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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><a name="fis_unidentified_table"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>UNITED
      STATES </strong></font></a></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 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: 12pt; FONT-FAMILY: Times New Roman">Washington,
      D.C. 20549 </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="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: 16pt; 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="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>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 13 OR 15(d) of The 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="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>Date
      of Report (Date of earliest event reported):September 19,
      2006</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="center"><font style="DISPLAY: inline; FONT-SIZE: 24pt; FONT-FAMILY: Times New Roman"><strong><u>Science
      Dynamics Corporation</u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
      name of registrant as specified in its charter) </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div align="center">
      <table cellpadding="0" cellspacing="0" width="75%">

          <tr>
            <td valign="top" width="25%" style="border-bottom: #ffffff 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"><u>Delaware</u></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">(State
                or other jurisdiction</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">of
                incorporation)</font></div>
            </td>
            <td valign="top" width="25%" style="border-bottom: #ffffff 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"><u>000-10690</u></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">(Commission
                File Number)</font></div>
            </td>
            <td valign="top" width="25%" style="border-bottom: #ffffff 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"><u>22-2011859</u></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">(IRS
                Employer</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">Identification
                No.)</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7150
      N.
      Park Drive, Suite 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">Pennsauken,
      NJ 08109</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Address
      of principal executive offices and Zip Code) </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-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">Registrant's
      telephone number, including area code: (856) 910-1166</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">Copies
      to:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gregory
      Sichenzia, Esq.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Asher
      S.
      Levitsky P.C.</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">Sichenzia
      Ross Friedman Ference LLP</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">1065
      Avenue of the Americas</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">New
      York,
      New York 10018</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">Phone:
      (212) 930-9700</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">Fax:
      (212) 930-9725</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-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">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):</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-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">[
      ]
      Written communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[
      ]
      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)</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">[
      ]
      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="left"><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>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      1.01 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="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">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Securities
      Purchase Agreement with Barron Partners LP.</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      September 19, 2006, Science Dynamics Corporation, (the &#8220;Company&#8221;) entered into a
      securities purchase agreement (the &#8220;Purchase Agreement&#8221;) with Barron Partners LP
      (&#8220;Barron&#8221;) pursuant to which the Barron purchased, for $4,500,000, (a) a note in
      the principal amount of $4,500,000 (the &#8220;Note&#8221;), and (b) common stock purchase
      warrants (&#8220;Warrants&#8221;) to purchase up to 125,000,000 shares of the Company&#8217;s
      common stock at $0.05 per share and 125,000,000 shares of the Company&#8217;s common
      stock at $0.125 per share. The closing date for the sale of the securities
      was
      September 19, 2006 (the &#8220;Closing Date&#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">Pursuant
      to the Purchase Agreement, the Company&#8217;s board of directors approved, subject to
      stockholder approval, a restated certificate of incorporation which, among
      other
      provisions, effects a one-for-ten reverse split in the Company&#8217;s common stock,
      and agreed to submit the restated certificate of incorporation to the
      stockholders for their approval.</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">Upon
      the
      filing of the restated certificate of incorporation with the State of Delaware,
      principal and interest due on the Note shall be automatically converted into
      such number of shares of the Company&#8217;s Series A Preferred Stock as is determined
      by dividing the principal amount of the Note by the Conversion Price, which
      initially is $.575. Prior to such filing, the Note is convertible at the
      Conversion Price at the option of the holder.</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">Each
      share of Series A Preferred Stock is convertible into 25 shares of common stock
      subject to adjustment in certain instances, including the issuance by the
      Company of common stock at a price which is less than the conversion price
      applicable to the Series A Preferred Stock (the &#8220;Series A Conversion Price&#8221;),
      which is initially $.023 per share, subject to adjustment. </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
      the
      event that the Company does not file the restated certificate of incorporation
      within 150 days of the Closing Date, the Series A Conversion Price and the
      exercise price of the Warrants are each reduced by 6% for each whole or partial
      month that elapses between the 150</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><sup>th</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      day and
      the date that the restated certificate of incorporation is filed with the
      Secretary of State of Delaware. </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
      Purchase Agreement as well as the certificate of designation for the Series
      A
      Preferred Stock and Warrants provide for an adjustment in the conversion price
      of the note and Series A Preferred Stock and the exercise price of the Warrants
      if the Company&#8217;s earnings before interest, taxes, depreciation and amortization
      is less than a specified amount per share, on a fully-diluted basis, with a
      maximum reduction of 30% for each year. The target EBITDA per share is $.0019
      for 2006 and $.00549 for 2007. The amount of reduction per year is the
      percentage shortfall. Thus, a 15% shortfall will result in a 15% reduction
      in
      the applicable conversion or exercise price then in effect. For purpose of
      determining fully-diluted, all shares of Common Stock issuable upon conversion
      of convertible securities and upon exercise of warrants and options shall be
      deemed to be outstanding, regardless of whether (i) such shares are treated
      as
      outstanding for determining diluted earnings per share under GAAP, (ii) such
      securities are &#8220;in the money,&#8221; or (iii) such shares may be issued as a result of
      the 4.9% Limitation. The per share amounts are adjusted in accordance with
      GAAP
      to reflect any stock dividend, split, distribution, reverse split or combination
      of shares or other recapitalization, including the reverse split effected by
      the
      restated certificate of incorporation.</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 style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">1</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">&#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 initial conversion price of the Series A
      Preferred Stock, which is issuable upon conversion of the Note, and the exercise
      price of the and the adjusted numbers if (a) the EBITDA per share for both
      2006
      and 2007 is 15% below the respective targets (a &#8220;15% shortfall&#8221;) and (b) the
      EBITDA per share for 2007 is 50% or more below the target (a &#8220;50% shortfall&#8221;).
      The number of shares reflects the number of shares of common stock issuable
      upon
      conversion of the series A preferred stock, and are based on the assumption
      that
      no notes or preferred stock are converted into common stock until the adjustment
      has been made. There is no adjustment in the number of shares issuable upon
      exercise of the warrants. The number of issuable upon conversion reflects the
      number of shares issuable upon the conversion of all of the shares of series
      A
      preferred stock that are issuable upon conversion of the note.</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="77%">

          <tr>
            <td align="left" valign="bottom" width="20%" style="border-bottom: medium none;">&#160;</td>
            <td width="2%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Shares
                Issuable</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$.05
                Warrant</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
            <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$.125
                Warrant</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="20%" style="border-bottom: white solid;">&#160;</td>
            <td width="2%" style="border-bottom: white thin 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="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Conversion
                Price</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white thin 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="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Upon
                Conversion</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: white thin 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="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exercise
                Price</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: white thin 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="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exercise
                Price</font></div>
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            <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
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            <td align="left" valign="bottom" width="20%" 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">Unadjusted</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">$</font></div>
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            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">.023</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">195,652,174</font></div>
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            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
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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;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">.125</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="bottom" width="20%" style="border-bottom: white;">
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                shortfall</font></div>
            </td>
            <td width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">.0166</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">270,798,856</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">$</font></div>
            </td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">.0361</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</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">.0903</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="20%" 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">30%
                shortfall</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">$</font></div>
            </td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">.0113</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="right" valign="bottom" width="11%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">399,290,151</font></div>
            </td>
            <td align="left" valign="bottom" width="2%" style="border-bottom: #ccffcc;">&#160;</td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 10pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</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">.0245</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">.0612</font></div>
            </td>
            <td align="left" valign="bottom" width="1%" style="border-bottom: #ccffcc;">&#160;</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="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
      Series A Preferred Stock has no voting rights, except as required by law.
      However, so long as any shares of Series A Preferred Stock are outstanding,
      the
      Company shall not, without the affirmative approval of the holders of 75% of
      the
      shares of the Series A Preferred stock then outstanding, (a) alter or change
      adversely the powers, preferences or rights given to the Series A Preferred
      Stock or alter or amend the certificate of designation relating to the Series
      A
      Preferred Stock, (b) authorize or create any class of stock ranking as to
      dividends or distribution of assets upon liquidation senior to or otherwise
      pari
      passu with the Series A Preferred Stock, or any of preferred stock possessing
      greater voting rights or the right to convert at a more favorable price than
      the
      Series A Preferred Stock, (c) amend its certificate of incorporation or other
      charter documents in breach of any of these provisions, (d) increase the
      authorized number of shares of Series A Preferred Stock, or (e) enter into
      any
      agreement with respect to the foregoing.</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
      Purchase Agreement, the certificate of designation for the Series A Preferred
      Stock and the Warrants provide that the notes or Series A Preferred Stock cannot
      be converted and the warrants cannot be exercised to the extent that such
      conversion or exercise would result in the investor and its or his affiliates
      owning beneficially more than 4.9% of our common stock. Beneficial ownership
      is
      determined in accordance with </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section
      13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3
      thereunder. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">These
      provisions cannot be modified.</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 Purchase Agreement, the Company agreed to have appointed such number
      of
      independent directors that would result in a majority of its directors being
      independent directors, that the audit committee would be composed solely of
      independent directors and the compensation committee would have a majority
      of
      independent directors not later than 45 days after the closing. For a reason
      other than for an Excused Reason (as defined in the Purchase Agreement), the
      Company shall have 60 days to take such steps as are necessary so that the
      majority of the Company&#8217;s directors are independent, and for an Excused Reason,
      the Company shall have 75 days from the date the Company becomes aware of the
      event giving rise to the Excused Reason to take such steps as are necessary
      so
      that a majority of the Company&#8217;s directors are independent directors before the
      imposition of liquidated damages. The liquidated damages are computed in an
      amount equal to twenty percent per annum of the Purchase Price of the then
      outstanding shares of Series A Preferred Stock or principal amount of the Note,
      as the case may be, payable monthly in cash or Series A Preferred Stock at
      the
      option of the Investor, based on the number of days that such condition exists
      beyond the applicable grace period; provided, however, in no event shall the
      total payments whether in cash or Series A Preferred Stock exceed in the
      aggregate twenty percent of the Purchase Price of the shares of Series A
      Preferred Stock or principal amount of the Note, as the case may be, that are
      outstanding as of the date on which the computation is being made.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">2</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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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">The
      Company and Barron entered into a registration rights agreement pursuant to
      which the Company agreed to file, within 60 days after the closing, a
      registration statement covering the common stock issuable upon conversion of
      the
      Series A Preferred Stock and exercise of the Warrants. The failure of the
      Company to meet this schedule and other timetables provided in the registration
      rights agreement would result in the imposition of liquidated damages, which
      are
      payable through the issuance of additional shares of Series A Preferred Stock
      at
      the rate of 4,288 shares of Series A Preferred Stock for each day, based on
      the
      proposed registration of all of the underlying shares of common stock, with
      a
      maximum of 1,565,200 shares of Series A Preferred 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: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Warrants issued to the investors have a term of five years. The Warrants provide
      for adjustments if the Company does the meet certain EBITDA per share targets
      described above. The Warrants also provide that, with certain exceptions, if
      the
      Company issues Common Stock at a price, or warrants or other convertible
      securities with an exercise or conversion price which is less than the exercise
      price of the Warrants, the exercise price of the Warrants will be reduced to
      the
      sales price, exercise price or conversion price, as the case may be, of such
      other 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: 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 reimbursed Barron Partners for its due diligence and other expenses
      in the amount of $50,000.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Purchase Agreement provides that officers and directors of the Company and
      officers and directors Ricardi Technologies, Inc. (&#8220;RTI&#8221;) are subject to a two
      year lockup, during which period they may not publicly sell their
      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: 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 Purchase Agreement, the employment agreements of Joseph
      Noto, the Company&#8217;s Chief Financial Officer and Paul Burgess, the Company&#8217;s
      Chief Executive Officer were amended. Mr. Burgess&#8217; employment agreement was
      amended to provide that he will receive an incentive bonus based on five percent
      of the Company&#8217;s before tax net income of the most recent twelve month period of
      any acquisitions closed by the company during the term of this contract, so
      long
      as such before tax net income also resulted in an increase in earnings per
      share. The incentive salary payment shall be made within thirty (30) days of
      the
      close of any such transactions. The amendments to both Mr. Burgess and Mr.
      Noto&#8217;s employment agreements added a provision that provides that following the
      termination of the agreement and for one year thereafter,&#160;they will not
      engage in the communication technology business in the United States.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#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">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Ricciardi
      Technologies Inc. Stock Purchase</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">Pursuant
      to a Stock Purchase Agreement (the &#8220;RTI Agreement&#8221;) dated as of September 12,
      2006, between the Company, RTI and all of stockholders of RTI, the Company
      purchased all of the issued outstanding shares of the Common Stock of RTI.
      The
      RTI Agreement was executed and the closing was held on September 19, 2006
      contemporaneously with the Barron private placement. </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 RTI Agreement, the consideration for stock of RTI consisted of (a)
      $3,500,000, which was paid from the proceeds of the sale of the Note and
      Warrants to Barron, (b) 50,000,000 shares of common stock, (c) a $500,000
      promissory note (the &#8220;RTI Note&#8221;), which if not paid sooner must be paid in full
      on the earlier of (i) twelve months from the closing date, or (ii) the
      consummation of a transfer of all or substantially all of the assets or equity
      securities of the Company to a third party, and (b) 1,000,000 shares of the
      Company&#8217;s Series B Convertible Preferred Stock. To secure the indemnification
      obligations of the former RTI stockholders, a portion of the purchase price,
      consisting of $350,000 and 5,833,333 shares of common stock was placed in escrow
      for a period of 18 months, subject to any claims that may arise under the
      agreement during the 18-month warranty survival 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 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 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 automatically convert into common stock
      on September 18, 2007, at the conversion rate of 8 1/3 shares of commons stock,
      subject to adjustment in the event of stock dividends, splits and other
      distributions, combinations of shares or reverse splits or other
      recapitalizations. The Company may at any time until September 18, 2007, redeem
      the Series B Preferred Stock at a redemption price of $0.50 per share.
</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Except
      as
      otherwise provided by law, the holders of the Series B Preferred Stock do not
      have voting rights. However, the vote of the holders of a majority of the
      outstanding shares of Series B Preferred Stock shall be required for any
      amendment to the statement of designations setting forth the rights,
      preferences, privileges and limitations of the holders thereof. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If,
      and
      only if, the vote of the holders of the Series B Preferred Stock is required
      by
      law in connection with any merger or consolidation or a sale of all or
      substantially all of the Company&#8217;s business and assets, the holders of the
      Series B Preferred Stock shall vote with the holders of the Common Stock (and
      any other classes or series of capital stock that have similar voting rights)
      on
      an &#8220;as-if converted&#8221; basis.</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
      separate vote of the holders of the Series B Preferred Stock shall not be
      required to increase or decrease the number of authorized shares of Preferred
      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: 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 purchase price for price for RTI stock, the Company agreed to pay the
      former RTI stockholders up to an additional $1,500,000 depending on RTI&#8217;s EBITDA
      for the twelve-month period ending on the first anniversary of the Closing
      Date.
      If RTI&#8217;s EBITDA is at least $2,250,000 but less than $2,500,000, the former RTI
      stockholders receive $750,000, and if the EBITDA for such twelve month period
      is
      at least $2,500,000, the former RTI stockholders will receive $1,500,000.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the RTI Agreement, the Company is to deliver to the RTI&#8217;s employees incentive
      stock options to purchase 2,000,000 shares of common stock at an exercise price
      equal to the greater of: (i) the market price on the closing date and (ii)
      the
      volume-weighted average price per share for the fifteen (15) days prior to
      the
      Closing Date. The grant of the options shall be subject to approval by the
      Company, with approval not to be unreasonably withheld. During to two years
      following the closing, the Company shall grant the RTI employees incentive
      stock
      options to purchase 500,000 shares in each year of the two year period. These
      options shall have an exercise price equal to the greater of: (i) the closing
      market price and (ii) the volume-weighted average price per share for the
      fifteen (15) days prior to the date of each such grant. The options will have
      a
      ten-year term and shall vest equally in each year in first three years and
      such
      vesting shall accelerate if (i)&#160;such employee is terminated without cause
      or without good reason or (ii)&#160;upon a change of control of the Company.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#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">Pursuant
      to the RTI Agreement, to secure the Company&#8217;s payment obligations under the RTI
      Note, the Company and each owner of the issued and outstanding shares of RTI&#8217;s
      capital stock executed a Pledge Agreement. Pursuant to the Pledge Agreement,
      15.24% of the share of RTI&#8217;s capital stock purchased by the Company is being
      held in escrow until the payment in full by the Company&#8217; of the RTI Note.
</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 RTI Agreement, the Company and the former RTI stockholders entered into
      a
      registration rights agreement. Pursuant to the registration rights agreement,
      the three former RTI stockholders who were officers of RTI as of the Closing
      Date and the wife of one of the officers agreed not to sell their shares of
      the
      Company&#8217;s common stock in the public market for a period of twenty four months
      from the Closing Date. At any time thereafter, these stockholders have certain
      demand and piggyback registration rights. The other former RTI stockholders
      may
      include their shares in any registration statement filed by the Company,
      including the registration statement filed on behalf of Barron. There are no
      liquidated damages payable in the event that the Company fails to register
      these
      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 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="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the RTI Agreement, the Company also entered into a three-year employment
      agreement with Michael Ricciardi pursuant to which he shall be paid a base
      salary of $165,000 per year and an annual bonus of not less than 30% of his
      then
      current base salary, if established revenue and personal goals are achieved.
      Pursuant to the employment agreement, Mr. Ricciardi shall be the Company&#8217;s chief
      operating officer and shall be granted an incentive stock option to purchase
      1,250,000 shares of the common stock at an exercise price of $.06 per share.
      The
      agreement continues on a year-to-year basis after the three-year term unless
      terminated by either party as provided in the agreement.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amendment
      to Agreement with </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Laurus
      Master Fund, LTD</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company entered into a Omnibus Amendment and Waiver Agreement with Laurus Master
      Fund, LTD (&#8220;Laurus&#8221;), date September 18, 2006 (the &#8220;Laurus Agreement&#8221;) for the
      purpose of amending, restating and waiving certain terms of (i) the Amended
      and
      Restated Secured Convertible Term Note, issued as of February 11, 2005 and
      amended and restated as of July 21, 2006 (as amended and restated, amended,
      modified and supplemented from time to time, the&#160;&#8220;Term Note&#8221;) by the
      Company to Laurus, (ii) the Securities Purchase Agreement, dated as of February
      11, 2005 (as amended, modified or supplemented from time to time, the
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#8220;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Purchase
      Agreemen</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>t</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#8221;)
      by and
      between the Company and Laurus, (iii) the Common Stock Purchase Warrant, issued
      as of February 11, 2005 by the Company to Laurus (as amended and restated,
      amended, modified and supplemented from time to time, the&#160;&#8220;Initial
      Warrant&#8221;), (iv) the Common Stock Purchase Warrant, issued as of November 18,
      2005 by the Company to Laurus (as amended and restated, amended, modified and
      supplemented from time to time, the&#160;&#8220;Additional</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">Warrant&#8221;)
      and (v) the Forbearance Agreement, dated as of July 21, 2006 between the Company
      and Laurus (as amended, modified or supplemented from time to time, the
&#8220;Forbearance Agreement&#8221; and, together with the Term Note, the Purchase
      Agreement, the Initial Warrant, the Additional Warrant and each other Related
      Agreement as defined in the Purchase Agreement, collectively, the &#8220;Documents&#8221;
and each, a &#8220;Document&#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 id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the Laurus Agreement, on September 19, 2006, Laurus waived each Event of
      Default that may have arisen under Section 4.1 of the Term Note and Section
      3 of
      the Forbearance Agreement solely as a result of the failure by the Company
      to
      make the $32,656.25 in interest payments due to Laurus on September 1, 2006.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to Laurus Agreement, on September 19, 2006, in exchange for the cancellation
      of
      the term note in the principal amount of $ 2,000,000, the Company (a) paid
      $500,000 in principal amount of the Term Note, (b) issued an amendment and
      restated note in the principal amount of $250,000, and (c)&#160;issued a warrant
      to purchase up to 14,583,333 shares of common stock (subject to adjustment),
      upon the cashless exercise by the holder thereof for an imputed exercise price
      of $0.01 per share. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      connection with the Laurus Agreement, Laurus also executed a Lock up agreement,
      pursuant to which it agreed that, provided the Company is not in default on
      the
      note, it will not without the written consent of the Company sell, offer,
      contract or grant any option to sell (including without limitation any short
      sale), pledge, transfer, establish an open "put equivalent position" within
      the
      meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended,
      or otherwise dispose of the Shares or publicly announce an intention to do
      any
      of the foregoing, for a period of five (5) months from September 19, 2006.
      Additionally, pursuant to an Irrevocable Proxy, Laurus also gave the Company
      a
      proxy to vote all shares of Common Stock of the Company, now or in the future
      owned by Laurus to the extent such shares are issued to Laurus upon its exercise
      of its warrant to purchase 14,583,333 shares of common stock. Upon the sale
      or
      other transfer of the Shares, in whole or in part, or the assignment of the
      Warrant, the proxy shall automatically terminate (x) with respect to such sold
      or transferred shares at the time of such sale and/or transfer, or (y) with
      respect to all shares in the case of an assignment of the Warrant, at the time
      of such assignment, in each case, without any further action required by any
      person.</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="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Keshet Fund LP and Keshet L.P. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to a letter agreement between the Company and the Keshet Fund LP and Keshet
      L.P.
      (collectively the &#8220;Keshet&#8221;), the Company agreed to issue 3,000,000 shares of
      common stock in consideration for the cancellation of all payment obligations
      arising under the convertible notes issued to Keshet by the Company.
      Additionally, the Keshet will, at the Company&#8217;s expense, terminate all of its
      agreements with the Company, other than in respect of (x) indemnification and
      expense reimbursement provisions of such agreements and such other provisions
      thereof as expressly survive the payment in full of the Obligations and (y)
      any
      options and/or warrants received by Keshet from 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">Item
      2.01
      Completion of Acquisition or Disposition of Assets</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 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, pursuant to the RTI Agreement, the Company
      purchased all of the issued outstanding shares of the common stock of RTI.
      </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">RTI
      was
      founded in 1992 and provides software consulting and development services for
      the command and control of biological sensors and other Department of Defense
      requirements to United States federal governmental agencies either directly
      or
      though prime contractors of such governmental agencies RTI&#8217;s proprietary
      products include SensorView, which provides clients with the capability to
      command, control and monitor multiple distributed chemical, biological, nuclear,
      explosive and hazardous material sensors. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-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">Item
      3.02
      Unregistered Sales of Equity Securities. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 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">As
      described in Item 1.01, the Company issued the following securities on September
      19, 2006:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company sold to Barron for $4,500,000 the Note in the principal amount of
      $4,500,000 and warrants to purchase 125,000,000 shares at $.05 per share and
      125,000,000 shares at $.125 per share. In connection with this purchase, the
      Company paid or accrued brokerage fees of $234,000 to Dragonfly Capital
      Partners, LLC , of which $134,000 was paid at closing and the remaining $100,000
      is deferred, $125,000 to Colebrook Capitalof which $76,000 was paid at closing
      and $50,000 is deferred, and $20,000 to Crescent Fund LLC , all of which is
      deferred. In addition, the Company issued to Dragonfly warrants to purchase
      4,891,000 share of common stock at $.05 per share, and 4,891,000 shares of
      common stock at an exercise price of $.125. The Company agreed to use its
      commercially reasonable efforts to include these shares in the registration
      statement covering the shares being offered by Barron; however, there is no
      provision for liquidated damages in the event that we fail to register the
      shares as required.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</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">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the RTI Agreement, the Company issued 50,000,000 shares of common stock,
      a
      $500,000 promissory note, and 1,000,000 shares of the Company&#8217;s Series B
      Convertible Preferred Stock. Each share of Series B Preferred Stock will
      automatically convert into 8 1/3 shares of common Stock on January 18, 2007,
      which is the conversion rate. The conversion rate is subject to adjustment
      in
      the event any stock dividend, split and other distribution, combination of
      shares or reverse split or other recapitalization. In connection with the RTI
      transaction the company paid Watergate Holding LLC a brokerage fee in the amount
      of </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>$125,000.
      </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      the Laurus Agreement, the Company issued a note in the principal amount of
      $500,000 and warrants to purchase up to 14,583,333 shares of common stock on
      a
      cashless exercise basis using an imputed exercise price of $0.01 per share.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 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">(d)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Pursuant
      to a
      agreement with Keshet Fund LP and Keshet L.P., the Company issued 3,000,000
      shares of common stock to Keshet in satisfaction of obligations of the Company
      under convertible notes in the principal amount of $400,000 held by
      Keshet.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-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
      issuances of securities described above are exempt from registration under
      the
      Securities Act of 1933, pursuant to Section 4(2) or Rule 506 of he SEC
      thereunder there as transactions not involving a public offering. Except as
      disclosed in this Item 2.01, no underwriting or brokers&#8217; fee was paid in
      connection with the issuance of any of the securities described in this Item
      3.02.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-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">Item
      5.02
      Departure of Directors or Principal Officers; Election of Directors; appointment
      of Principal Officers. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      September 19, 2006, Michael Ricciardi, the founder, president and CEO of RTI
      became the Company&#8217;s chief operating officer. Pursuant to his employment
      agreement, he is to receive a base salary of $165,000 per year and an annual
      bonus of not less than 30% of his then current base salary, if established
      revenue and personal goals are achieved. In addition, the Company is to granted
      an incentive stock option to purchase 1,250,000 shares of the common stock
      at an
      exercise price of $.06 per share. </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">Mr.
      R</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">icciardi
      founded RTI and served as its president and chief executive officer and led
      the
      company&#8217;s technical team and operations since its inception in 1992. He has
      spent his career in software development and information management in the
      field
      of distributed and embedded systems. Prior to forming RTI, Mr. Ricciardi was
      the
      founder and principle in MAR-Computer Systems Designers, which specialized
      in
      system integration services. He also had prior experience with United
      Technologies Defense Systems, Sperry Marine Systems, Loral Advanced Projects
      and
      CACI Distributing Systems. Ricciardi is a graduate of the S.U.N.Y at Buffalo
      with a double major in applied mathematic and computer science. He also earned
      his master&#8217;s degree in computer science from the New York Institute of
      Technology.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-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">Item
      9.01
      Financial 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: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a)
      Financial Statements of Businesses Acquired</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      As
      permitted by Item&#160;9.01(a)(4) of Form 8-K, the Registrant will file the
      financial statements required by Item&#160;9.01(a)(1) of Form 8-K pursuant to an
      amendment to this Current Report on Form 8-K within seventy-one
      (71)&#160;calendar days after the date hereof.</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">(b)
      Pro
      Forma Financial Information</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      As
      permitted by Item&#160;9.01(b)(2) of Form 8-K, the Registrant will file the pro
      forma financial information required by Item&#160;9.01(b)(1) of Form 8-K
      pursuant to an amendment to this Current Report on Form 8-K within seventy-one
      (71)&#160;calendar days after the date hereof. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">7</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left">
          <div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.3; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font>&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exhibits.</font></div>
          </div>
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr bgcolor="white">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exhibit
                No. </font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Description
                </font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.1</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certificated
                of Designation for Series A Convertible Preferred Stock and Series
                B
                Convertible Redeemable Preferred Stock</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.1</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series
                A Warrant</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.2</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; 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 Warrant</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.3</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; 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
                C Warrant</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.4</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amended
                and Restated Common Stock Purchase Warrant issued to Laurus Master
                Fund,
                LTD to Purchase up to 3,000,000 shares of Common Stock of Science
                Dynamics
                Corporation.</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.5</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amended
                and Restated Common Stock Purchase Warrant issued to Laurus Master
                Fund,
                LTD to Purchase up to 6,000,000 shares of Common Stock of Science
                Dynamics
                Corporation.</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.6</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
                Stock Purchase Warrant issued to Laurus Master Fund, LTD to Purchase
                up to
                14,583,333 Shares of Common Stock of Science Dynamics
                Corporation.</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.7</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Second
                Amended and Restated Secured Term Note from Science Dynamics Corporation
                to Laurus Master Fund, LTD.</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.8</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Secured
                Promissory Note from Science Dynamics Corporation to Michael
                Ricciardi.</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.9</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Science
                Dynamics Corporation 6% Convertible Subordinated Note Due May 31,
                2007.</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Securities
                Purchase Agreement, between Science Dynamics Corporation and Barron
                Partners LP, dated September 15, 2006.</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.2</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
                Purchase Agreement by Ricciardi Technologies, Inc., its Owners, including
                Michael Ricciardi as the Owner Representative and Science Dynamics
                Corporation, dated as of September 12, 2006.</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.3</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Employment
                Agreement between Science Dynamics Corporation and Michael
                Ricciardi.</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.4</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Omnibus
                Amendment and Waiver between Science Dynamics Corporation and Laurus
                Master Fund, LTD, dated September 18, 2006</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.5</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amendment
                to Employment Agreement - Paul Burges</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.6</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amendment
                to Employment Agreement - Joseph Noto</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.1</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; 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 between Barron Partners L.P., Science Dynamics
                Corporation and Sichenzia Ross Friedman Ference LLP, dated as of
                August
                23, 2006.</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.2</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registration
                Rights Agreement by and among Science Dynamics Corporation and Barron
                Partners L.P., dated As of September 19, 2006.</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.3</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registration
                Rights Agreement by and among Science Dynamics Corporation Thomas
                Aylesworth, Barry Bendel, Darrell Berger, Laurence Blue, Brian Burke,
                Frank Debritz, Jeanmarie Devolite-Davis, David Godso, Donald Hargett,
                Thomas Hewitt, Markus Litscher, Joshua Presnell, Domenico Ricciardi,
                Lino
                Ricciard, Marie Ricciardi, Michael Ricciardi, Donald Upson, and Dan
                Young,
                dated January 19, 2006. </font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.4</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
                of Lock Up Agreement, executed pursuant to the Securities Purchase
                Agreement, between Science Dynamics Corporation and Barron Partners
                LP,
                dated September 15, 2006.</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.5</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pledge
                and Security Agreement made by between Science Dynamics Corporation
                in
                favor of and being delivered to Michael Ricciardi as Owner Representative,
                dated September 19, 2006.</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.6</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Escrow
                Agreement by and between Science Dynamics Corporation, Ricciardi
                Technologies, Inc. and the individuals listed on Schedule 1 thereto,
                dated
                September 19, 2006. </font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.7</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Lockup
                Agreement from Laurus Master Fund, LTD. </font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.8</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Irrevocable
                Proxy</font></div>
            </td>
          </tr>
          <tr bgcolor="#ccffcc">
            <td align="left" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.9</font></div>
            </td>
            <td align="left" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Letter
                Agreement between the Keshet fund L.P. and Keshet L.P. and Science
                Dynamics Corporation, September 19,
                2006</font></div>
            </td>
          </tr>

      </table>
    </div>
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      </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 requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned hereunto
      duly authorized. </font></div>
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            <td width="50%">&#160;</td>
            <td width="50%"><strong><font size="2">Science Dynamics
              Corporation</font></strong>&#160;</td>
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            <td width="50%">&#160;</td>
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            <td width="50%" style="border-bottom: #ffffff solid;"><font size="2">Date:
              September 25, 2006</font>&#160;</td>
            <td width="50%" style="border-bottom: black thin solid;"><font size="2">/s/
              Paul Burgess</font>&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td width="50%">&#160;</td>
            <td width="50%"><font size="2">Paul Burgess, Chief Executive
              Officer</font>&#160;</td>
          </tr>

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{"company-data": {"conformed-name": "SCIENCE DYNAMICS CORP", "cik": "0000350644", "assigned-sic": "3661", "irs-number": "222011859", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-10690", "film-number": "061107115"}, "business-address": {"street1": "1919 SPRINGDALE RD", "city": "CHERRY HILL", "state": "NJ", "zip": "08003", "phone": "8564240068"}, "mail-address": {"street1": "SCIENCE DYNAMICS CORP", "street2": "1919 SPRINGDALE RD", "city": "CHERRY HILL", "state": "NJ", "zip": "08003"}}
UNITED
      STATES
SECURITIES
      AND EXCHANGE COMMISSION
Washington,
      D.C. 20549
FORM
      8-K
CURRENT
      REPORT
Pursuant
      to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date
      of Report (Date of earliest event reported):September 19,
      2006
Science
      Dynamics Corporation
(Exact
      name of registrant as specified in its charter)
Delaware
(State
                or other jurisdiction
of
                incorporation)
000-10690
(Commission
                File Number)
22-2011859
(IRS
                Employer
Identification
                No.)
7150
      N.
      Park Drive, Suite 500
Pennsauken,
      NJ 08109
(Address
      of principal executive offices and Zip Code)
Registrant's
      telephone number, including area code: (856) 910-1166
Copies
      to:
Gregory
      Sichenzia, Esq.
Asher
      S.
      Levitsky P.C.
Sichenzia
      Ross Friedman Ference LLP
1065
      Avenue of the Americas
New
      York,
      New York 10018
Phone:
      (212) 930-9700
Fax:
      (212) 930-9725
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))
Item
      1.01 Entry into a Material Definitive Agreement.
(a)
Securities
      Purchase Agreement with Barron Partners LP.
On
      September 19, 2006, Science Dynamics Corporation, (the "Company") entered into a
      securities purchase agreement (the "Purchase Agreement") with Barron Partners LP
      ("Barron") pursuant to which the Barron purchased, for $4,500,000, (a) a note in
      the principal amount of $4,500,000 (the "Note"), and (b) common stock purchase
      warrants ("Warrants") to purchase up to 125,000,000 shares of the Company's
      common stock at $0.05 per share and 125,000,000 shares of the Company's common
      stock at $0.125 per share. The closing date for the sale of the securities
      was
      September 19, 2006 (the "Closing Date").
Pursuant
      to the Purchase Agreement, the Company's board of directors approved, subject to
      stockholder approval, a restated certificate of incorporation which, among
      other
      provisions, effects a one-for-ten reverse split in the Company's common stock,
      and agreed to submit the restated certificate of incorporation to the
      stockholders for their approval.
Upon
      the
      filing of the restated certificate of incorporation with the State of Delaware,
      principal and interest due on the Note shall be automatically converted into
      such number of shares of the Company's Series A Preferred Stock as is determined
      by dividing the principal amount of the Note by the Conversion Price, which
      initially is $.575. Prior to such filing, the Note is convertible at the
      Conversion Price at the option of the holder.
Each
      share of Series A Preferred Stock is convertible into 25 shares of common stock
      subject to adjustment in certain instances, including the issuance by the
      Company of common stock at a price which is less than the conversion price
      applicable to the Series A Preferred Stock (the "Series A Conversion Price"),
      which is initially $.023 per share, subject to adjustment.
In
      the
      event that the Company does not file the restated certificate of incorporation
      within 150 days of the Closing Date, the Series A Conversion Price and the
      exercise price of the Warrants are each reduced by 6% for each whole or partial
      month that elapses between the 150
th
day and
      the date that the restated certificate of incorporation is filed with the
      Secretary of State of Delaware.
The
      Purchase Agreement as well as the certificate of designation for the Series
      A
      Preferred Stock and Warrants provide for an adjustment in the conversion price
      of the note and Series A Preferred Stock and the exercise price of the Warrants
      if the Company's earnings before interest, taxes, depreciation and amortization
      is less than a specified amount per share, on a fully-diluted basis, with a
      maximum reduction of 30% for each year. The target EBITDA per share is $.0019
      for 2006 and $.00549 for 2007. The amount of reduction per year is the
      percentage shortfall. Thus, a 15% shortfall will result in a 15% reduction
      in
      the applicable conversion or exercise price then in effect. For purpose of
      determining fully-diluted, all shares of Common Stock issuable upon conversion
      of convertible securities and upon exercise of warrants and options shall be
      deemed to be outstanding, regardless of whether (i) such shares are treated
      as
      outstanding for determining diluted earnings per share under GAAP, (ii) such
      securities are "in the money," or (iii) such shares may be issued as a result of
      the 4.9% Limitation. The per share amounts are adjusted in accordance with
      GAAP
      to reflect any stock dividend, split, distribution, reverse split or combination
      of shares or other recapitalization, including the reverse split effected by
      the
      restated certificate of incorporation.
1
The
      following table sets forth the initial conversion price of the Series A
      Preferred Stock, which is issuable upon conversion of the Note, and the exercise
      price of the and the adjusted numbers if (a) the EBITDA per share for both
      2006
      and 2007 is 15% below the respective targets (a "15% shortfall") and (b) the
      EBITDA per share for 2007 is 50% or more below the target (a "50% shortfall").
      The number of shares reflects the number of shares of common stock issuable
      upon
      conversion of the series A preferred stock, and are based on the assumption
      that
      no notes or preferred stock are converted into common stock until the adjustment
      has been made. There is no adjustment in the number of shares issuable upon
      exercise of the warrants. The number of issuable upon conversion reflects the
      number of shares issuable upon the conversion of all of the shares of series
      A
      preferred stock that are issuable upon conversion of the note.
Shares
                Issuable
$.05
                Warrant
$.125
                Warrant
Conversion
                Price
Upon
                Conversion
Exercise
                Price
Exercise
                Price
Unadjusted
$
.023
195,652,174
$
.05
$
.125
15%
                shortfall
$
.0166
270,798,856
$
.0361
$
.0903
30%
                shortfall
$
.0113
399,290,151
$
.0245
$
.0612
The
      Series A Preferred Stock has no voting rights, except as required by law.
      However, so long as any shares of Series A Preferred Stock are outstanding,
      the
      Company shall not, without the affirmative approval of the holders of 75% of
      the
      shares of the Series A Preferred stock then outstanding, (a) alter or change
      adversely the powers, preferences or rights given to the Series A Preferred
      Stock or alter or amend the certificate of designation relating to the Series
      A
      Preferred Stock, (b) authorize or create any class of stock ranking as to
      dividends or distribution of assets upon liquidation senior to or otherwise
      pari
      passu with the Series A Preferred Stock, or any of preferred stock possessing
      greater voting rights or the right to convert at a more favorable price than
      the
      Series A Preferred Stock, (c) amend its certificate of incorporation or other
      charter documents in breach of any of these provisions, (d) increase the
      authorized number of shares of Series A Preferred Stock, or (e) enter into
      any
      agreement with respect to the foregoing.
The
      Purchase Agreement, the certificate of designation for the Series A Preferred
      Stock and the Warrants provide that the notes or Series A Preferred Stock cannot
      be converted and the warrants cannot be exercised to the extent that such
      conversion or exercise would result in the investor and its or his affiliates
      owning beneficially more than 4.9% of our common stock. Beneficial ownership
      is
      determined in accordance with
Section
      13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3
      thereunder.
These
      provisions cannot be modified.
Pursuant
      to the Purchase Agreement, the Company agreed to have appointed such number
      of
      independent directors that would result in a majority of its directors being
      independent directors, that the audit committee would be composed solely of
      independent directors and the compensation committee would have a majority
      of
      independent directors not later than 45 days after the closing. For a reason
      other than for an Excused Reason (as defined in the Purchase Agreement), the
      Company shall have 60 days to take such steps as are necessary so that the
      majority of the Company's directors are independent, and for an Excused Reason,
      the Company shall have 75 days from the date the Company becomes aware of the
      event giving rise to the Excused Reason to take such steps as are necessary
      so
      that a majority of the Company's directors are independent directors before the
      imposition of liquidated damages. The liquidated damages are computed in an
      amount equal to twenty percent per annum of the Purchase Price of the then
      outstanding shares of Series A Preferred Stock or principal amount of the Note,
      as the case may be, payable monthly in cash or Series A Preferred Stock at
      the
      option of the Investor, based on the number of days that such condition exists
      beyond the applicable grace period; provided, however, in no event shall the
      total payments whether in cash or Series A Preferred Stock exceed in the
      aggregate twenty percent of the Purchase Price of the shares of Series A
      Preferred Stock or principal amount of the Note, as the case may be, that are
      outstanding as of the date on which the computation is being made.
2
The
      Company and Barron entered into a registration rights agreement pursuant to
      which the Company agreed to file, within 60 days after the closing, a
      registration statement covering the common stock issuable upon conversion of
      the
      Series A Preferred Stock and exercise of the Warrants. The failure of the
      Company to meet this schedule and other timetables provided in the registration
      rights agreement would result in the imposition of liquidated damages, which
      are
      payable through the issuance of additional shares of Series A Preferred Stock
      at
      the rate of 4,288 shares of Series A Preferred Stock for each day, based on
      the
      proposed registration of all of the underlying shares of common stock, with
      a
      maximum of 1,565,200 shares of Series A Preferred Stock.
The
      Warrants issued to the investors have a term of five years. The Warrants provide
      for adjustments if the Company does the meet certain EBITDA per share targets
      described above. The Warrants also provide that, with certain exceptions, if
      the
      Company issues Common Stock at a price, or warrants or other convertible
      securities with an exercise or conversion price which is less than the exercise
      price of the Warrants, the exercise price of the Warrants will be reduced to
      the
      sales price, exercise price or conversion price, as the case may be, of such
      other securities.
The
      Company also reimbursed Barron Partners for its due diligence and other expenses
      in the amount of $50,000.
The
      Purchase Agreement provides that officers and directors of the Company and
      officers and directors Ricardi Technologies, Inc. ("RTI") are subject to a two
      year lockup, during which period they may not publicly sell their
      shares.
In
      connection with the Purchase Agreement, the employment agreements of Joseph
      Noto, the Company's Chief Financial Officer and Paul Burgess, the Company's
      Chief Executive Officer were amended. Mr. Burgess' employment agreement was
      amended to provide that he will receive an incentive bonus based on five percent
      of the Company's before tax net income of the most recent twelve month period of
      any acquisitions closed by the company during the term of this contract, so
      long
      as such before tax net income also resulted in an increase in earnings per
      share. The incentive salary payment shall be made within thirty (30) days of
      the
      close of any such transactions. The amendments to both Mr. Burgess and Mr.
      Noto's employment agreements added a provision that provides that following the
      termination of the agreement and for one year thereafter, they will not
      engage in the communication technology business in the United States.
(b)
Ricciardi
      Technologies Inc. Stock Purchase
Pursuant
      to a Stock Purchase Agreement (the "RTI Agreement") dated as of September 12,
      2006, between the Company, RTI and all of stockholders of RTI, the Company
      purchased all of the issued outstanding shares of the Common Stock of RTI.
      The
      RTI Agreement was executed and the closing was held on September 19, 2006
      contemporaneously with the Barron private placement.
Pursuant
      to the RTI Agreement, the consideration for stock of RTI consisted of (a)
      $3,500,000, which was paid from the proceeds of the sale of the Note and
      Warrants to Barron, (b) 50,000,000 shares of common stock, (c) a $500,000
      promissory note (the "RTI Note"), which if not paid sooner must be paid in full
      on the earlier of (i) twelve months from the closing date, or (ii) the
      consummation of a transfer of all or substantially all of the assets or equity
      securities of the Company to a third party, and (b) 1,000,000 shares of the
      Company's Series B Convertible Preferred Stock. To secure the indemnification
      obligations of the former RTI stockholders, a portion of the purchase price,
      consisting of $350,000 and 5,833,333 shares of common stock was placed in escrow
      for a period of 18 months, subject to any claims that may arise under the
      agreement during the 18-month warranty survival period.
3
Each
      share of Series B Preferred Stock will automatically convert into common stock
      on September 18, 2007, at the conversion rate of 8 1/3 shares of commons stock,
      subject to adjustment in the event of stock dividends, splits and other
      distributions, combinations of shares or reverse splits or other
      recapitalizations. The Company may at any time until September 18, 2007, redeem
      the Series B Preferred Stock at a redemption price of $0.50 per share.
Except
      as
      otherwise provided by law, the holders of the Series B Preferred Stock do not
      have voting rights. However, the vote of the holders of a majority of the
      outstanding shares of Series B Preferred Stock shall be required for any
      amendment to the statement of designations setting forth the rights,
      preferences, privileges and limitations of the holders thereof.
If,
      and
      only if, the vote of the holders of the Series B Preferred Stock is required
      by
      law in connection with any merger or consolidation or a sale of all or
      substantially all of the Company's business and assets, the holders of the
      Series B Preferred Stock shall vote with the holders of the Common Stock (and
      any other classes or series of capital stock that have similar voting rights)
      on
      an "as-if converted" basis.
The
      separate vote of the holders of the Series B Preferred Stock shall not be
      required to increase or decrease the number of authorized shares of Preferred
      Stock.
As
      part
      of the purchase price for price for RTI stock, the Company agreed to pay the
      former RTI stockholders up to an additional $1,500,000 depending on RTI's EBITDA
      for the twelve-month period ending on the first anniversary of the Closing
      Date.
      If RTI's EBITDA is at least $2,250,000 but less than $2,500,000, the former RTI
      stockholders receive $750,000, and if the EBITDA for such twelve month period
      is
      at least $2,500,000, the former RTI stockholders will receive $1,500,000.
Pursuant
      to the RTI Agreement, the Company is to deliver to the RTI's employees incentive
      stock options to purchase 2,000,000 shares of common stock at an exercise price
      equal to the greater of: (i) the market price on the closing date and (ii)
      the
      volume-weighted average price per share for the fifteen (15) days prior to
      the
      Closing Date. The grant of the options shall be subject to approval by the
      Company, with approval not to be unreasonably withheld. During to two years
      following the closing, the Company shall grant the RTI employees incentive
      stock
      options to purchase 500,000 shares in each year of the two year period. These
      options shall have an exercise price equal to the greater of: (i) the closing
      market price and (ii) the volume-weighted average price per share for the
      fifteen (15) days prior to the date of each such grant. The options will have
      a
      ten-year term and shall vest equally in each year in first three years and
      such
      vesting shall accelerate if (i) such employee is terminated without cause
      or without good reason or (ii) upon a change of control of the Company.
Pursuant
      to the RTI Agreement, to secure the Company's payment obligations under the RTI
      Note, the Company and each owner of the issued and outstanding shares of RTI's
      capital stock executed a Pledge Agreement. Pursuant to the Pledge Agreement,
      15.24% of the share of RTI's capital stock purchased by the Company is being
      held in escrow until the payment in full by the Company' of the RTI Note.
Pursuant
      to the RTI Agreement, the Company and the former RTI stockholders entered into
      a
      registration rights agreement. Pursuant to the registration rights agreement,
      the three former RTI stockholders who were officers of RTI as of the Closing
      Date and the wife of one of the officers agreed not to sell their shares of
      the
      Company's common stock in the public market for a period of twenty four months
      from the Closing Date. At any time thereafter, these stockholders have certain
      demand and piggyback registration rights. The other former RTI stockholders
      may
      include their shares in any registration statement filed by the Company,
      including the registration statement filed on behalf of Barron. There are no
      liquidated damages payable in the event that the Company fails to register
      these
      shares.
4
Pursuant
      to the RTI Agreement, the Company also entered into a three-year employment
      agreement with Michael Ricciardi pursuant to which he shall be paid a base
      salary of $165,000 per year and an annual bonus of not less than 30% of his
      then
      current base salary, if established revenue and personal goals are achieved.
      Pursuant to the employment agreement, Mr. Ricciardi shall be the Company's chief
      operating officer and shall be granted an incentive stock option to purchase
      1,250,000 shares of the common stock at an exercise price of $.06 per share.
      The
      agreement continues on a year-to-year basis after the three-year term unless
      terminated by either party as provided in the agreement.
(c)
Amendment
      to Agreement with
Laurus
      Master Fund, LTD
The
      Company entered into a Omnibus Amendment and Waiver Agreement with Laurus Master
      Fund, LTD ("Laurus"), date September 18, 2006 (the "Laurus Agreement") for the
      purpose of amending, restating and waiving certain terms of (i) the Amended
      and
      Restated Secured Convertible Term Note, issued as of February 11, 2005 and
      amended and restated as of July 21, 2006 (as amended and restated, amended,
      modified and supplemented from time to time, the "Term Note") by the
      Company to Laurus, (ii) the Securities Purchase Agreement, dated as of February
      11, 2005 (as amended, modified or supplemented from time to time, the
"
Purchase
      Agreemen
t
")
      by and
      between the Company and Laurus, (iii) the Common Stock Purchase Warrant, issued
      as of February 11, 2005 by the Company to Laurus (as amended and restated,
      amended, modified and supplemented from time to time, the "Initial
      Warrant"), (iv) the Common Stock Purchase Warrant, issued as of November 18,
      2005 by the Company to Laurus (as amended and restated, amended, modified and
      supplemented from time to time, the "Additional
Warrant")
      and (v) the Forbearance Agreement, dated as of July 21, 2006 between the Company
      and Laurus (as amended, modified or supplemented from time to time, the
"Forbearance Agreement" and, together with the Term Note, the Purchase
      Agreement, the Initial Warrant, the Additional Warrant and each other Related
      Agreement as defined in the Purchase Agreement, collectively, the "Documents"
and each, a "Document").
Pursuant
      to the Laurus Agreement, on September 19, 2006, Laurus waived each Event of
      Default that may have arisen under Section 4.1 of the Term Note and Section
      3 of
      the Forbearance Agreement solely as a result of the failure by the Company
      to
      make the $32,656.25 in interest payments due to Laurus on September 1, 2006.
Pursuant
      to Laurus Agreement, on September 19, 2006, in exchange for the cancellation
      of
      the term note in the principal amount of $ 2,000,000, the Company (a) paid
      $500,000 in principal amount of the Term Note, (b) issued an amendment and
      restated note in the principal amount of $250,000, and (c) issued a warrant
      to purchase up to 14,583,333 shares of common stock (subject to adjustment),
      upon the cashless exercise by the holder thereof for an imputed exercise price
      of $0.01 per share.
In
      connection with the Laurus Agreement, Laurus also executed a Lock up agreement,
      pursuant to which it agreed that, provided the Company is not in default on
      the
      note, it will not without the written consent of the Company sell, offer,
      contract or grant any option to sell (including without limitation any short
      sale), pledge, transfer, establish an open "put equivalent position" within
      the
      meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended,
      or otherwise dispose of the Shares or publicly announce an intention to do
      any
      of the foregoing, for a period of five (5) months from September 19, 2006.
      Additionally, pursuant to an Irrevocable Proxy, Laurus also gave the Company
      a
      proxy to vote all shares of Common Stock of the Company, now or in the future
      owned by Laurus to the extent such shares are issued to Laurus upon its exercise
      of its warrant to purchase 14,583,333 shares of common stock. Upon the sale
      or
      other transfer of the Shares, in whole or in part, or the assignment of the
      Warrant, the proxy shall automatically terminate (x) with respect to such sold
      or transferred shares at the time of such sale and/or transfer, or (y) with
      respect to all shares in the case of an assignment of the Warrant, at the time
      of such assignment, in each case, without any further action required by any
      person.
5
(d)
The
      Keshet Fund LP and Keshet L.P.
Pursuant
      to a letter agreement between the Company and the Keshet Fund LP and Keshet
      L.P.
      (collectively the "Keshet"), the Company agreed to issue 3,000,000 shares of
      common stock in consideration for the cancellation of all payment obligations
      arising under the convertible notes issued to Keshet by the Company.
      Additionally, the Keshet will, at the Company's expense, terminate all of its
      agreements with the Company, other than in respect of (x) indemnification and
      expense reimbursement provisions of such agreements and such other provisions
      thereof as expressly survive the payment in full of the Obligations and (y)
      any
      options and/or warrants received by Keshet from the Company.
Item
      2.01
      Completion of Acquisition or Disposition of Assets
As
      described in Item 1.01 above, pursuant to the RTI Agreement, the Company
      purchased all of the issued outstanding shares of the common stock of RTI.
RTI
      was
      founded in 1992 and provides software consulting and development services for
      the command and control of biological sensors and other Department of Defense
      requirements to United States federal governmental agencies either directly
      or
      though prime contractors of such governmental agencies RTI's proprietary
      products include SensorView, which provides clients with the capability to
      command, control and monitor multiple distributed chemical, biological, nuclear,
      explosive and hazardous material sensors.
Item
      3.02
      Unregistered Sales of Equity Securities.
As
      described in Item 1.01, the Company issued the following securities on September
      19, 2006:
(a)
The
      Company sold to Barron for $4,500,000 the Note in the principal amount of
      $4,500,000 and warrants to purchase 125,000,000 shares at $.05 per share and
      125,000,000 shares at $.125 per share. In connection with this purchase, the
      Company paid or accrued brokerage fees of $234,000 to Dragonfly Capital
      Partners, LLC , of which $134,000 was paid at closing and the remaining $100,000
      is deferred, $125,000 to Colebrook Capitalof which $76,000 was paid at closing
      and $50,000 is deferred, and $20,000 to Crescent Fund LLC , all of which is
      deferred. In addition, the Company issued to Dragonfly warrants to purchase
      4,891,000 share of common stock at $.05 per share, and 4,891,000 shares of
      common stock at an exercise price of $.125. The Company agreed to use its
      commercially reasonable efforts to include these shares in the registration
      statement covering the shares being offered by Barron; however, there is no
      provision for liquidated damages in the event that we fail to register the
      shares as required.
(b)
Pursuant
      to the RTI Agreement, the Company issued 50,000,000 shares of common stock,
      a
      $500,000 promissory note, and 1,000,000 shares of the Company's Series B
      Convertible Preferred Stock. Each share of Series B Preferred Stock will
      automatically convert into 8 1/3 shares of common Stock on January 18, 2007,
      which is the conversion rate. The conversion rate is subject to adjustment
      in
      the event any stock dividend, split and other distribution, combination of
      shares or reverse split or other recapitalization. In connection with the RTI
      transaction the company paid Watergate Holding LLC a brokerage fee in the amount
      of
$125,000.
6
(c)
Pursuant
      the Laurus Agreement, the Company issued a note in the principal amount of
      $500,000 and warrants to purchase up to 14,583,333 shares of common stock on
      a
      cashless exercise basis using an imputed exercise price of $0.01 per share.
(d)
Pursuant
      to a
      agreement with Keshet Fund LP and Keshet L.P., the Company issued 3,000,000
      shares of common stock to Keshet in satisfaction of obligations of the Company
      under convertible notes in the principal amount of $400,000 held by
      Keshet.
The
      issuances of securities described above are exempt from registration under
      the
      Securities Act of 1933, pursuant to Section 4(2) or Rule 506 of he SEC
      thereunder there as transactions not involving a public offering. Except as
      disclosed in this Item 2.01, no underwriting or brokers' fee was paid in
      connection with the issuance of any of the securities described in this Item
      3.02.
Item
      5.02
      Departure of Directors or Principal Officers; Election of Directors; appointment
      of Principal Officers.
On
      September 19, 2006, Michael Ricciardi, the founder, president and CEO of RTI
      became the Company's chief operating officer. Pursuant to his employment
      agreement, he is to receive a base salary of $165,000 per year and an annual
      bonus of not less than 30% of his then current base salary, if established
      revenue and personal goals are achieved. In addition, the Company is to granted
      an incentive stock option to purchase 1,250,000 shares of the common stock
      at an
      exercise price of $.06 per share.
Mr.
      R
icciardi
      founded RTI and served as its president and chief executive officer and led
      the
      company's technical team and operations since its inception in 1992. He has
      spent his career in software development and information management in the
      field
      of distributed and embedded systems. Prior to forming RTI, Mr. Ricciardi was
      the
      founder and principle in MAR-Computer Systems Designers, which specialized
      in
      system integration services. He also had prior experience with United
      Technologies Defense Systems, Sperry Marine Systems, Loral Advanced Projects
      and
      CACI Distributing Systems. Ricciardi is a graduate of the S.U.N.Y at Buffalo
      with a double major in applied mathematic and computer science. He also earned
      his master's degree in computer science from the New York Institute of
      Technology.
Item
      9.01
      Financial Exhibits
a)
      Financial Statements of Businesses Acquired
.
As
      permitted by Item 9.01(a)(4) of Form 8-K, the Registrant will file the
      financial statements required by Item 9.01(a)(1) of Form 8-K pursuant to an
      amendment to this Current Report on Form 8-K within seventy-one
      (71) calendar days after the date hereof.
(b)
      Pro
      Forma Financial Information
.
As
      permitted by Item 9.01(b)(2) of Form 8-K, the Registrant will file the pro
      forma financial information required by Item 9.01(b)(1) of Form 8-K
      pursuant to an amendment to this Current Report on Form 8-K within seventy-one
      (71) calendar days after the date hereof.
7
(c)
Exhibits.
Exhibit
                No.
Description
3.1
Certificated
                of Designation for Series A Convertible Preferred Stock and Series
                B
                Convertible Redeemable Preferred Stock
4.1
Series
                A Warrant
4.2
Series
                B Warrant
4.3
Series
                C Warrant
4.4
Amended
                and Restated Common Stock Purchase Warrant issued to Laurus Master
                Fund,
                LTD to Purchase up to 3,000,000 shares of Common Stock of Science
                Dynamics
                Corporation.
4.5
Amended
                and Restated Common Stock Purchase Warrant issued to Laurus Master
                Fund,
                LTD to Purchase up to 6,000,000 shares of Common Stock of Science
                Dynamics
                Corporation.
4.6
Common
                Stock Purchase Warrant issued to Laurus Master Fund, LTD to Purchase
                up to
                14,583,333 Shares of Common Stock of Science Dynamics
                Corporation.
4.7
Second
                Amended and Restated Secured Term Note from Science Dynamics Corporation
                to Laurus Master Fund, LTD.
4.8
Secured
                Promissory Note from Science Dynamics Corporation to Michael
                Ricciardi.
4.9
Science
                Dynamics Corporation 6% Convertible Subordinated Note Due May 31,
                2007.
10.1
Securities
                Purchase Agreement, between Science Dynamics Corporation and Barron
                Partners LP, dated September 15, 2006.
10.2
Stock
                Purchase Agreement by Ricciardi Technologies, Inc., its Owners, including
                Michael Ricciardi as the Owner Representative and Science Dynamics
                Corporation, dated as of September 12, 2006.
10.3
Employment
                Agreement between Science Dynamics Corporation and Michael
                Ricciardi.
10.4
Omnibus
                Amendment and Waiver between Science Dynamics Corporation and Laurus
                Master Fund, LTD, dated September 18, 2006
10.5
Amendment
                to Employment Agreement - Paul Burges
10.6
Amendment
                to Employment Agreement - Joseph Noto
99.1
Escrow
                Agreement, by and between Barron Partners L.P., Science Dynamics
                Corporation and Sichenzia Ross Friedman Ference LLP, dated as of
                August
                23, 2006.
99.2
Registration
                Rights Agreement by and among Science Dynamics Corporation and Barron
                Partners L.P., dated As of September 19, 2006.
99.3
Registration
                Rights Agreement by and among Science Dynamics Corporation Thomas
                Aylesworth, Barry Bendel, Darrell Berger, Laurence Blue, Brian Burke,
                Frank Debritz, Jeanmarie Devolite-Davis, David Godso, Donald Hargett,
                Thomas Hewitt, Markus Litscher, Joshua Presnell, Domenico Ricciardi,
                Lino
                Ricciard, Marie Ricciardi, Michael Ricciardi, Donald Upson, and Dan
                Young,
                dated January 19, 2006.
99.4
Form
                of Lock Up Agreement, executed pursuant to the Securities Purchase
                Agreement, between Science Dynamics Corporation and Barron Partners
                LP,
                dated September 15, 2006.
99.5
Pledge
                and Security Agreement made by between Science Dynamics Corporation
                in
                favor of and being delivered to Michael Ricciardi as Owner Representative,
                dated September 19, 2006.
99.6
Escrow
                Agreement by and between Science Dynamics Corporation, Ricciardi
                Technologies, Inc. and the individuals listed on Schedule 1 thereto,
                dated
                September 19, 2006.
99.7
Lockup
                Agreement from Laurus Master Fund, LTD.
99.8
Irrevocable
                Proxy
99.9
Letter
                Agreement between the Keshet fund L.P. and Keshet L.P. and Science
                Dynamics Corporation, September 19,
                2006
8
SIGNATURES
Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned hereunto
      duly authorized.
Science Dynamics
              Corporation
Date:
              September 25, 2006
/s/
              Paul Burgess
Paul Burgess, Chief Executive
              Officer
9