chung and Lui Sau Wan would replace Prime as the direct owners
      of 100% of the issued capital shares and equity ownership of Infosmart (the
      "Re-structuring").
Prior
      to
      the Re-structuring, Prime owned 100% of the issued capital shares of Infosmart,
      which consisted on one (1) issued capital share, and Prime's issued capital
      shares were owned as follows: 713 shares held by Prime Corporate, 212 shares
      held by Kwok Chung, and 75 shares held by Lui Sau Wan. On August 11, 2006,
      and
      in connection with the Re-structuring, Prime's board of directors approved
      resolutions for Prime to transfer the one (1) issued capital share of Infosmart
      owned by Prime to Prime shareholder Kwok Chung in exchange for a cash payment
      of
      $1.00 (the "Prime Transfer"), and that pursuant to such resolutions, Prime
      transferred the one Infosmart share to Kwok Chung on August 11, 2006 in exchange
      for the $1.00 cash payment.
Further,
      on August 11, 2006 and concurrent with the Prime Transfer, the Company's Board
      approved resolutions for the issuance of 999 new shares in Infosmart to Prime
      Corporate Developments Limited ("Prime Corporate"), Kwok Chung and Lui Sau Wan,
      as follows: 713 shares to Prime Corporate, 211 shares to Kwok Chung, and 75
      shares to Lui Sau Wan, in exchange for a cash payment by Prime Corporate, Kwok
      Chung and Lui Sau Wan of $1.00 per Infosmart share that each receives (the
      "Infosmart Share Issuance") or an aggregate total payment of $999 for such
      shares, and that on August 11, 2006, the Company issued the 999 Infosmart
      shares, in amounts as described above, to Prime Corporate, Kwok Chung and Lui
      Sau Wan and, in exchange, received the $999 cash payment, pursuant to such
      resolutions.
A
s
      a
      result of and immediately after the Prime Transfer and the Infosmart Share
      Issuance, Prime Corporate, Kwok Chung and Lui Sau Wan became the owners of
      100%
      of the issued capital shares of Infosmart, with each of them owning the same
      number of Infosmart shares as the number of Prime shares that each currently
      owns.
Other
      Related Transactions
For
      the
      period December 31, 2005 through the Closing of the Exchange Agreement, Prime
      Corporate Developments Limited, an Infosmart and Cyber shareholder and a related
      entity solely owned by Infosmart's CFO and Director Ms. Pauline Sze, has loaned
      approximately $384,615 to Infosmart in connection with the construction of
      the
      Discobras manufacturing facility in Brazil.
Pursuant
      to the Exchange Agreement, as amended on August 16, 2006, immediately prior
      to
      the Closing of the Exchange, Infosmart issued 58.82 shares of the its capital
      stock to Hamptons Investment Group, Ltd. ("HIG") (which will convert into
      approximately 6,484,519 of Cyber's common stock upon Mandatory Conversion of the
      Series A Preferred Shares, as described above) for services provided as a finder
      in connection with the Exchange.
DESCRIPTION
      OF SECURITIES
Cyber
      is
      presently authorized under its Articles of Incorporation to issue 40,000,000
      shares of common stock, no par value per share, and 10,000,000 shares of
      preferred stock, no par value per share. Of the 10,000,000 shares of preferred
      stock authorized, 1,200,000 shares were designated as Series A Convertible
      Preferred Stock and 1,800,000 shares were designated as Series B Convertible
      Preferred Stock pursuant to Certificates of Determination ("Certificates of
      Determination") that were approved by Cyber's board of directors, and filed
      with
      and accepted by, the Secretary of State of the State of California prior to
      the
      Closing of the exchange transaction. Further, pursuant to the Exchange
      Agreement, Cyber issued 2,850,000 shares of Cyber's common stock to Worldwide
      Gateway Co., Ltd. ("Gateway") immediately prior to the Closing for Gateway's
      services as a consultant to Cyber connection with the Exchange ("Gateway
      Shares"). Thus, as of the Closing, and after the completion of the Financing,
      Cyber had 12,969,040 shares of common stock issued and outstanding, 1,000,000
      shares of Series A Preferred Stock issued and outstanding, and 1,092,857.143
shares
      of
      Series B Preferred Stock issued and outstanding. Following the closing of the
      exchange transaction and upon approval by the majority of Cyber's stockholders
      (voting together on an as-converted-to-common-stock basis) of an increase in
      the
      number of Cyber's authorized shares of common stock, the Company will file an
      amendment to its articles of incorporation to increase in the number of
      authorized shares of Cyber's common stock from 40,000,000 shares to 300,000,000
      shares.
52
The
      following descriptions of Cybers' capital stock are only summaries and do not
      purport to be complete and is subject to and qualified by its Articles of
      Incorporation, as amended, its By-laws, the Certificates of Determination and
      by
      the provisions of applicable corporate laws of the State of California. The
      descriptions of the common stock and preferred stock, as well as warrants to
      purchase our common stock, reflect changes to our capital structure that
      occurred immediately prior to or upon the closing of this Exchange and the
      Financing:
COMMON
      STOCK
The
      holders of Cyber Merchants' common stock are entitled to one vote for each share
      held of record on all matters submitted to a vote of the stockholders, except
      that upon giving the legally required notice, stockholders may cumulate their
      shares in the election of directors. Cyber Merchants may pay dividends at such
      time and to the extent declared by the Board of Directors in accordance with
      California corporate law. Cyber Merchants' common stock has no preemptive or
      other subscription rights, and there are no conversion rights or redemption
      or
      sinking fund provisions with respect to such shares. All outstanding shares
      of
      common stock are fully paid and non-assessable. To the extent that additional
      shares of common stock may be issued in the future, the relative interests
      of
      the then existing stockholders may be diluted.
PREFERRED
      STOCK
Cyber
      Merchants' preferred stock may be divided into such number of series as the
      Board of Directors may determine. The Board of Directors is authorized to
      determine and alter the rights, preferences, privileges, and restrictions
      granted to or imposed upon any wholly unissued series of preferred shares,
      and
      to fix the number of shares and the designation of any series of preferred
      shares. The Board of Directors may increase or decrease (but not below the
      number of shares of such series then outstanding) the number of shares of any
      wholly unissued series subsequent to the issue of those shares. The rights
      of
      the holders of common stock will be subject to and may be adversely affected
      by
      the rights of the holders of any preferred stock that may be issued in the
      future. Issuance of a new series of preferred stock could make it more difficult
      for a third party to acquire, or discourage a third party from acquiring, the
      outstanding shares of common stock and make removal of the Board of Directors
      more difficult. No shares of preferred stock are currently issued and
      outstanding, and we have no present plans to issue any shares of preferred
      stock.
Series
      A Convertible Preferred Stock
The
      following is a summary of the preferences and rights contained in the
      Certificate of Determination (the "Series A Certificate") of the Series A
      Convertible Preferred Stock ("Series A Preferred Stock") and is qualified in its
      entirety by reference to such Certificate, which is attached hereto as Exhibit
      3.3. Capitalized terms not otherwise defined herein have the respective meanings
      set forth in the Series A Certificate.
Stated
      Value
Each
      share of Series A Preferred Stock will have a stated value of $0.0001 per share
      ("Series A Stated Value").
Dividends
Holders
      of Series A Preferred Stock (the "Series A Holders") will not be entitled to
      dividends unless the Company pays cash dividends or dividends in other property
      to holders of outstanding shares of Common Stock, in which event, each
      outstanding share of the Series A Preferred Stock will be entitled to receive
      dividends of cash or property in an amount or value equal to the Conversion
      Rate
      multiplied by the amount paid in respect of one share of Common Stock. Any
      dividend payable to the Series A Preferred Stock will have the same record
      and
      payment date and terms as the dividend is payable on the Common Stock.
Liquidation
      Preference
The
      Series A Preferred Stock shall have a liquidation preference equal to $0.0001
      per share.
53
Adjustments
      to Conversion Rate and Reorganization
The
      Conversion Rate for the number of shares of Common Stock into which the Series
      A
      Preferred Stock shall be converted on a Mandatory Conversion shall be subject
      to
      adjustment from time to time
to
      reflect any stock splits, stock dividends, consolidations, reverse splits,
      combinations or reclassifications of shares of Common Stock or similar
      events.
In case
      of any reclassification or reorganization of the outstanding shares of Common
      Stock which solely affects the par value of the shares of Common Stock, or
      in
      the case of any merger or consolidation of the Company with or into another
      corporation (other than a consolidation or merger in which the Company is the
      continuing corporation and which does not result in any reclassification or
      reorganization of the outstanding shares of Common Stock), or in the case of
      any
      sale or conveyance to another corporation or entity of the property of the
      Company as an entirety or substantially as an entirety in connection with which
      the Company is dissolved, the Series A Holders shall have the right thereafter
      (until the Mandatory Conversion or its equivalent) to receive upon the
      conversion of the Series A Preferred Stock the kind and amount of shares of
      stock or other securities or property (including cash) receivable upon such
      reclassification, reorganization, merger or consolidation, or upon a dissolution
      following any such sale or other transfer, by a holder of the number of shares
      of Common Stock into which the Series A Preferred Stock is convertible
      immediately prior to such event; and if any reclassification also results in
      a
      change in shares of Common Stock, then such adjustment also shall be
      made.
Conversion
      Rights
Mandatory
      Conversion
At
      such
      time as the Company files an amendment to its Articles of Incorporation
      ("Amendment") with California's Secretary of State increasing the authorized
      number of shares of Common Stock from 40,000,000 to 300,000,000 so that the
      Company has a sufficient number of authorized and unissued shares of Common
      Stock so as to permit the conversion of all outstanding shares of the Series
      A
      Preferred Stock, then upon the filing and acceptance of the Amendment, whether
      by amendment or restatement, all the outstanding shares of Series A Preferred
      Stock will immediately and automatically convert into shares of the Company's
      Common Stock without any notice or action required on the part of the Company
      or
      the holder ("Mandatory Conversion"). On a Mandatory Conversion, the holders of
      Series A Preferred Stock will be entitled to receive Common Stock at the
      conversion rate of 116.721360 shares of fully paid and non-assessable Common
      Stock for one (1) share of Series A Preferred Stock ("Conversion
      Rate").
Redemption
      Rights
The
      Series A Preferred Stock does not have any redemption rights.
Voting
      Rights
The
      holders of record of shares of Series A Preferred Stock shall be entitled to
      the
      following voting rights: (a) those voting rights required by applicable law
      and
as
      described in the paragraph under "Protective Provisions" below; (b) the right to
      vote together with the holders of the Common Stock, as a single class, upon
      all
      matters submitted to holders of Common Stock for a vote
,
      with
      e
ach
      share
      of Series A Preferred Stock being entitled to a number of votes equal to the
      number of shares of Common Stock issuable in a Mandatory Conversion based on
      the
      then applicable Conversion Rate; (c) w
henever
      holders of Series A Preferred Stock are required or permitted to take any action
      by vote, such action may be taken without a meeting on written consent, setting
      forth the action so taken and signed by the holders of the outstanding capital
      stock of the Company having not less than the minimum number of votes that
      would
      be necessary to authorize or take such action at a meeting at which all such
      shares entitled to vote thereon were present and voted, with each share of
      the
      Series A Preferred Stock entitling the Series A Holder thereof to one vote
      on
      all matters to be voted on by the Series A Holders as set forth in this section
      (c).
Protective
      Provisions
So
      long
      as any shares of Series A Preferred Stock are outstanding, the Company shall
      not
      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 shares of
      Series A Preferred Stock, voting as a separate class: (a) create (by
      reclassification or otherwise) any new class or series of shares having rights,
      preferences or privileges equal or senior to the Series A Preferred Stock,
      other
      than the shares of Series B Preferred Stock (such Series B Preferred Stock
      having been created by a certificate of determination to be filed within five
      (5) business days after the filing of the
Series
      A
Certificate;
      (b) directly or indirectly, alter or change the rights, preferences or
      privileges of the Series A Preferred Stock; (c) amend the Company's Articles of
      Incorporation in a manner that materially adversely affects the rights,
      preferences or privileges of the holders of the Series A Preferred Stock; (d)
      increase or decrease the authorized number of shares of Preferred Stock of
      the
      Company; (e) liquidate or wind-up the Company; or (f) 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 or Common Stock; provided, however,
      that this restriction shall not apply to the repurchase of shares of Common
      Stock from employees, officers, directors, consultants or other persons
      performing services for the Company or any subsidiary pursuant to agreements
      under which the Company 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.
54
Series
      B Convertible Preferred Stock
The
      following is a summary of the preferences and rights contained in the
      Certificate of Determination ("Series B Certificate") of the Series B
      Convertible Preferred Stock and is qualified in its entirety by reference to
      such Series B Certificate, which is attached hereto as Exhibit 3.4.
Capitalized
      terms not otherwise defined herein have the respective meanings set forth in
      the
      Series B Certificate.
Stated
      Value
Each
      share of Series B Preferred Stock will have a stated value of $7.00 per share
      ("Series B Stated Value").
Dividends
Holders
      of Series B Preferred Stock (the "Series B Holders") are entitled to receive
      preferential dividends in cash on a quarterly basis at the rate of $0.56 per
      share per annum plus accumulated and unpaid dividends thereon (including any
      accrued late fees on overdue and unpaid dividends), (the "Series B Dividend").
      Dividends shall be due and payable in arrears on March 29, June 29, September
      29
      and December 29 of each year, commencing September 29, 2006, except that if
      such
      date is not a Business Day, then the dividend shall be payable on the first
      immediately succeeding Business Day (each such date being hereinafter referred
      to as a "
Dividend
      Payment Date
").
      All
      overdue accrued and unpaid dividends shall entail a late fee at the rate of
      fifteen percent (15%) per annum (or such lesser amount as required by applicable
      law), to accrue daily, from the date such dividend is due hereunder through
      and
      including the date of payment.
Unless
      full cumulative dividends (plus any accrued late fees thereon) have been or
      are
      contemporaneously distributed to both the Series B Preferred Stock and other
      preferred shares designated that rank in
pari
      passu
as the
      Series B Preferred Stock ("Parity Dividend Shares"), all dividends the Company
      declares upon the Series B Preferred Stock and the Parity Divdend Shares shall
      be declared pro rata with respect to all such shares, so that the amounts of
      such dividends shall in all cases bear to each other the same ratio that, at
      the
      time of the declaration, all accrued but unpaid dividends (plus any accrued
      late
      fees thereon) on such shares, respectively, bear to each other. No distributions
      shall be made with respect to the Common Stock, or other preferred shares
      designated as ranking junior the Series B Preferred Stock ("Junior Dividend
      Shares"), until (1) the Series B Dividend shall have been declared and paid or
      set apart through the most recent Dividend Payment Date, and (2) the Company
      has
      set apart for payment an amount in cash equal to the scheduled dividend payments
      for each of the next two Dividend Payment Dates.
Liquidation
      Preference
The
      liquidation value per share of Series B Preferred Stock in the event of any
      liquidation, dissolution or winding up of the Company, either voluntary or
      involuntary, shall be an amount equal to (i) the Series B Stated Value (subject
      to adjustment in the event of a stock split, stock dividend or similar event),
      plus (ii) an amount equal to the cash value of the accrued and unpaid dividends
      (including any accrued late fees) with respect to such share, whether or not
      declared, plus (iii) all liquidated damages and other amounts due in respect
      of
      the Series B Preferred Stock as provided in the
Series
      B
Certificate
      (the "
Liquidation
      Value
").
      Any
      shares which are junior to, in pari passu with, or senior to the Series B
      Preferred Stock with respect to redemption payments and rights upon liquidation,
      dissolution or winding-up of the affairs of the Company are referred to as
      "
Junior
      Liquidation Shares
",
      "
Parity
      Liquidation Shares
",
      and
"
Senior
      Liquidation Shares
",
      respectively. In the event of any voluntary or involuntary liquidation,
      dissolution or winding-up of the Company (a "
Liquidation
      Event
"),
      the
      Series B Holders (i) shall not be entitled to receive payments for the
      liquidation of the Preferred Shares held by them until the liquidation value
      of
      all Senior Liquidation Shares shall have been paid in full, and (ii) shall
      be
      entitled to receive the greater of: (a) one hundred twenty-five percent (125%)
      of the Liquidation Value; or (b) an amount equal an amount equal to the closing
      price of the Company's common stock on the day of the Liquidation Event
      multiplied by the number of shares of the Company's common stock that the
      Preferred Shares held by such Holder is convertible into ("
Liquidation
      Amount
")
      of
      such Preferred Shares held by them in preference to and in priority over any
      distributions upon the Junior Liquidation Shares. Upon payment in full of the
      Liquidation Amount to which the Holders are entitled, the Holders will not
      be
      entitled to any further participation in any distribution of assets by the
      Company. If the assets of the Company are not sufficient to pay in full the
      Liquidation Amount payable to the Holders and the liquidation value payable
      to
      the holders of any Parity Liquidation Shares, the holders of all such shares
      shall share ratably in such distribution of assets in accordance with the
      amounts that would be payable on the distribution if the amounts to which the
      Holders and the holders of Parity Liquidation Shares are entitled were paid
      in
      full.
55
Conversion
      Rights
Series
      B
      Holder's Conversion
Each
      share of the Series B Preferred Stock shall be convertible, at the option of
      the
      holder thereof, at any time after the date of issuance of such share into shares
      of Common Stock, subject to certain adjustments ("Series B Holder's
      Conversion"). However, the Company shall not issue shares of Common Stock upon a
      Series B Holder's Conversion in an amount which results in the Series B Holder
      or its Affiliates beneficially owning an aggregate of more the 4.99% of the
      Company's outstanding Common Stock, after giving effect to such issuance of
      Common Stock, on the applicable conversion date, with beneficial ownership
      being
      determined by reference to Rule 13d-3 under the Securities Exchange Act of
      1934,
      as amended. The number of shares of Common Stock to be delivered by the Company
      to a Series B Holder pursuant to a conversion shall be determined by dividing
      (i) the aggregate Liquidation Value of such Series B Holder's Preferred Shares
      to be converted by (ii) the conversion price in effect on the applicable
      conversion date. The initial conversion price shall be $0.261, and is subject
      to
      certain adjustments.
Automatic
      Conversion
The
        outstanding and unconverted Series B Preferred Shares shall be converted
        into shares of the Company's common stock at the Conversion Price then in effect
        by delivering to the Holders an Automatic Conversion Notice upon the happening
        of all of the following events: (i) for each of the twenty (20) consecutive
        Trading Days immediately preceding the date of delivery of the Automatic
        Conversion Notice, the daily Closing Price of the Common Stock shall be equal
        to
        at least two hundred fifty percent (250%) of the Conversion Price in effect
        as
        of the date immediately preceding the date of the Automatic Conversion Notice;
        and (ii) the daily trading volume of the Common Stock for each of the Trading
        Days during such twenty (20) Trading day period shall be at least 500,000
        shares; provided, however, no such conversion is permitted unless at the
        time of
        the delivery of the Automatic Conversion Notice and on the Automatic Conversion
        Date, (A) the Company is in compliance with all of its obligations under
        this
        Certificate of Determination and the Transaction Documents, (B) during each
        of
        the Trading Days in such twenty (20) day period, the Registration Statement
        has
        been effective and has not been suspended by the SEC, (C) as of the Conversion
        Date, the Registration Statement is effective and has not been suspended
        by the
        SEC and no event has occurred which will likely result in the Registration
        Statement being declared ineffective or suspended by the SEC, and (D) no
        Triggering Event (as described below under "Redemption Rights") hereof has
        occurred and is continuing. The Automatic Conversion Notice shall specify
        the
        date on which such conversion is to be effected, which date may not be prior
        to
        the day after the Company delivers such Automatic Conversion Notice in
        accordance the Certificate's notice provision or later than ten (10) Business
        Days subsequent to such delivery (the "Automatic Conversion Date"). If no
        Automatic Conversion Date is specified in the Automatic Conversion Notice,
        the
        Automatic Conversion Date shall be the day after the Automatic Conversion
        Notice
        is deemed delivered pursuant to the Certificate's notice provision. However, the
        Company shall not issue shares of Common Stock upon the Automatic
        Conversion in an amount which results in the Series B Holder or its Affiliates
        beneficially owning an aggregate of more the 4.99% of the Company's outstanding
        Common Stock, after giving effect to such issuance of Common Stock, on the
        applicable conversion date, with beneficial ownership being determined by
        reference to Rule 13d-3 under the Securities Exchange Act of 1934, as
        amended.
Mandatory
      Conversion
All
      of
      the then outstanding and unconverted shares of Series B Preferred Stock shall
      automatically be converted into shares of the Common Stock at the then-effective
      conversion price on the second anniversary of the original issuance date of
      such
      shares; provided that, no such conversion is permitted so long as a Triggering
      Event (
as
      defined below under "Redemption Rights"
)
      or
      (viii) hereof has occurred and is continuing; provided, further, that the
      Mandatory Conversion shall be delayed to the extent that a registration
      statement covering the resale of the Common Stock to be issued to holders of
      the
      Preferred Shares upon conversion is and has been continuously effective for
      a
      period of at least 120 calendar days prior to the Mandatory Conversion Date,
      but
      in no case should the delay be for a period more than 120 days after the
      Mandatory Conversion Date.
Anti-Dilution
      Adjustment
The
      Company will adjust the conversion price to reflect any stock splits, stock
      dividends or other combinations or distributions to holders of the Company's
      securities where the consideration is less than the current conversion price.
      The Company will not make this adjustment with respect to shares issued (1)
      upon
      conversion of the Company's Series A Preferred Stock issued pursuant to that
      certain Exchange Agreement, dated July 7, 2006, between the Company and
      Infosmart (the "
Exchange
      Agreement
")
      and
      the stockholders of Infosmart in accordance with the Certificate of
      Determination of the Series A Preferred Stock as of the date hereof; (2) for
      the
      issuance of Common Stock upon the exercise of warrants (including any warrants
      issued to the Placement Agent) pursuant to the terms of such warrants as of
      the
      date hereof issued in connection with the offering of the Preferred Shares
      (the
"
Private
      Placement
");
      or
      (3) for the issuance of Common Stock (whether directly or through Options or
      other Convertible Securities) to employees or directors of the Company pursuant
      to an equity incentive plan or agreement approved by the Company's
      shareholders.
56
Any
      grant
      by the Company (whether directly or by assumption in a merger or otherwise,
      in
      any manner) of any warrants, rights to subscribe for, or options to purchase
      any
      Common Stock (collectively, the "
Options
")
      or any
      issuance or sale by the Company (whether directly or by assumption in a merger
      or otherwise, in any manner) of any security convertible into or exchangeable
      for shares of Common Stock ("
Convertible
      Securities
")
      shall
      be deemed to be an issuance of Common Stock for anti-dilution purposes, whether
      or not immediately exercisable or convertible. The number of shares of Common
      Stock deemed to be issued shall be equal to the maximum number of shares of
      Common Stock issuable upon the exercise of such Options or conversion of such
      Convertible Securities. The price per share of Common Stock in such deemed
      issuance or sale of Common Stock shall be determined by dividing: (A) the sum
      of
      (a) the total amount, if any, received or receivable by the Company as
      consideration for the granting of such Options or issuance of such Convertible
      Securities, plus (b) the minimum aggregate amount of additional consideration
      payable to the Company upon the full exercise of all such Options or the full
      conversion of all such Convertible Securities ("
Total
      Consideration
");
      by
      (B) the total maximum number of shares of Common Stock issuable upon the
      exercise of such Options or the conversion of such Convertible
      Securities.
Voting
      Rights
Except
      as
      otherwise required by law, each Series B Holder shall be entitled to vote on
      all
      matters submitted to a vote of shareholders of the Company, and shall be
      entitled to that number of votes equal to the number of whole shares of Common
      Stock into which such Series B Holder's shares of Series B Preferred Stock could
      then be converted pursuant to the terms of the
Series
      B
Certificate
      at the record date for the determination of shareholders entitled to vote on
      such matter or, if no such record date is established, at the date such vote
      is
      taken or any written consent of shareholders is solicited. Except as otherwise
      required by law or as expressly provided herein, the Series B Holders shall
      vote
      together as a single class on all matters.
Redemption
      Rights
Upon
      a
      Triggering Event (as defined below), each Series B Holder shall have the right,
      at such Series B Holder's option, to require the Company to redeem all, but not
      less than all, of its then-outstanding Series B Preferred Stock at the
      Liquidation Amount applicable to such shares as of the Redemption Date (the
      "
Redemption
      Amount
").
A
      "Triggering Event" includes one or more of the following events (whatever the
      reason and whether it shall be voluntary or involuntary or effected by operation
      of law or pursuant to any judgment, decree or order of any court, or any order,
      rule or regulation of any administrative or governmental body):
(i)
      if,
      during the period in which the Registration Statement shall be required to
      be
      effective pursuant to the Registration Rights Agreement entered by and between
      the Company and the Series B Holders, the effectiveness of the Registration
      Statement lapses for any reason for more than an aggregate of forty-five (45)
      calendar days (which need not be consecutive days) during any twelve (12) month
      period, or the Series B Holders are not be permitted to resell shares of Common
      Stock required to be registered on the Registration Statement for more than
      an
      aggregate of twenty-five (25) calendar days (which need not be consecutive
      days)
      during any twelve (12) month period;
(ii)
      the
      Company fails to observe or perform any other covenant, agreement or warranty
      contained in, or otherwise commit any breach of the Transaction Documents,
      and
      such failure or breach shall not, if subject to the possibility of a cure by
      the
      Company, have been remedied within thirty (30) calendar days after the date
      on
      which written notice of such failure or breach shall have been given;
(iii)
      any
      material breach of the agreements required by the Purchase Agreement to be
      delivered to the Series B Holders at the closing thereof;
(iv)
      the
      Company shall be party to a Change of Control Transaction;
(v)
      the
      Common Stock fails to be listed or quoted for trading on the principal trading
      exchange or market for the Company's Common Stock for more than ten (10) Trading
      Days, which need not be consecutive Trading Days;
(vi)
      (a)
      the failure to have the registration statement required to be filed pursuant
      to
      Section 3(a) of the Registration Rights Agreement entered into in connection
      with the sale of the Preferred Shares declared effective by the Commission
      (as
      defined by the Registration Rights Agreement) by the one year anniversary of
      the
      closing date of the sale of the Preferred Shares AND the holder of such
      Preferred Shares can not sell any of the common stock to be received upon
      conversion of such Preferred Share pursuant to Rule 144, provided a legal
      opinion with respect to the availability of Rule 144 for the resale of
      Registrable Securities received upon conversion of such Preferred Shares has
      been rendered by a law firm acceptable to both the Company and the Holder as
      evidence that Rule 144 is available for such Registrable Securities; or (b)
      the
      Exercise Price (as defined in the warrants) of the warrants shall have been
      adjusted to the minimum Exercise Price of $0.15 and thereafter a Registration
      Event (as defined in the Registration Rights Agreement) shall have occurred
      or
      is continuing;
57
(vii)
      the
      entry by a court having jurisdiction in the premises of (a) a decree or order
      for relief in respect of the Company or any Subsidiary of a voluntary case
      or
      proceeding under any applicable Federal or State bankruptcy, insolvency,
      reorganization or other similar law or (b) a decree or order adjudging the
      Company or any Subsidiary as bankrupt or insolvent, or approving as properly
      filed a petition seeking reorganization, arrangement, adjustment or composition
      of or in respect of the Company or any Subsidiary under any applicable Federal
      or State law or (c) appointing a custodian, receiver, liquidator, assignee,
      trustee, sequestrator or other similar official of the Company or any Subsidiary
      or of any substantial part of its property, or ordering the winding up or
      liquidation of its affairs, and the continuance of any such decree or order
      for
      relief or any such other decree or order unstayed and in effect for a period
      of
      60 consecutive calendar days;
(viii)
      the commencement by the Company or any Subsidiary of a voluntary case or
      proceeding under any applicable Federal or State bankruptcy, insolvency,
      reorganization or other similar law or of any other case or proceeding to be
      adjudicated a bankrupt or insolvent, or the consent by it to the entry of a
      decree or order for relief in respect of the Company or any Subsidiary in an
      involuntary case or proceeding under any applicable Federal or State bankruptcy,
      insolvency, reorganization or other similar law or to the commencement of any
      bankruptcy or insolvency case or proceeding against it, or the filing by it
      of a
      petition or answer or consent seeking reorganization or relief under any
      applicable Federal or State law, or the consent by it to the filing of such
      petition or to the appointment of or taking possession by a custodian, receiver,
      liquidator, assignee, trustee, sequestrator or other similar official of the
      Company or any Subsidiary or of any substantial part of its property, or the
      making by it of an assignment for the benefit of creditors, or the admission
      by
      it in writing of its inability to pay its debts generally as they become due,
      or
      the taking of corporate action by the Company or any Subsidiary in furtherance
      of any such action;
(ix)
      any
      event of default occurs and is declared a default by the Company's creditor with
      respect to any material indebtedness in which the amount defaulted exceeds
      US$250,000 in any one instance and US$500,000 in the aggregate, and any
      applicable grace periods in such indebtedness with respect to such event of
      default shall have expired; or
(x)
      a
      final judgment or judgments for the payment of money aggregating in excess
      of
      $250,000 are rendered against the Company or any of its Subsidiaries and which
      judgments are not, within sixty (60) calendar days after the entry thereof,
      bonded, discharged or stayed pending appeal, or are not discharged within sixty
      (60) calendar days after the expiration of such stay; provided, however, that
      any judgment which is covered by insurance or an indemnity from a credit worthy
      party shall not be included in calculating the $250,000 amount set forth above
      so long as the Company provides the Holder a written statement from such insurer
      or indemnity provider (which written statement shall be reasonably satisfactory
      to the Holder) to the effect that such judgment is covered by insurance or
      an
      indemnity and the Company will receive the proceeds of such insurance or
      indemnity within thirty (30) calendar days of the issuance of such
      judgment.
Registration
      Rights
The
      Company will use its best efforts to cause a Registration Statement on Form
      SB-2
      (the "Registration Statement") relating to the resale of the common stock
      received by the holders of the Preferred Stock upon conversion of the Preferred
      Stock (the "Converted Common Stock") to be filed with the Securities and
      Exchange Commission within 30 days following the Closing (the "Filing Deadline
      Date") and shall use its commercially reasonable efforts to cause such
      Registration Statement to become effective within 150 days following the
      Closing. Subject to certain blackout periods, the Company is obligated to use
      best efforts to maintain the Registration Statement's effectiveness for such
      time as is required to permit the persons with the registered shares to be
      able
      to sell them in the public market either under the registration statement or
      Rule 144(k). In the event that it does not meet its registration obligations,
then
      the
      Company has agreed to each purchaser, as partial liquidated damages for the
      damages to the purchaser by reason thereof, and not as a penalty, at a rate
      equal to two percent (2%) of the purchase price of the shares held by such
      Purchaser per month, for each calendar month of the Registration Default Period
      (pro rated for any period less than 30 days), subject to a cumulative maximum
      value of 14%; provided, however, if a breach of the registration rights
      agreement obligation occurs (or is continuing) on a date more than one year
      after the Purchaser acquired the Registrable Securities (and thus the one year
      holding period under Rule 144(d) has elapsed), liquidated damages shall be
      paid
      only with respect to that portion of a purchaser's registrable securities that
      cannot then be immediately resold in reliance on Rule 144;
provided
      a legal opinion with respect to the availability of Rule 144 for the resale
      of
      Registrable Securities received upon conversion of the Series B Preferred Shares
      has been rendered by a law firm acceptable to both the Company and the Holder
      as
      evidence that Rule 144 is available for such Registrable Securities.
Each
      such
      payment shall be made and in cash and is due and payable within five business
      days after the end of each calendar month of the Registration Default Period
      until the termination of the Registration Default Period and within five
      business days after such termination. The penalty payment may be made at the
      election of the Company in cash or shares of common stock valued at 50% of
      the
      closing bid price for such Common Stock (on the securities market at which
      time
      constitutes the principal securities market for the Common Stock) on the day
      such penalty is due.
58
WARRANTS
In
      connection with the Offering, Cyber Merchants will issue the investors warrants
      to purchase 100% of the amount of shares of common stock into which the Series
      B
      Preferred Stock may be converted. Cyber Merchants will also issue a warrant
      to
      purchase a number of shares of common stock equal to 10% of the shares of common
      stock that the Series B Preferred Stock are convertible to the Placement Agents.
      The warrants will be immediately exercisable at any time for a period of five
      years at an exercise price equal to 125%
of
      the
      Conversion Price.
Anti-Takeover
      Provisions
Cyber
      Merchants' restated Articles of Incorporation and Bylaws contain provisions that
      may make it more difficult for a third party to acquire or may discourage
      acquisition bids for the Company. Cyber Merchants' Board of Directors is
      authorized, without action of its shareholders, to issue authorized but unissued
      common stock and preferred stock. The existence of undesignated preferred stock
      and authorized but unissued common stock enables Cyber Merchants, and the
      combined Company following the Exchange, to discourage or to make it more
      difficult to obtain control of us by means of a merger, tender offer, proxy
      contest or otherwise.
MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Cyber's
      common stock, having no par value per share ("Common Stock"), is traded on
      the
      Over-The-Counter Bulletin Board ("OTCBB") under the symbol "CMXG". Following
      the
      Combination, the combined Company will be continue to be traded on the
      OTCBB.
The
      following table sets forth, for the periods indicated, the reported high and
      low
      closing bid quotations for Cyber's common stock as reported on the OTCBB. The
      bid prices reflect inter-dealer quotations, do not include retail markups,
      markdowns or commissions and do not necessarily reflect actual transactions.
Common
      Stock
Quarter
                Ended
High
                Bid
Low
                Bid
May
                31, 2006
1.25
0.30
February
                28, 2006
0.51
0.30
November
                30, 2005
0.55
0.25
August
                31, 2005
1.45
0.25
May
                31, 2005
1.28
1.11
February
                28, 2005
1.28
0.94
November
                30, 2004
1.70
1.11
August
                31, 2005
2.55
1.70
May
                31, 2005
2.81
2.13
February
                28, 2004
2.81
2.81
Note:
Quotations
      on and prior to July 22, 2005 were adjusted for a 10-for-85 reverse stock split
      on July 22, 2005.
Transfer
      Agent and Registrar
The
      transfer agent and registrar for the common stock is U.S. Stock Transfer and
      Trust Company. Its address is 1745 Gardena Ave., Glendale, California
      91204-2991, and its telephone number is (818) 502-1404.
59
Dividend
      Policy
We
      do not
      currently intend to pay any cash dividends in the foreseeable future on our
      Common Stock and, instead, intend to retain earnings, if any, for future
      operation and expansion. Any decision to declare and pay dividends in the future
      will be made at the discretion of our board of directors and will depend on,
      among other things, our results of operations, cash requirements, financial
      condition, contractual restrictions and other factors that our board of
      directors may deem relevant.
LEGAL
      PROCEEDINGS
We
      are
      from time to time subject to other claims and litigation arising in the ordinary
      course of business. In the opinion of management, the ultimate outcome of claims
      and litigation of which management is aware will not have a material adverse
      effect on our consolidated financial position or results of operation.
      Management is not currently aware of any claims and litigation against
      Infosmart.
In
      Re:
      Factory 2-U Stores, Inc.
On March
      7, 2006, a complaint was filed against Cyber Merchants in a Chapter 7 bankruptcy
      proceeding in U.S. Bankruptcy Court in the District of Delaware in the matter
      captioned
In
      Re:
      Factory 2-U Stores, Inc.
The
      complaint seeks to recover from the Company $91,572 in alleged preferential
      transfers made to the Cyber Merchants by the debtor during the ninety-day period
      prior to the filing of the debtor's bankruptcy petition. Cyber Merchants intends
      to defend against such preference claim by asserting that such transfers were
      made in the ordinary course of business and such other available defenses.
      To
      the extent that Cyber Merchants incurs any losses, costs or damages with respect
      to the preference claim, including attorneys' fees and related costs, Cyber
      Merchants believes it may recover such losses, costs and damages from Frank
      Yuan
      and ASAP pursuant to the indemnification provisions under the Transfer
      Agreement. The Company has informed Mr. Yuan and ASAP that it intends to seek
      indemnification from them with respect to the preference claim. Further, the
      Company has informed Mr. Yuan and ASAP that the $50,000 reserve originally
      due
      to be paid March 30, 2006 under the terms of the Transfer Agreement will be
      retained by the Company until this preference claim is resolved to satisfy
      any
      potential indemnity claims.
Stanley
      Rosner ("Rosner") v. World Wide Magic Net, Inc. (n/k/a Cyber) and Burlington
      Coat Factory
,
      New
      York State Supreme Court, Nassau County, Index No. 98-006524. Breach of
      contract, fraud and tortuous interference action seeking $5,000,000 in
      compensatory damages, unspecified punitive damages and declaratory relief.
      By
      stipulation parties dated May 7, 1998, Rosner agreed to transfer the action
      to
      Supreme Court, New York County, after conceding Nassau County was not the proper
      venue for the action. Since that date, Rosner has neither transferred the case
      nor pursued it further.
RECENT
      SALES OF UNREGISTERED SECURITIES
Reference
      is made to Item 3.02 of this Current Report on Form 8-K for a description
      of recent sales of unregistered securities, which is hereby incorporated by
      reference.
INDEMNIFICATION
      OF OFFICERS AND DIRECTORS
Pursuant
      to the provisions of California's Corporation Code, Cyber has adopted the
      following indemnification provisions in its restated Articles of Incorporation
      for its directors and officers:
"(a)
Directors.
      The liability of the directors of this corporation for monetary damages shall
      be
      eliminated to the fullest extent permissible under California law.
(b)
Directors
      and Officers. The corporation is authorized to indemnify the directors and
      officers of the corporation to the fullest extent permissible under California
      law."
In
      addition, Cyber's Bylaws contain the following provision regarding
      indemnification of its officers, directors, employees or other agents of the
      corporation:
"The
      corporation has the power to indemnify any person who is or was a director,
      officer, employee, or other agent of this corporation or of its predecessor,
      or
      is or was serving as such of another corporation, partnership, joint venture,
      trust, or other enterprise, at the request of this corporation against expenses,
      judgments, fines, settlements, and other amounts actually and reasonably
      incurred in connection with any threatened, pending, or completed action or
      proceeding, whether civil, criminal, administrative, or investigative, as
      provided in California Corporations Code Section 317 as that section now exists
      or may from time to time be amended to provide."
60
Section 204
      of the California General Corporation Law allows a corporation, among other
      things, to eliminate or limit the personal liability of a director for monetary
      damages in an action brought by the corporation itself or by way of a derivative
      action brought by shareholders for breach of a director's duties to the
      corporation and its shareholders. The provision may not eliminate or limit
      liability of directors for the following specified actions, however:
      (i) for acts or omissions that involve intentional misconduct or a knowing
      and culpable violation of law; (ii) for acts or omissions that a director
      believes to be contrary to the best interests of the corporation or its
      shareholders, or that involve the absence of good faith on the part of the
      director; (iii) for any transaction from which a director derived an
      improper personal benefit; (iv) for acts or omissions that show a reckless
      disregard of the director's duty to the corporation or its shareholders in
      circumstances in which the director was aware, or should have been aware, in
      the
      ordinary course of performing a director's duties, of a risk of serious injury
      to the corporation or its shareholders; (v) for acts or omissions that
      constitute an unexcused pattern of inattention that amounts to an abdication
      of
      the director's duty to the corporation or its shareholders; (vi) for
      transactions between the corporation and a director, or between corporations
      having interrelated directors; and (vii) for improper distributions and
      stock dividends, loans and guaranties. The provision does not apply to acts
      or
      omissions occurring before the date that the provision became effective and
      does
      not eliminate or limit the liability of an officer for an act or omission as
      an
      officer, regardless of whether that officer is also a director.
Section 317
      of the California General Corporation Law gives a corporation the power to
      indemnify any person who was or is a party, or is threatened to be made a party,
      to any proceeding, whether threatened, pending, or completed, and whether civil,
      criminal, administrative or investigative, by reason of the fact that that
      person is or was a director, officer, employee or agent of the corporation,
      or
      is or was serving at the request of the corporation as a director, officer,
      employee or agent of another corporation, partnership, joint venture, trust
      or
      other enterprise. A corporation may indemnify such a person against expenses,
      judgments, fines, settlements and other amounts actually or reasonably incurred
      in connection with the proceeding, if that person acted in good faith, and
      in a
      manner that that person reasonably believed to be in the best interest of the
      corporation; and, in the case of a criminal proceeding, had no reasonable cause
      to believe the conduct of the person was unlawful. In an action by or in the
      right of the corporation, no indemnification may be made with respect to any
      claim, issue or matter (a) as to which the person shall have been adjudged
      to be liable to the corporation in the performance of that person's duty to the
      corporation and its shareholders, unless and only to the extent that the court
      in which such proceeding was brought shall determine that, in view of all of
      the
      circumstances of the case, the person is fairly and reasonably entitled to
      indemnity for expenses; and (b) which is settled or otherwise disposed of
      without court approval. To the extent that any such person has been successful
      on the merits in defense of any proceeding, or any claim, issue or matter
      therein, that person shall be indemnified against expenses actually and
      reasonably incurred in connection therewith. Indemnification is available only
      if authorized in the specific case by a majority of a quorum of disinterested
      directors, by independent legal counsel in a written opinion, by approval of
      the
      shareholders other than the person to be indemnified, or by the court. Expenses
      incurred by such a person may be advanced by the corporation before the final
      disposition of the proceeding upon receipt of an undertaking to repay the amount
      if it is ultimately determined that the person is not entitled to
      indemnification.
Section 317
      of the California General Corporation Law further provides that a corporation
      may indemnify its officers and directors in excess of the statutory provisions
      if authorized by its Articles of Incorporation and that a corporation may
      purchase and maintain insurance on behalf of any officer, director, employee
      or
      agent against any liability asserted or incurred in his or her capacity, or
      arising out of his or her status with the corporation.
The
      indemnification provisions described above provide coverage for claims arising
      under the Securities Act and the Exchange Act. Insofar as indemnification for
      liabilities arising under the Securities Act may be permitted to directors,
      officers and controlling persons of the Company pursuant to the Company's
      Articles of Incorporation, Bylaws, the California Corporations Code, or
      otherwise, we have been advised that in the opinion of the SEC, such
      indemnification is against public policy as expressed in the Securities Act
      and
      is, therefore, unenforceable.
Item 3.02
Unregistered
      Sales of Equity Securities
In
      August 2006 and immediately prior to the closing, the Company issued
      2,850,000 shares of Cyber's common stock to Worldwide Gateway Co., Ltd.
      ("Gateway") for Gateway's services as a consultant to Cyber connection with the
      Exchange ("Gateway Shares"). Such securities were not registered under the
      Securities Act of 1933. The issuance of these securities was exempt from
      registration under Section 4(2) of the Securities Act. Cyber made this
      determination based on the representations of Gateway, which included, in
      pertinent part, that such shareholder was not a "U.S. person" as that term
      is defined in Rule 902(k) of Regulation S under the Act, and that such
      shareholders were acquiring our common stock, for investment purposes for their
      own respective accounts and not as nominees or agents, and not with a view
      to
      the resale or distribution thereof, and that Gateway understood that the shares
      of our common stock may not be sold or otherwise disposed of without
      registration under the Securities Act or an applicable exemption therefrom.
61
Pursuant
      to the Exchange Agreement, Cyber issued 1,000,000 shares of its Series A
      Preferred Stock to the Infosmart shareholders in exchange for 100% of the
      outstanding shares of Infosmart. Each share of the Series A Preferred Stock
      will
      be convertible into 116.721360 shares of the Company's common stock. Such
      securities were not registered under the Securities Act of 1933. The issuance
      of
      these shares was exempt from registration pursuant to Regulation S under the
      Securities Act of 1933. Cyber made this determination based on the
      representations of Gateway, which included, in pertinent part, that such
      shareholders were not a "U.S. person" as that term is defined in Rule 902(k)
      of
      Regulation S under the Act, and that such shareholders were acquiring our common
      stock, for investment purposes for their own respective accounts and not as
      nominees or agents, and not with a view to the resale or distribution thereof,
      and that such shareholders understood that the shares of our common stock may
      not be sold or otherwise disposed of without registration under the Securities
      Act or an applicable exemption therefrom.
Pursuant
      to the Financing, Cyber issued 1,092,857.143 shares of its Series B Preferred
      Stock to the Investors in exchange for gross proceeds of approximately
      $7,650,000 that the Company received pursuant to Subscription Agreements entered
      into with the Investors for the purchase of its Series B Preferred Stock at
      a
      price of $7.00 per share. When converted to common stock, the conversion price
      per share is $0.261 per share of common stock, subject to standard adjustments.
      Such securities were not registered under the Securities Act of 1933. The
      issuance of these securities was exempt from registration under
      Section 4(2) of the Securities Act. Cyber made this determination based on
      the representations of Gateway, which included, in pertinent part, that such
      shareholders were either (a) "accredited investors" within the meaning of Rule
      501 of Regulation D promulgated under the Securities Act, or (b) not a "U.S.
      person" as that term is defined in Rule 902(k) of Regulation S under the Act,
      and that such shareholders were acquiring our common stock, for investment
      purposes for their own respective accounts and not as nominees or agents, and
      not with a view to the resale or distribution thereof, and that Gateway
      understood that the shares of our common stock may not be sold or otherwise
      disposed of without registration under the Securities Act or an applicable
      exemption therefrom.
In
      connection with Financing and the issuance of the Series B Preferred Stock
      to
      the Investors, Cyber also issued warrants to the Investors to purchase the
      number of shares of the common stock of Cyber Merchants into which such Series
      B
      Preferred Stock are convertible (the "Conversion Shares"). Cyber issued warrants
      to the Investors to purchase an aggregate of 29,310,345 shares common stock.
      The
      warrants have an exercise price of $0.326 per share, subject to adjustments.
      In
      connection with the Financing, Cyber also issued warrants to placement agents'
Keating Securities, LLC and Axiom Capital Management, Inc. for the purchase
      of
      an aggregate of 2,931,035 shares at an exercise price of $0.326. The warrants
      are fully vested and have a 5-year term. Such securities were not registered
      under the Securities Act of 1933. The issuance of these securities was exempt
      from registration under Section 4(2) of the Securities Act. Cyber made this
      determination based on the representations of the Investors, which included,
      in
      pertinent part, that such shareholders were either (a) "accredited investors"
      within the meaning of Rule 501 of Regulation D promulgated under the Securities
      Act, or (b) not a "U.S. person" as that term is defined in Rule 902(k) of
      Regulation S under the Act, and that such shareholders were acquiring our common
      stock, for investment purposes for their own respective accounts and not as
      nominees or agents, and not with a view to the resale or distribution thereof,
      and that the Investors understood that the shares of our common stock
      may not be sold or otherwise disposed of without registration under the
      Securities Act or an applicable exemption therefrom.
After
      the
      completion of the Exchange and the Financing, the Infosmart Shareholders
      (including HIG) will own 1,000,000 Series A Preferred Shares (equivalent to
      116,721,360 shares of Cyber's common stock on an as-converted basis), the
      Investors received 1,092,857.143 Series B Preferred Stock that is convertible
      into approximately 29,310,345 shares of Cyber's common stock, and the current
      Cyber stockholders (including Gateway) will own 12,969,040 shares of Cyber's
      common stock. Upon the mandatory conversion of the Series A Preferred Stock,
      the
      Infosmart Shareholders together with the Investors (assuming the Investors
      elect
      to convert all of their Series B Preferred Stock) will own approximately 91.84%
      of the total outstanding shares of Cyber's common stock, and the current Cyber
      stockholders will own approximately 8.16% of the total outstanding shares of
      Cyber's common stock.
62
Item 5.01
Changes
      in Control of Registrant.
As
      explained more fully in Item 2.01, in connection with the Exchange
      Agreement, Cyber issued 1,000,000 shares of its Series A Preferred Stock to
      the Infosmart shareholders in exchange for the transfer of 100% of the
      outstanding shares of Infosmart's capital stock by the Infosmart Shareholders to
      Cyber. Further, Cyber issued 1,092,857.143 shares of Series B Preferred Stock
      to
      the Investors in the Financing. Thus, at the Closing of the Exchange and the
      Financing, the Infosmart Shareholders (including HIG) owned 1,000,000 Series
      A
      Preferred Shares (equivalent to 116,721,360 shares of Cyber's common stock on an
      as-converted basis), the Investors received 1,092,857.143 Series B Preferred
      Stock that is convertible into approximately 29,310,345 shares of Cyber's common
      stock, and the current Cyber stockholders (including Gateway) owned 12,969,040
      shares of Cyber's common stock. The holders of Series A and Series B Preferred
      Shares are entitled to vote together with the holders of the common stock,
      as a
      single class, upon all matters submitted to holders of common stock for a vote.
Each
      Series A and Series B Preferred Share will carry a number of votes equal to
      the
      number of shares of common stock issuable upon conversion based on the then
      applicable conversion rate. As such, i
mmediately
      following the Exchange and Financing transactions, the Infosmart Shareholders
      (including HIG) held approximately 73.41% of the total combined voting power
      of
      all classes of Cyber's outstanding stock entitled to vote. Reference is made to
      the disclosures set forth under Item 2.01 of this Current Report on Form 8-K,
      which disclosure is incorporated herein by reference.
In
      connection with the Closing of the Exchange, and as explained more fully in
      Item
      2.01 above under the section titled "Management" and in Item 5.02 of the Current
      Report on Form 8-K that is being filed concurrently with this Form 8-K,
      effective on August 16, 2006, Luca Toscani, Margie Blackwell, Jeff Andrews
      and
      Kevin R. Keating resigned as members of Cyber's board of directors, and Kevin R.
      Keating resigned as President, Secretary and Treasurer of Cyber. Further,
      effective August 16, 2006, Kwok Chung, Sze Po Nei, Andrew Chang and Godwin
      Wong
      (the "New Cyber Directors") were appointed as members of Cyber's board of
      directors. Finally, effective August 16, 2006, the New Cyber Directors appointed
      Kwok Chung as the Chief Executive Officer and President of Cyber, and they
      appointed Sze Po Nei as the Chief Financial Officer, Treasurer and Secretary
      of
      Cyber.
The
      closing of the transaction under the Exchange Agreement, as amended, which
      resulted in the change of control of the registrant, occurred on August 16,
      2006. A copy of the Exchange Agreement is included as Exhibit 2.1 to the Current
      Report on Form 8-K filed by Cyber on July 12, 2006, and the First Amendment
      to
      the Exchange Agreement is included as Exhibit 2.5 to this Current Report on
      Form
      8-K.
63
Item
      5.03
Amendments
      to Articles of Incorporation or Bylaws; Change in Fiscal
      Year
Effective
      as of the Closing, pursuant to the provisions of the bylaws of Cyber, applicable
      to all holders of capital stock, the Board of Directors of Cyber, by resolution
      increased the authorized number of directors on the Board of Directors of Cyber
      from six to seven.
Cyber's
      Certificate of Determination, Preferences, Rights and Limitations of Series
      A
      Convertible Preferred Stock and its Certificate of Determination, Preferences,
      Rights and Limitations of Series B Convertible Preferred Stock, as filed with
      the Secretary of State of California, are attached as Exhibits 3.3 and
      3.4
to this
      Current Report on Form 8-K, and is incorporated herein by
      reference.
On
      August
      16, 2006, the Board of Directors, by written resolution, approved a resolution
      that revises Cyber's bylaws to increase the number of directors allowed for the
      Company to seven (7).
On
      August
      16, 2006, the Board of Directors, by written resolution, agreed to change the
      Company's fiscal year end effective August 16, 2006. The Company's current
      fiscal year end is May 31. The new fiscal year end will now be December 31.
      The
      report to cover the transition period will be the Form 10-KSB
Annual
      Report.
Item
      5.06
Change
      In Shell Company Status
As
          explained more fully in Item 2.01 above, Cyber was a "shell company" (as
          such
          term is defined in Rule 12b-2 under the Securities Exchange Act of 1934,
          as
          amended) immediately before the Closing of the Exchange. As a result of
          the
          Exchange, Infosmart became the wholly owned subsidiary of Cyber and became
          Cyber's main operational business. Consequently, Registrant believes that the
          Exchange has caused it to cease to be a shell company. For information
          about the
          Exchange, please see the information set forth above under Item 2.01 of
          this
          Current Report on Form 8-K commencing on page 3, which information is
          incorporated herein by reference.
Item 9.01
Financial
      Statement and Exhibits.
(a)
FINANCIAL
      STATEMENTS OF BUSINESS ACQUIRED.
The
      Audited Consolidated Financial Statements of Infosmart Group Limited as of
      December 31, 2005 and 2004 are filed as Exhibit 99.2 to this current report
      and
      are incorporated herein by reference.
The
      Unaudited Condensed Consolidated Financial Statements of Infosmart Group
      Limited as of June 30, 2006 and for the six months ended June 30, 2006 and
      2005
      are filed as Exhibit 99.3 to this current report and are incorporated herein
      by
      reference.
64
(b)
PRO
        FORMA
        FINANCIAL INFORMATION.
The
      following pro forma financial information is filed as Exhibit 99.4 to this
      Current Report and is incorporated herein by reference:
1.
The
                Unaudited Pro Forma Condensed Combined Balance Sheet of Cyber Merchants
                Exchange, Inc. and Infosmart Group Limited as of May 31,
                2006.
2.
The
                Unaudited Pro Forma Condensed Combined Statements of Operations of
                Cyber
                Merchants Exchange, Inc. and Infosmart Group Limited for August 25,
                2005
                (Inception) to May 31, 2006.
(c) 
      SHELL COMPANY TRANSACTIONS
Reference
      is made to Items  9.01(a) and 9.01(b) and
      the exhibits referred to therein, which are incorporated herein by
      reference.
(d)
EXHIBITS
EXHIBIT
      INDEX
Exhibit
Number
Description
2.1
Amended
                and Restated Securities Purchase Agreement, dated August 25, 2005
                (5)
2.2
Transfer
                and Assumption Agreement dated as of May 31, 2005 (5)
2.3
Exchange
                Agreement by and among Cyber, KI Equity, Hamptons Investment Group,
                Ltd.,
                Prime and the Prime Shareholders dated July 7, 2006
                *(6)
2.4
Guarantee
                and Assumption Agreement by and among Cyber, Infosmart, IS International,
                IS Technology and IS Media dated July 7, 2006 (6)
2.5
First
                Amendment to the Exchange Agreement dated August 16, 2006 between
                Cyber,
                KI Equity Partners, LLC, Hamptons Investment Group, Ltd., Prime,
                Prime
                Shareholders, Infosmart Group Ltd. and the Infosmart Shareholders
                *
2.6
Amended
                and Restated Guarantee and Assumption Agreement by and among Cyber,
                IS
                International, IS Technology and IS Media dated August 16, 2006
2.7
Voting
                Agreement by and among the Infosmart Stockholders and KI Equity dated
                August 16, 2006
2.8
Escrow
                Agreement by and among Cyber, KI Equity, Infosmart, the Infosmart
                Stockholders and Richardson, as escrow agent, dated August 16,
                2006
2.9
Financial
                Advisory Agreement by an among Keating Securities LLC and Cyber Merchants
                Exchange Inc. dated August 16, 2006
3.1
Articles
                of Incorporation (1)
3.2
Bylaws
                (1)
3.3
Certificate
                Of Determination Of Rights, Preferences, Privileges And Restrictions
                Of
                Series A Convertible Preferred Stock
3.4
Certificate
                Of Determination Of Rights, Preferences, Privileges And Restrictions
                Of
                Series B Convertible Preferred Stock
4.1
Lock-Up
                Agreement (2)
4.2
Specimen
                Stock Certificate for Shares of Common Stock of the Company
                (4)
4.3
Warrant
                expiring October 15, 2002 issued by the Company to Burlington Coat
                Factory
                Warehouse Corporation on October 15, 1997 (1)
4.4
Warrant
                expiring February 10, 2004 issued by the Company to Imperial Bank
                on
                February 10, 1999 (4)
4.5
Warrant
                expiring May 25, 2005 issued by the Company to Factory 2-U on May
                25, 2000
                (3)
10.1
Lease
                of registrant's facilities (1)
10.2
Participation
                Agreement with Burlington Coat Factory Warehouse Corporation
                (1)
10.3
Contract
                with Family Bargain Corporation (1)
10.4
1996
                World Wide Magic Net, Inc. Stock Option Plan (1)
10.5
1999
                Stock Option Plan (4)
10.6
2001
                Stock Option Plan (4)
10.7
Software
                Sales Agreement to Global Purchasing Dotcom (4)
10.8
Software
                Sales Agreement to eSEA Co., LTD (4)
10.9
Software
                Sales Agreement to C-Me Taiwan (4)
10.10
Joint
                Venture Agreement with Good Support International, Limited
                (4)
10.11
Joint
                Venture Agreement with Vickem Patana Co., Ltd. (4)
10.12
Joint
                Venture Agreement with Abest Tech Company, Ltd. (4)
10.13
Factory
                2-U Stores, Inc. - Joint Marketing and Cooperation Agreement
                (4)
65
10.14
Placement
                  Agent Agreement dated July 7, 2006 between the Registrant, Securities,
                  LLC
                  and Axiom Capital Management, Inc. *
10.15
Form
                  of Subscription Agreement between the Registrant and the Investor
                  to be
                  identified therein
10.16
Registration
                  Rights Agreement
10.17
Form
                  of Common Stock Purchase Warrant
10.18
Assignment
                  and Assumption of Placement Agreement by an among Infosmart, Cyber,
                  Keatings Securities, LLC and Axiom Capital Management, Inc. dated
                  August
                  16, 2006
10.19
Appointment
                  Letter Agreement by and among Sze Po Nei and Infosmart Group Limited
                  dated
                  June 1, 2006
10.20
Appointment
                  Letter Agreement by and among Andrew Chang and Infosmart Group
                  Limited
                  dated July 1, 2006
10.21
Appointment
                  Letter Agreement by and among Kwok Chung and Infosmart Group Limited
                  dated
                  July 1, 2006
10.22
Cooperation
                  Agreement by and among Infoscience Media Ltd. and Infoscience Holdings
                  Ltd. dated December 1, 2005
10.23
Cooperation
                  Agreement by and among Info Smart Technology Limited. and Mega
                  Century
                  Limited dated January 1, 2006
10.24
Amendment
                  Agreement by and among Info smart Technology Limited, Info Smart
                  International Enterprises Limited, and Mega Century Ltd. dated
                  January 1,
                  2006
10.25
Banking
                  Facilities Letter Agreement by and between Infoscience Media Limited
                  and Hang Seng Bank Limited dated September 15,
                  2005
10.26
General
                  Banking Facilities Agreement by and between Info Smart Technology
                  Ltd. and
                  Chiyu Banking Corporation Limited dated November 28,
                  2003
10.27
Contract
                  for two Automatic Dual Track DVDR Manufacturing Systems "Streamline
                  II
                  DVDR" between Infoscience Media Ltd. and ACME Cassette Manufacturing
                  Limited dated September 15, 2004
17.1
Letter
                  of Resignation from Kevin R. Keating to the Board of Directors
(7)
17.2
Letter
                  of Resignation of directors Jeff Andrews, Margie Blackwell and
                  Luca
                  Toscani to the Board of Directors (7)
21.1
List
                  of Subsidiaries
23.1
Consent
                  Letter of PKF
99.1
Press
                  Release
99.2
Financial
                  Statements for the Years Ended December 31, 2005 and
                  2004
99.3
Financial
                  Statements for the Quarters Ended June 30, 2006 and
                  2005
99.4
Pro
                  Forma Financial Information
(1)
Filed
                on May 6, 1999 as an exhibit to the Company's Registration Statement
                on
                Form SB-2 (File No. 333-60487), as amended, and incorporated herein
                by
                reference.
(2)
Filed
                on January 27, 2000 as an exhibit to a report by the Company on a
                Form 8-A
                and incorporated herein by
                reference.
(3)
Filed
                on July 18, 2000 as an exhibit to a report by the Company on a Form
                8-K
                dated June 30, 2000 and incorporated herein by
                reference.
(4)
Filed
                on September 29, 2000 as an exhibit to the Company's report on Form
                10-KSB
                for the fiscal year ended June 30, 2000 and incorporated herein by
                reference.
(5)
Filed
                on August 26, 2005 as an exhibit to a report by the Company on a
                Form 8-K
                dated August 25, 2005 and incorporated herein by
                reference.
(6)
Filed
                on July 12, 2006 as an exhibit to a report by the Company on a Form
                8-K
                dated July 7, 2006 and incorporated herein by
                reference.
(7)
Filed
                    as an exhibit to the Company's other Current Report on Form 8-K filed
                    concurrently with this Form 8-K.
*
The
      schedules to this document are not being filed herewith.  Cyber agrees to
      furnish supplementally a copy of any such schedule to the Securities and
      Exchange Commission upon request..
[The
      remainder of this page left blank intentionally.]
66
SIGNATURES
Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this Report on Form 8-K to be signed on its behalf by the
      undersigned hereunto duly authorized.
CYBER
                MERCHANTS EXCHANGE INC.
Date: August
              23, 2006
By:
/s/
              Kwok Chung
Kwok
                Chung
Chief
              Executive Officer
67