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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>UNITED
      STATES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>SECURITIES
      AND EXCHANGE COMMISSION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Washington,
      D.C. 20549</strong></font><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">_________________________________________________________</font><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; 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="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">Pursuant
      to Section 13 or 15(d) of the</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">Securities
      Exchange Act of 1934</font><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">___________________________________________________________________</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date
      of
      report (Date of earliest event reported): June 26, 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="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>DEBT
      RESOLVE, INC.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
      Name of Registrant as Specified in 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 style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div align="center">
      <table bgcolor="white" cellpadding="0" cellspacing="0" width="100%">

          <tr bgcolor="white">
            <td width="33%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">Delaware</font></div>
            </td>
            <td width="33%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">0-29525</font></div>
            </td>
            <td width="33%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">33-0889197</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td width="33%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">(State
                or other jurisdiction</font></div>
            </td>
            <td width="33%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">(Commission
                File Number)</font></div>
            </td>
            <td width="33%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">(IRS
                Employer</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td width="33%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">Identification
                No.)</font></div>
            </td>
            <td width="33%">&#160;</td>
            <td width="33%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">of
                incorporation)</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td width="33%">&#160;</td>
            <td width="33%">&#160;</td>
            <td width="33%">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td width="33%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">707
                Westchester Avenue, Lobby
                Level</font></div>
            </td>
            <td width="33%">&#160;</td>
            <td width="33%">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td width="33%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">White
                Plains, New York</font></div>
            </td>
            <td width="33%">&#160;</td>
            <td width="33%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">10604</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td width="33%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">(Address
                of principal executive
                offices)</font></div>
            </td>
            <td width="33%">&#160;</td>
            <td width="33%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font size="2">(Zip
                C<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ode)</font></font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td width="33%">&#160;</td>
            <td width="33%">&#160;</td>
            <td width="33%">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registrant's
      telephone number, including area code: (914) 949-5500</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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: </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -54pt; 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"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -54pt; 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 DFR
      240.14a-12) </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-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">[
      ]
      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
      Act
      (17 CFR </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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"><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">[
      ]
      Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange
      Act (17 CFR </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 4.5pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">240.13e-4(c))</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>&#160;</u></strong></font></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="3">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 54pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
                1.01.</strong></font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Entry
                into a Definitive Material Agreement</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>.</strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>General</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      June
      26, 2006, we received proceeds from a private placement of 15% senior secured
      convertible promissory notes and one 15% senior secured promissory note in
      the
      aggregate principal amount of $3,481,762, with 50% of the outstanding principal
      amount of the 15% senior secured convertible promissory notes convertible into
      3,831,101 shares of our common stock upon the closing of our proposed initial
      public offering, pursuant to a Securities Purchase Agreement attached hereto
      as
      Exhibit 10.1. As part of the private placement, we issued to the investors
      warrants to purchase 11,605,884 shares of common stock. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      proceeds from the sale of the notes and warrants will be used to pay salaries,
      occupancy expenses, selling expenses, professional fees and other operating
      expenses as well as the payment of transaction costs and related
      fees.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      have
      agreed, pursuant to a registration rights agreement described below, to register
      the shares of common stock underlying the notes and warrants with the U.S.
      Securities and Exchange Commission.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>15%
      Senior Secured Convertible Promissory Notes and 15% Senior Secured Promissory
      Note </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Conversion.</em></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">Except
      for the 15% Senior Secured Promissory Note in principal amount of $800,000
      which
      is not convertible, the principal amount under the notes is convertible into
      shares of common stock automatically in the case of a public offering of our
      common stock, in which case 50% of the outstanding principal amount under the
      notes will be converted into shares of common stock, and the remaining 50%
      of
      the outstanding principal amount and any accrued but unpaid interest under
      the
      notes will be repaid to the holders from the proceeds of such public offering.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      conversion price of the notes is 70% of the price per share of our common stock
      in a public offering. The conversion price is subject to adjustment in the
      event
      of specified dilutive or accretive events, such as stock splits and stock
      combinations. The conversion price is subject to further adjustment if, while
      the notes are outstanding, we issue any shares of our common stock or securities
      convertible or exercisable into our common stock (subject to customary
      exceptions for exchanges of securities, equity incentive plans and acquisition
      transactions) at a price per share less than the conversion price, the
      conversion price will be adjusted on a weighted-average basis, which takes
      into
      account both the lower price and the number of shares issued or issuable at
      the
      lower price.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Maturity.
      </em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      principal amount and accrued interest under the notes are payable by us upon
      the
      earlier to occur of:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">
            </td>
            <td align="left" style="width: 27pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                closing of a public offering of our common stock;
                or</font></div>
            </td>
          </tr>

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

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">
            </td>
            <td align="left" style="width: 27pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">October
                31, 2006, which date may be automatically extended until April 30,
                2007 to
                match the maturity date of our presently outstanding 7% senior convertible
                promissory notes if the maturity date of those notes is extended
                past
                October 31, 2006.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><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"><em>Interest.</em></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">The
      notes
      will receive interest at a cumulative annual rate of 15%, due and payable
      monthly in cash at a rate of 1.25% per month beginning on the first day of
      the
      first month following the closing of the offering (provided, however, that
      interest may be due and payable upon maturity at the election of the
      noteholder).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
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        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="3">
        </div>
      </div>
      <div id="HDR">
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        </div>
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Liquidation.</em></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">In
      the
      event of any liquidation, dissolution or winding up of our company, either
      voluntary or involuntary, the holders of the notes will receive, in preference
      to any distribution of any of our assets to the holders of any our other debt
      or
      equity securities, except for our previously issued 7% senior convertible
      promissory notes, an amount equal to the unpaid and unconverted principal face
      amount of their notes and any accrued and unpaid interest on the notes. The
      holders will be paid in preference to any of our unsecured creditors and will
      be
      paid pro rata in proportion to the principal amount of notes held by the holders
      if the available assets are not sufficient to repay the notes.</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"><em>Collateral</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      notes
      are collateralized with a first lien on all of our assets, as well as those
      of
      any of our subsidiaries that may be formed, including a pledge of the shares
      of
      each such subsidiaries. </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"><em>Stock
      Pledge</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      As
      additional collateral, our co-chairmen pledged the shares of our common stock
      that they personally own to secure the indebtedness. The stock pledge is a
      secondary, non-recourse liability which may be called upon only following the
      exhaustion of all legal remedies against us for collection of the </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">indebtedness</font>.</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Warrants</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
      investor was issued, for no additional consideration, three-year warrants to
      purchase that number of shares of our common stock as is equal to the principal
      face amount of the purchased notes divided by $.30. The warrants are exercisable
      commencing upon the date of effectiveness of our proposed initial public
      offering. The warrants have an exercise price per share equal to $.001, subject
      to adjustment in the event of specified dilutive or accretive events, such
      as
      stock splits or stock combinations.&#160; </font><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Registration
      Rights</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      have
      agreed to include the shares of common stock issuable upon conversion of the
      notes and exercise of the warrants in a registration statement under the
      Securities Act of 1933, subject to limitations on the investors&#8217; shares that may
      be imposed by the underwriter of a public offering. The investors also will
      receive so-called &#8220;piggyback&#8221; registration rights with respect to any securities
      that are not included in the first registration statement.</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"><strong>Lock-Up
      Agreements</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      connection with the private placements, all of the investors entered into
&#8220;lock-up agreements&#8221; with us that prohibit those investors from, directly or
      indirectly, offering, selling, pledging or otherwise transferring or disposing
      of any of the shares of our common stock underlying the notes or warrants for
      a
      period of six months following the effective date of our proposed initial public
      offering.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Private
      Placement</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      notes
      and warrants (and the shares of common stock issuable upon conversion or
      exercise thereof) will not be or have not been registered under the Securities
      Act of 1933 in reliance upon the exemption from registration afforded by Section
      4(2) and Regulation D under the Securities Act of 1933, as amended, which
      exempts transactions by an issuer not involving any public offering.
</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">All
      of
      the investors in the private placement qualified as accredited investors, as
      defined in Regulation D, in order to participate in the private placement.
      The
      notes and warrants may not be offered or sold in the United States absent
      registration or an applicable exemption from registration
      requirements.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">No
      assurance can be given that a public offering transaction will be completed,
      when it will be completed or on what terms it will be completed. The private
      placement was conducted in accordance with the provisions of Rule 155(c) under
      the Securities Act.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Capital
      Growth Financial, LLC and Maxim Group LLC served as placement agents in
      connection with the June 26, 2006 private placement of notes and warrants.
      The
      placement agents received an aggregate of $256,675 in sales commissions, plus
      warrants to purchase 314,972 shares of our common stock at an exercise price
      of
      $3.33 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 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">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="3">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certain
      holders of our short-term notes and shareholder notes agreed to apply the
      principal balance and accrued interest through June 26, 2006 of their existing
      notes into the June 26, 2006 private placement of notes and warrants. A total
      of
      $977,012 in the June 2006 private financing consisted of such transactions.
      These investors included James D. Burchetta and Charles S. Brofman, our
      co-chairmen, William M. Mooney, Jr., a director, Michael Harris, a former
      officer and director of our company, an affiliate of Capital Growth Financial,
      LLC, one of our placement agents, and an employee of Maxim Group LLC, one of
      our
      placement agents. Except as otherwise set forth in this paragraph, there are
      no
      material relationships between any of the investors who purchased notes and
      warrants and our company.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      foregoing description of the transaction is only a summary and is qualified
      in
      its entirety by reference to the form of 15% Senior Secured Convertible
      Promissory Note contained in Exhibit 4.1, form of 15% Senior Secured Promissory
      Note contained in Exhibit 4.2, form of Common Stock Purchase Warrant contained
      in Exhibit 4.3, Securities Purchase Agreement contained in Exhibit 10.1,
      Registration Rights Agreement contained in Exhibit 10.2, Security Agreement
      contained in Exhibit 10.3, Stock Pledge Agreement contained in Exhibit 10.4,
      and
      form of Lock-Up Agreement contained in Exhibit 10.5, each of which is
      incorporated herein by reference. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
      current report does not constitute an offer of any securities for
      sale.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 54pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
                2.03.</strong></font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Creation
                of a Direct Financial Obligation or an Obligation under an Off-Balance
                Sheet Arrangement of a
                Registrant.</strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      information called for by this Item 2.03 is contained in Item 1.01, which is
      incorporated herein by reference.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 54pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
                3.02.</strong></font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Unregistered
                Sales of Equity
                Securities.</strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      information called for by this Item 3.02 is contained in Item 1.01, which is
      incorporated herein by reference.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 54pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
                9.01.</strong></font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Financial
                Statements and Exhibits. </strong></font></div>
            </td>
          </tr>

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

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.1</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
                of 15% Senior Secured Convertible Promissory Note of Debt Resolve,
                Inc.
                for June 26, 2006 private
                placement.</font></div>
            </td>
          </tr>

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

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.2</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
                of 15% Senior Secured Promissory Note of Debt Resolve, Inc. for June
                26,
                2006 private placement.</font></div>
            </td>
          </tr>

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

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.3</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
                of Warrant to Purchase Common Stock of Debt Resolve, Inc. for June
                26,
                2006 private placement.</font></div>
            </td>
          </tr>

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

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Securities
                Purchase Agreement, dated as of June 26, 2006, among Debt Resolve,
                Inc.
                and each of the private placement
                subscribers.</font></div>
            </td>
          </tr>

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

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.2</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registration
                Rights Agreement, dated as of June 26, 2006, among Debt Resolve,
                Inc. and
                each of the private placement
                subscribers.</font></div>
            </td>
          </tr>

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

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.3</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Security
                Agreement, dated as of June 26, 2006, among Debt Resolve, Inc. and
                each of
                the private placement subscribers.</font></div>
            </td>
          </tr>

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

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.4</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
                Pledge Agreement, dated as of June 26, 2006, among Debt Resolve,
                Inc.,
                James D. Burchetta, Charles S. Brofman and each of the private placement
                subscribers.</font></div>
            </td>
          </tr>

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

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 36pt;">&#160;</td>
            <td>&#160;</td>
          </tr>

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

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 36pt;"><font size="2">10.5</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font></td>
            <td><font size="2">Form of investor lock-up agreement for June 26,
              2006
              private placement.</font></td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div 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">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="3">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
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      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 colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">DEBT
              RESOLVE,
              INC.</font></td>
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Date:
              June 30, 2006</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">By:&#160;&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">/s/&#160;Katherine
              A. Dering</font></td>
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              <hr style="COLOR: black" align="left" noshade size="2" width="80%"><font size="2">Katherine
              A. Dering</font></td>
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            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Chief
              Financial Officer</font></td>
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{"company-data": {"conformed-name": "DEBT RESOLVE INC", "cik": "0001106645", "assigned-sic": "7389", "irs-number": "330889197", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-29525", "film-number": "06937133"}, "business-address": {"street1": "707 WESTCHESTER AVE", "street2": "SUITE L7", "city": "WHITE PLAINS", "state": "NY", "zip": "10604", "phone": "9149495500"}, "mail-address": {"street1": "707 WESTCHESTER AVE", "street2": "SUITE L7", "city": "WHITE PLAINS", "state": "NY", "zip": "10604"}, "former-company": {"former-conformed-name": "LOMBARDIA ACQUISITION CORP", "date-changed": "20000214"}}
Unassociated Document
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): June 26, 2006
DEBT
      RESOLVE, INC.
(Exact
      Name of Registrant as Specified in Charter)
Delaware
0-29525
33-0889197
(State
                or other jurisdiction
(Commission
                File Number)
(IRS
                Employer
Identification
                No.)
of
                incorporation)
707
                Westchester Avenue, Lobby
                Level
White
                Plains, New York
10604
(Address
                of principal executive
                offices)
(Zip
                C
ode)
Registrant's
      telephone number, including area code: (914) 949-5500
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:
[
      ]
      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 DFR
      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 Definitive Material Agreement
.
General
On
      June
      26, 2006, we received proceeds from a private placement of 15% senior secured
      convertible promissory notes and one 15% senior secured promissory note in
      the
      aggregate principal amount of $3,481,762, with 50% of the outstanding principal
      amount of the 15% senior secured convertible promissory notes convertible into
      3,831,101 shares of our common stock upon the closing of our proposed initial
      public offering, pursuant to a Securities Purchase Agreement attached hereto
      as
      Exhibit 10.1. As part of the private placement, we issued to the investors
      warrants to purchase 11,605,884 shares of common stock.
The
      proceeds from the sale of the notes and warrants will be used to pay salaries,
      occupancy expenses, selling expenses, professional fees and other operating
      expenses as well as the payment of transaction costs and related
      fees.
We
      have
      agreed, pursuant to a registration rights agreement described below, to register
      the shares of common stock underlying the notes and warrants with the U.S.
      Securities and Exchange Commission.
15%
      Senior Secured Convertible Promissory Notes and 15% Senior Secured Promissory
      Note
Conversion.
Except
      for the 15% Senior Secured Promissory Note in principal amount of $800,000
      which
      is not convertible, the principal amount under the notes is convertible into
      shares of common stock automatically in the case of a public offering of our
      common stock, in which case 50% of the outstanding principal amount under the
      notes will be converted into shares of common stock, and the remaining 50%
      of
      the outstanding principal amount and any accrued but unpaid interest under
      the
      notes will be repaid to the holders from the proceeds of such public offering.
The
      conversion price of the notes is 70% of the price per share of our common stock
      in a public offering. The conversion price is subject to adjustment in the
      event
      of specified dilutive or accretive events, such as stock splits and stock
      combinations. The conversion price is subject to further adjustment if, while
      the notes are outstanding, we issue any shares of our common stock or securities
      convertible or exercisable into our common stock (subject to customary
      exceptions for exchanges of securities, equity incentive plans and acquisition
      transactions) at a price per share less than the conversion price, the
      conversion price will be adjusted on a weighted-average basis, which takes
      into
      account both the lower price and the number of shares issued or issuable at
      the
      lower price.
Maturity.
The
      principal amount and accrued interest under the notes are payable by us upon
      the
      earlier to occur of:
·
the
                closing of a public offering of our common stock;
                or
·
October
                31, 2006, which date may be automatically extended until April 30,
                2007 to
                match the maturity date of our presently outstanding 7% senior convertible
                promissory notes if the maturity date of those notes is extended
                past
                October 31, 2006.
Interest.
The
      notes
      will receive interest at a cumulative annual rate of 15%, due and payable
      monthly in cash at a rate of 1.25% per month beginning on the first day of
      the
      first month following the closing of the offering (provided, however, that
      interest may be due and payable upon maturity at the election of the
      noteholder).
Liquidation.
In
      the
      event of any liquidation, dissolution or winding up of our company, either
      voluntary or involuntary, the holders of the notes will receive, in preference
      to any distribution of any of our assets to the holders of any our other debt
      or
      equity securities, except for our previously issued 7% senior convertible
      promissory notes, an amount equal to the unpaid and unconverted principal face
      amount of their notes and any accrued and unpaid interest on the notes. The
      holders will be paid in preference to any of our unsecured creditors and will
      be
      paid pro rata in proportion to the principal amount of notes held by the holders
      if the available assets are not sufficient to repay the notes.
Collateral
.
The
      notes
      are collateralized with a first lien on all of our assets, as well as those
      of
      any of our subsidiaries that may be formed, including a pledge of the shares
      of
      each such subsidiaries.
Stock
      Pledge
.
      As
      additional collateral, our co-chairmen pledged the shares of our common stock
      that they personally own to secure the indebtedness. The stock pledge is a
      secondary, non-recourse liability which may be called upon only following the
      exhaustion of all legal remedies against us for collection of the
indebtedness
.
Warrants
Each
      investor was issued, for no additional consideration, three-year warrants to
      purchase that number of shares of our common stock as is equal to the principal
      face amount of the purchased notes divided by $.30. The warrants are exercisable
      commencing upon the date of effectiveness of our proposed initial public
      offering. The warrants have an exercise price per share equal to $.001, subject
      to adjustment in the event of specified dilutive or accretive events, such
      as
      stock splits or stock combinations.
Registration
      Rights
We
      have
      agreed to include the shares of common stock issuable upon conversion of the
      notes and exercise of the warrants in a registration statement under the
      Securities Act of 1933, subject to limitations on the investors' shares that may
      be imposed by the underwriter of a public offering. The investors also will
      receive so-called "piggyback" registration rights with respect to any securities
      that are not included in the first registration statement.
Lock-Up
      Agreements
In
      connection with the private placements, all of the investors entered into
"lock-up agreements" with us that prohibit those investors from, directly or
      indirectly, offering, selling, pledging or otherwise transferring or disposing
      of any of the shares of our common stock underlying the notes or warrants for
      a
      period of six months following the effective date of our proposed initial public
      offering.
Private
      Placement
The
      notes
      and warrants (and the shares of common stock issuable upon conversion or
      exercise thereof) will not be or have not been registered under the Securities
      Act of 1933 in reliance upon the exemption from registration afforded by Section
      4(2) and Regulation D under the Securities Act of 1933, as amended, which
      exempts transactions by an issuer not involving any public offering.
All
      of
      the investors in the private placement qualified as accredited investors, as
      defined in Regulation D, in order to participate in the private placement.
      The
      notes and warrants may not be offered or sold in the United States absent
      registration or an applicable exemption from registration
      requirements.
No
      assurance can be given that a public offering transaction will be completed,
      when it will be completed or on what terms it will be completed. The private
      placement was conducted in accordance with the provisions of Rule 155(c) under
      the Securities Act.
Capital
      Growth Financial, LLC and Maxim Group LLC served as placement agents in
      connection with the June 26, 2006 private placement of notes and warrants.
      The
      placement agents received an aggregate of $256,675 in sales commissions, plus
      warrants to purchase 314,972 shares of our common stock at an exercise price
      of
      $3.33 per share.
Certain
      holders of our short-term notes and shareholder notes agreed to apply the
      principal balance and accrued interest through June 26, 2006 of their existing
      notes into the June 26, 2006 private placement of notes and warrants. A total
      of
      $977,012 in the June 2006 private financing consisted of such transactions.
      These investors included James D. Burchetta and Charles S. Brofman, our
      co-chairmen, William M. Mooney, Jr., a director, Michael Harris, a former
      officer and director of our company, an affiliate of Capital Growth Financial,
      LLC, one of our placement agents, and an employee of Maxim Group LLC, one of
      our
      placement agents. Except as otherwise set forth in this paragraph, there are
      no
      material relationships between any of the investors who purchased notes and
      warrants and our company.
The
      foregoing description of the transaction is only a summary and is qualified
      in
      its entirety by reference to the form of 15% Senior Secured Convertible
      Promissory Note contained in Exhibit 4.1, form of 15% Senior Secured Promissory
      Note contained in Exhibit 4.2, form of Common Stock Purchase Warrant contained
      in Exhibit 4.3, Securities Purchase Agreement contained in Exhibit 10.1,
      Registration Rights Agreement contained in Exhibit 10.2, Security Agreement
      contained in Exhibit 10.3, Stock Pledge Agreement contained in Exhibit 10.4,
      and
      form of Lock-Up Agreement contained in Exhibit 10.5, each of which is
      incorporated herein by reference.
This
      current report does not constitute an offer of any securities for
      sale.
Item
                2.03.
Creation
                of a Direct Financial Obligation or an Obligation under an Off-Balance
                Sheet Arrangement of a
                Registrant.
The
      information called for by this Item 2.03 is contained in Item 1.01, which is
      incorporated herein by reference.
Item
                3.02.
Unregistered
                Sales of Equity
                Securities.
The
      information called for by this Item 3.02 is contained in Item 1.01, which is
      incorporated herein by reference.
Item
                9.01.
Financial
                Statements and Exhibits.
(d)
      Exhibits.
4.1
Form
                of 15% Senior Secured Convertible Promissory Note of Debt Resolve,
                Inc.
                for June 26, 2006 private
                placement.
4.2
Form
                of 15% Senior Secured Promissory Note of Debt Resolve, Inc. for June
                26,
                2006 private placement.
4.3
Form
                of Warrant to Purchase Common Stock of Debt Resolve, Inc. for June
                26,
                2006 private placement.
10.1
Securities
                Purchase Agreement, dated as of June 26, 2006, among Debt Resolve,
                Inc.
                and each of the private placement
                subscribers.
10.2
Registration
                Rights Agreement, dated as of June 26, 2006, among Debt Resolve,
                Inc. and
                each of the private placement
                subscribers.
10.3
Security
                Agreement, dated as of June 26, 2006, among Debt Resolve, Inc. and
                each of
                the private placement subscribers.
10.4
Stock
                Pledge Agreement, dated as of June 26, 2006, among Debt Resolve,
                Inc.,
                James D. Burchetta, Charles S. Brofman and each of the private placement
                subscribers.
10.5
Form of investor lock-up agreement for June 26,
              2006
              private placement.
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.
DEBT
              RESOLVE,
              INC.
Date:
              June 30, 2006
By:
/s/ Katherine
              A. Dering
Katherine
              A. Dering
Chief
              Financial Officer