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 <p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><a name="scotch"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">As filed with the Securities and Exchange Commission on June 26, 2007</font></b></a></p> <div style="border:none;border-bottom:double windowtext 6.0pt;padding:0pt 0pt 0pt 0pt;"> <p align="right" style="border:none;margin:0pt 0pt 12.0pt;padding:0pt;text-align:right;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Registration No. 333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p> </div>

<p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">UNITED STATES<br>
SECURITIES AND EXCHANGE COMMISSION</font></b><b><br>
WASHINGTON, D.C. 10549</b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;">FORM S-8</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="3" face="Times New Roman" style="font-size:12.0pt;">REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933</font></b></p>

<p align="center" style="margin:5.0pt 0pt 12.0pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Commission File Number 333-128526</font></b></p>

<p align="center" style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">ANDOVER MEDICAL, INC.</font></b><b><br>
</b>(Name of Small Business Issuer in its charter)</p>

<div align="center">

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:31.74%;">
  <p align="center" style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-align:center;"><!-- SET mrlNoTableShading --><b>Delaware</b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:2.38%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:31.74%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:2.38%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:31.74%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">51-0459931</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:31.74%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(State or other
  jurisdiction of<br>
  Primary Standard Industrial<br>
  incorporation or organization)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:2.38%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:31.74%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:2.38%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:31.74%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(I.R.S. Employer
  Identification No.)</font></p>
  </td>
 </tr>
</table>

</div>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">510
Turnpike Street, Suite 204<br>
N. Andover, MA 01845<br>
(978) 557-1001<br>
</font></b>(Address and telephone number of principal executive offices)</p>

<p align="center" style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Andover
Medical, Inc. 2006 Employee Stock Incentive Plan<br>
</font></b>(Full title of the plan)</p>

<p align="center" style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Edwin A. Reilly, Chief Executive
Officer<br>
510 Turnpike Street, Suite 204<br>
N. Andover, MA 01845<br>
(978) 557-1001<br>
</font></b>(Name and address of agent for service)</p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Telephone number,
including area code, of agent for service)</font></p>

<p align="center" style="margin:5.0pt 0pt 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Copies of all
communications, including all communications sent to the agent for service,
should be sent to:</font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Elliot H.
Lutzker, Esq.<br>
666 Fifth Avenue<br>
New York, NY 10103-0084<br>
Telephone: (212) 977-9700<br>
Facsimile: (212) 262-5152</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;text-align:center;text-transform:uppercase;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;text-transform:none;">CALCULATION OF REGISTRATION FEE</font></b></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="37%" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:37.22%;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><!-- SET mrlNoTableShading -->Title&nbsp;of&nbsp;each&nbsp;class&nbsp;of&nbsp;securities<br>
  to&nbsp;be&nbsp;registered</p>
  </td>
  <td width="2%" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:11.42%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Amount&nbsp;to&nbsp;be<br>
  registered</font></b></p>
  </td>
  <td width="3%" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:3.9%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="12%" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:12.94%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Proposed<br>
  maximum&nbsp;offering<br>
  price&nbsp;per&nbsp;share&nbsp;(1)</font></b></p>
  </td>
  <td width="3%" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="12%" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:12.94%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Proposed<br>
  maximum<br>
  aggregate&nbsp;offering&nbsp;<br>
  price&nbsp;(1)</font></b></p>
  </td>
  <td width="3%" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:11.6%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Amount&nbsp;of<br>
  registration&nbsp;fee</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="37%" valign="top" style="border:none;border-bottom:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:37.22%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Common Stock, par
  value, $.001 per share, to be issued pursuant to the 2006 Employee Stock
  Incentive Plan (2)</font></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;border-bottom:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:11.42%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">15,000,000</font></p>
  </td>
  <td width="3%" valign="bottom" style="border:none;border-bottom:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:3.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)</font></p>
  </td>
  <td width="12%" valign="bottom" style="border:none;border-bottom:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:12.94%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$.60</font></p>
  </td>
  <td width="3%" valign="bottom" style="border:none;border-bottom:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)</font></p>
  </td>
  <td width="12%" valign="bottom" style="border:none;border-bottom:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:12.94%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$9,000,000</font></p>
  </td>
  <td width="3%" valign="bottom" style="border:none;border-bottom:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:3.72%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)</font></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:11.6%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$276.30</font></p>
  </td>
  <td width="0%" valign="bottom" style="border:none;border-bottom:double windowtext 1.5pt;padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt 18.0pt;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Estimated solely for
purposes of calculating the registration fee pursuant to Securities Act Rule
457(h)(1), based on the last sale price of the Registrant&#146;s common stock of
$.60 on June 20, 2007 on the Over-the-Counter Bulletin Board.</p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt 18.0pt;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Together with other
awards that may be granted to participants under the Andover Medical, Inc. 2006
Employee Stock Incentive Plan (the &#147;2006 Plan&#148;), which may consist of stock
options, stock appreciation rights and restricted stock entitling the
participant to acquire such number of shares of our common stock in accordance
with terms to be established by the administrator of the 2006 Plan.</p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt 18.0pt;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>An indeterminate number
of additional shares of common stock shall be issuable pursuant to Rule 416 to
prevent dilution resulting from stock splits, stock dividends or similar
transactions and in such an event the number of shares registered shall
automatically be increased to cover the additional shares in accordance with
Rule 416 under the Securities Act.</p>


 <div style="border:none;border-bottom:double windowtext 6.0pt;padding:0pt 0pt 0pt 0pt;"> <p style="border:none;margin:0pt 0pt .0001pt;padding:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p> </div>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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<h1 align="center" style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">PART I<br>
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS</font></b></h1>

<h2 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 1.</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Plan Information</b></h2>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>General
Plan Information</h3>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The documents containing
the information specified in this Item 1 will be sent or given to employees,
directors or others as specified by Rule 428(b)(1) promulgated under the
Securities Act of 1933, as amended (the &#147;Securities Act&#148;). In accordance with
the rules and regulations of the Securities and Exchange Commission (the &#147;SEC&#148;)
and the instructions to Form S-8, such documents are not being filed with the
SEC either as part of this registration statement or as prospectus supplements
pursuant to Rule 424 but constitute (along with the documents incorporated by
reference into the registration statement pursuant to Item 3 of Part II hereof)
a prospectus that meets the requirements of Section 10(a) of the Securities
Act.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This registration
statement relates to a maximum of 15,000,000 shares of our common stock
issuable pursuant to our 2006 Plan (the &#147;Shares&#148;).</font></p>

<h2 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 2.</font></b><b><font size="1" style="font-size:3.0pt;font-weight:bold;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Registrant Information
and Employee Plan Annual Information</b></h2>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The documents containing
the information specified in this Item 2 will be sent or given to employees,
directors or others as specified by Rule 428(b). In accordance with the rules
and regulations of the SEC and the instructions to Form S-8, such documents are
not being filed either as part of this registration statement or as
prospectuses or prospectus supplements pursuant to Rule 424.</font></p>

<h4 align="center" style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">EXPLANATORY NOTE<a name="ExplanatoryNote_191859"></a></font></b></h4>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This Prospectus
constitutes a part of a registration statement on Form S-8 (the &#147;Registration
Statement&#148;) filed by the Company with the SEC under the Securities Act. This
Prospectus omits certain of the information contained in the Registration
Statement in accordance with the rules and regulations of the SEC. Reference is
hereby made to the Registration Statement and related exhibits for further
information</font></p>


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<p style="margin:0pt 0pt 12.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">with respect to the
Company and the Shares. Statements contained herein concerning the provisions
of any documents are not necessarily complete and, in each instance, reference is
made to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the SEC. Each such statement is qualified in
its entirety by such reference.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We prepared this
Registration Statement in accordance with the requirements of Form S-8 under
the Securities Act to register 15,000,000 Shares pursuant to our 2006 Plan. The
purpose of the 2006 Plan is to advance the interests of the Company and its
stockholders by providing a means of attracting and retaining employees, corporate
officers, directors, consultants and other key persons employed or retained by
the Company and its subsidiaries and affiliates.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">No person is authorized
to give any information or to make any representations other than those
contained in this Prospectus in connection with any offer to sell or sale of
the securities to which this Prospectus relates, and if given or made, such
information or representations must not be relied upon as having been
authorized.&#160; Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, imply
that there has been no change in the facts herein set forth since the date
hereof.&#160; This Prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font face="Times New Roman">2</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="font-weight:bold;margin:0pt 0pt 12.0pt;text-align:center;text-transform:uppercase;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;text-transform:none;">TABLE OF CONTENTS</font></b></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#ExplanatoryNote_191859">EXPLANATORY NOTE</a></font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#AvailabilityOfInformation_191920">AVAILABILITY OF
  INFORMATION</a></font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#ForwardlookingStatements_191924">FORWARD-LOOKING
  STATEMENTS</a></font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#SummaryInformation_191928">SUMMARY INFORMATION</a></font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#RiskFactors_191938">RISK FACTORS</a></font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#UseOfProceeds_192036">USE OF PROCEEDS</a></font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#SellingSecurityHolders_192038">SELLING SECURITY HOLDERS</a></font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#PlanOfDistribution_192144">PLAN OF DISTRIBUTION</a></font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#DescriptionOfSecurities_192147">DESCRIPTION OF
  SECURITIES</a></font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#DisclosureOfCommissionPositionOnI_192149">DISCLOSURE OF
  COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES</a></font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#LegalMatters_192152">LEGAL MATTERS</a></font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Experts_192154">EXPERTS</a></font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="92%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:92.64%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Signatures_192227">SIGNATURES</a></font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.08%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.28%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
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</table>

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<h4 align="center" style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">AVAILABILITY OF INFORMATION<a name="AvailabilityOfInformation_191920"></a></font></b></h4>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Registrant is subject
to the informational requirements of the Securities Exchange Act of 1934, as
amended (the &#147;Exchange Act&#148;), and in accordance therewith files reports, proxy
statements and other information including annual and quarterly reports on Form
10-KSB and 10-QSB (the &#147;1934 Act Filings&#148;) with the SEC. Reports and other
information filed by the Registrant can be inspected and copied at the public
reference facilities maintained at the SEC at 100 F Street, N.E., Washington,
D.C. 20549. Copies of such material can be obtained upon written request
addressed to the SEC, Public Reference Section, 100 F Street, N.E., Washington,
D.C. 20549, at prescribed rates. The SEC maintains a web site on the Internet
(http://www.sec.gov) that contains reports, proxy and information statements
and other information regarding issuers that file electronically with the SEC
through the Electronic Data Gathering, Analysis and Retrieval System (&#147;EDGAR&#148;).</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our common stock is
traded on the OTCBB under the symbol ADOV. Material filed by us can also be
inspected and copied at the offices of the NASD, located at 9509 Key West
Avenue, Rockville, MD 20850-3329.</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We will distribute annual
reports to our stockholders, including financial statements examined and
reported on by an independent registered public accounting firm. We also will
provide you without charge, upon your request, with a copy of any or all
reports, proxy statements and other documents we file with the SEC, as well as
any or all of the documents incorporated by reference in this Prospectus or the
registration statement we filed with the SEC registering for resale the shares
of our common stock being offered pursuant to this Prospectus, other than
exhibits to such documents unless such exhibits are specifically incorporated
by reference into such documents. Requests for such copies should be directed
to Edwin A. Reilly, the Company&#146;s Chief Executive Officer at Andover Medical,
Inc., 510 Turnpike Street, Suite 204, N. Andover, MA 01845; telephone: (978)
557-1001; </font>fax:
(978) 557-1004;
URL: www.andovermedical.com.</p>

<h4 align="center" style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">FORWARD-LOOKING STATEMENTS<a name="ForwardlookingStatements_191924"></a></font></b></h4>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Statements contained in
this report include &#147;forward-looking statements&#148; within the meaning of
such term in Section 27A of the Securities Act and Section 21E of the Exchange
Act.&#160; Forward-looking statements
involve known and unknown risks, uncertainties and other factors which could
cause actual financial or operating results, performances or achievements to
differ materially from those expressed or implied by the forward-looking
statements.&#160; Forward-looking
statements generally are based on our best estimates of future results,
performances or achievements, based upon current conditions and the most recent
results of the companies involved and their respective industries.&#160; Forward-looking statements may be
identified by the use of forward-looking terminology such as &#147;may,&#148; &#147;will,&#148;
&#147;could,&#148; &#147;project,&#148; &#147;expect,&#148; &#147;believe,&#148; &#147;estimate,&#148; &#147;anticipate,&#148; &#147;intend,&#148; &#147;continue,&#148;
&#147;potential,&#148; &#147;opportunity&#148; or similar terms, variations of those terms or the
negative of those terms or other variations of those terms or comparable words
or expressions.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Potential risks and
uncertainties include, among other things, such factors as:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;page-break-after:avoid;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>our ability to
raise funds;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;page-break-after:avoid;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>our business
strategies and future plans of operations;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;page-break-after:avoid;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>our ability to
identify, successfully complete and/or manage future acquisitions;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;page-break-after:avoid;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>customers&#146;
acceptance of our products;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;page-break-after:avoid;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>rapid
technological changes in the industry;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;page-break-after:avoid;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>our ability to
attract and retain qualified personnel;</p>


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<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;page-break-after:avoid;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>general economic
conditions in the United States as well as the economic conditions affecting
the industry in which we operate;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;page-break-after:avoid;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the amount of
sales of our products and services;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;page-break-after:avoid;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>our current
operating losses;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;page-break-after:avoid;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the competitive
environment within the industry in which we compete; and</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 54.0pt;page-break-after:avoid;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the other
factors and information discussed in other sections of this Prospectus and in
the documents incorporated by reference in this Prospectus.</p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Persons reading this
Prospectus should carefully consider such risks, uncertainties and other
information, disclosures and discussions which contain cautionary statements
identifying important factors that could cause actual results to differ
materially from those provided in the forward-looking statements. &#160;We undertake no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, subject to applicable law.</font></p>

<h4 align="center" style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SUMMARY INFORMATION<a name="SummaryInformation_191928"></a></font></b></h4>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The following summary is
qualified in its entirety by reference to the more detailed information
appearing elsewhere in this Prospectus or incorporated herein by
reference.&#160; Each prospective investor is
urged to read this Prospectus and the documents incorporated herein by
reference in their entirety.&#160; Investment
in the securities offered hereby involves a high degree of risk.&#160; See &#147;Risk Factors.&#148;</font></p>

<h5 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Use
of Names</font></b></h5>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Throughout this
Prospectus, the terms &#147;we,&#148; &#147;us,&#148; &#147;our,&#148; &#147;the Company&#148; or &#147;AMI&#148; refer to
Andover Medical, Inc.</font></p>

<h5 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Business</font></b></h5>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AMI is a publicly
traded company (OTCBB:ADOV) that was formed to engage in the business of
distributing procedure specific durable medical equipment (&#147;DME&#148;) and services
segments of the orthopedic, podiatric, and urological physician care markets in
the United States. DME is a specific type of medical equipment prescribed by
physicians for home use that provides therapeutic benefits or helps patients
perform tasks they would otherwise not be able to accomplish. The Company
intends to establish a nationwide distribution network and plans to offer
physicians the largest selection of competitively priced brand-name DME, and
urodynamic diagnostic and treatment products.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Orthopedics,
urology and podiatry are among the fastest growing segments in healthcare that
utilize DME products and services. The &#147;graying&#148; of the population and the
increase in the active physical lifestyle of seniors, among other factors, play
key roles in this growth. These DME products are most significantly used by
baby boomers and seniors age 65 and over. According to the U.S. Department of
Health and Human Services this senior demographic, which is expanding rapidly
both in size and in its need for services, has been increasing from
approximately 35 million people in 2000, to an estimated 40.2&nbsp;million by
2010, and eventually to an estimated 71 million people by 2030, representing
approximately 20&nbsp;percent of the U.S. population.</font></p>

<p style="margin:0pt 0pt 12.0pt 10.0pt;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Business Strategy</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The business
strategy of AMI revolves around acquiring local DME companies with sales of
between $1 million and $10 million per annum in the markets of orthopedics,
podiatry, and urology.&#160; We will then
consolidate them and build a single source provider of DME and incontinence
treatment products.&#160; On May 4, 2007, AMI
completed the acquisition of Ortho-Medical Products, Inc., a New York based
full-service company specializing in procedure specific orthopedic DME,
respiratory equipment, and orthotics</font></p>


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<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">and prosthetics.&#160; On May 11, 2007, AMI completed the
acquisition of Rainier Surgical Incorporated, headquartered in Auburn,
Washington, which specializes in the sales, service, distribution and marketing
of orthopedic DME.&#160; AMI is in
negotiations to acquire other potential target companies.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Successful growth
of AMI is predicated on its ability to acquire these already existing companies
in a &#147;roll-up&#148; and take advantage of the Company&#146;s larger scale to:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 40.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">a)</font>&nbsp;&nbsp;&nbsp;add
on new acquisitions;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 40.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">b)</font>&nbsp;&nbsp;&nbsp;secure
purchasing efficiencies;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 40.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">c)</font>&nbsp;&nbsp;&nbsp;contract
for innovative new products; and</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 40.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">d)</font>&nbsp;&nbsp;&nbsp;implement
management and operational efficiencies.</p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AMI believes the distribution
channel for these healthcare segments is currently fragmented and inefficient,
and that operating as a local independent distributor is difficult today for
various reasons, including the following:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 40.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font>&nbsp;&nbsp;&nbsp;small
independent operations have a difficult time trying to gain access to
innovative (high margin) products for distribution;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 40.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font>&nbsp;&nbsp;&nbsp;negotiations
for products to reduce the cost of goods sold is very limited; therefore,
margin enhancement is difficult;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 40.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font>&nbsp;&nbsp;&nbsp;back
office expenses are spread over a very limited revenue base; and</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 40.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font>&nbsp;&nbsp;&nbsp;little
opportunity exists for a viable exit strategy.</p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AMI intends to
offer extensive product offerings, including postoperative pain management
products, orthopedic devices, a full range of soft goods and functional knee
braces, and uro-dynamic devices and disposables. The Company&#146;s products and
services are expected to offer solutions to create overall practice management
efficiencies for health care providers.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AMI has identified
companies that target certain procedures such as post surgical care for
Anterior Cruciate Ligament (ACL) Surgery, and knee/hip replacement. These
companies offer a comprehensive array of products to aid in the recovery for a
particular procedure. This provides the physician with a single source solution
to his/her postoperative needs.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AMI intends to
establish a unified nationwide distribution network by acquiring and
consolidating in a roll-up, healthcare companies that offer physicians both a
convenient and administratively efficient way to offer patients a large
selection of competitively priced, brand-name, DMEs and urodynamic diagnostic
and treatment products. AMI intends to provide an attractive option for the
physician customer base. These products, delivered at point of service outlets
such as physicians offices, clinics/hospitals, nursing facilities, patients
homes, and retail outlets, are often prescribed by physicians and physical
therapists and qualify for third party reimbursement from insurance companies,
Medicare, Medicaid, etc..</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our medical
products and services consolidation model mirrors trends already taking place
in many industries. Currently there are several public companies that have
concentrated on consolidating different segments of the DME market:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 40.0pt;text-indent:-20.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Respiratory care</i>&#151;Lincare, Apria</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 40.0pt;text-indent:-20.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Orthotics and Prosthetics (O&amp;P)</i>&#151;Hanger
Orthopedic Group</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 40.0pt;text-indent:-20.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i>Manufacturing of bracing and orthopedic soft goods</i>&#151;DJ
Orthopedics, OSSUR, Orthofix</p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">One of the
services AMI currently provides for physicians is the <i>stock and bill</i> method of inventory control
and payment, eliminating the need to have patients referred to a separate
orthopedics and prosthetics facility to purchase DME products prescribed by the
physician. Under such an arrangement, AMI handles inventory control and
billing, while the physicians&#146; practices derive the benefits of having products
available on site with little administrative involvement. In addition, AMI will
offer products directly to the physicians and patients.</font></p>


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<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Recent
Developments</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On May 11, 2007,
AMI and its wholly-owned subsidiaries entered into a $5,000,000 Credit
Agreement with TD BANKNORTH, N.A. (the &#147;<i>Credit
Agreement&#148;)</i>.&#160; The borrowing
capacity available to the Company under the Credit Agreement consists of notes
representing a two year $4,000,000 Senior Secured Revolving Credit Facility and
a two year $1,000,000 Senior Secured Revolving Acquisition Loan Facility which
converts into a three-year term loan.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All borrowings
under the Credit Agreement will bear interest at either (i) a rate equal to
LIBOR, plus an Applicable Margin (as defined in the Credit Agreement), or (ii)
a Base Rate (as defined in the Credit Agreement) plus an Applicable Margin.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AMI and each of
its wholly-owned subsidiaries, Ortho-Medical Products, Inc., Rainier Surgical
Incorporated, Rainer Acquisition Corp. and Andover Management Services, Inc.
are borrowers under the Credit Agreement and their obligations are guaranteed
by AMI and all of AMI&#146;s subsidiaries.&#160;
Each Company&#146;s assets are pledged as security under the Credit
Agreement.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Credit
Agreement was initially utilized to replace commitments and outstandings under
Rainier Surgical Incorporated&#146;s existing credit facility with Heritage
Bank.&#160; Subsequent proceeds of the Credit
Agreement are to be used for acquisition, working capital and for general corporate
purposes.</font></p>

<h5 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Our
History</font></b></h5>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On August 31,
2006, the Company, formerly known as Snow &amp; Sail Sports, Inc. (&#147;Snow &amp;
Sail&#148;), entered into a reorganization agreement (the &#147;Reorganization Agreement&#148;)
pursuant to which the Company spun off its existing business, replaced its
management and changed its corporate name and business (the &#147;Transaction&#148;).&#160; The following steps were taken in connection
with the Transaction:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the Company
effected a 28.5-for-1 forward stock split whereby 460,000 pre-forward split
registered shares of its common stock held by approximately 42 non-affiliates
(the &#147;Non-Affiliates&#148;) of the Company were converted into 13,110,000
post-forward split registered shares (the &#147;Post-Forward Split Registered Shares&#148;);</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>all of the
Company&#146;s issued and outstanding shares of registered and restricted common
stock (other than the Post-Forward Split Registered Shares) were cancelled;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>in exchange for
$10 and other valuable consideration, pursuant to the Reorganization Agreement,
the Company issued an aggregate of 10,000,000 restricted shares of its common
stock in connection with the Transaction to management and certain affiliates.
As part of the Reorganization Agreement, the principals of Andover Management
Services, Inc. transferred to the Company all right, title and interest to the
new business of Andover, including, but not limited to, letters of intent for
acquisitions, an office lease, office furniture and cash.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Paul F.
Tetreault and John P. Greeley, representing all of the former officers and directors
of the Company prior to the Transaction, resigned and were replaced by Edwin A.
Reilly and Robert G. Coffill, Jr.; Mr. Reilly was appointed the President,
Chief Operating Officer, acting Chief Financial Officer, and Secretary of the
Company, and Mr. Coffill was elected to serve, at that time, as its sole
director;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the Company&#146;s
former business (including all of its assets and liabilities), which involved
providing one-day ski trips within the New England area, was spun off prior to
the Transaction to former management;</p>


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<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the Company
issued an aggregate of 2,500,000 incentive stock options to purchase an
equivalent number of shares of its restricted common stock to the Company&#146;s
then sole officer, Edwin A. Reilly (1,250,000), and its then and sole director,
Robert G. Coffill, Jr. (1,250,000); and</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>the Company changed its name from
Snow &amp; Sail Sports, Inc. to Andover Medical, Inc.</p>

<h4 align="center" style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">RISK FACTORS<a name="RiskFactors_191938"></a></font></b></h4>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">The securities offered hereby are
speculative, involve a high degree of risk and should only be purchased by
persons who can afford to lose their entire investment.&#160; Prospective purchasers should carefully
consider, among other things, the following risk factors relating to the
business of the Company and the Offering prior to making any investment.&#160; These risk factors are summary in nature and
are not intended to be exhaustive or set forth all the possible risks and
uncertainties that may be associated with purchasing or owning this
investment.&#160; You are strongly urged to consult
with professional financial advisors, accountants, and lawyers in evaluating
this investment and making an independent and informed decision about whether
or not to invest your money in the Offering.</font></i></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Risks
Related to Our Business</font></b></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We recently went public and have a limited
operating history upon which you can base an investment decision.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We became a public company on August&nbsp;31, 2006 via
a reverse merger. Consequently, the Company has a very limited operating
history upon which you can make an investment decision, or upon which we can
accurately forecast future sales. You should, therefore, consider us subject to
all of the business risks and uncertainties associated with a new business. The
likelihood of our success must be considered in light of the expenses,
difficulties and delays frequently encountered in connection with the formation
and initial operations of a new and unproven business.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Our business strategy depends upon our
ability to complete and manage acquisitions of other companies.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our business strategy is to grow through acquisitions,
which depends on our ability to identify, negotiate, complete and integrate
suitable acquisitions. See &#147;Summary Information -Business Strategy.&#148;&nbsp; Even
if we complete acquisitions we may experience:</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 42.0pt;text-indent:-22.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">difficulties in integrating any acquired
companies, personnel and products into our existing business;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 42.0pt;text-indent:-22.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">delays in realizing the benefits of the
acquired company or products;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 42.0pt;text-indent:-22.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">significant demands on the Company&#146;s
management, technical, financial and other resources;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 42.0pt;text-indent:-22.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">diversion of our management&#146;s time and
attention to unexpected problems;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 42.0pt;text-indent:-22.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">higher costs of integration than we
anticipated;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 42.0pt;text-indent:-22.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">unanticipated liabilities; and/or</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 42.0pt;text-indent:-22.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">difficulties in retaining key employees
of the acquired businesses who are necessary to manage these acquisitions.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We have no assurance that our proposed
acquisition strategy will be successful.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our business strategy is to expand our operations
through strategic acquisitions. We are currently engaged in acquiring certain
orthopedic, podiatric, and urology related service entities. While we acquired
two operating companies in May 2007, we may not be successful in our overall
acquisition strategy for any number of reasons. These reasons include, but are
not limited to, our ability to obtain funding in excess of the approximately
$7,300,000 in gross proceeds we recently raised in private equity financings
(collectively, the &#147;Offering&#148;); complete the necessary due diligence, to our
satisfaction; agree on all material terms of definitive purchase agreements;
obtain audited financial statements consistent with the</font></p>


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<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">unaudited
financial statements, or otherwise consummate the acquisition of any other
entities.&#160; If we are unable to complete
additional acquisitions in the orthopedic, podiatric and urology markets we
will be unable to achieve our business strategy of becoming a single source of
DME in these fields.</font></p>

<p style="margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We may not be able
to manage acquisitions and achieve profitability.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We face substantial challenges with both acquisitions
made to date and potential acquisitions. These include the integration of the
acquired entities with the operations, technologies and management of the
Company and the attendant risks associated with such acquisitions, including
possible unanticipated liabilities, unanticipated costs, diversion of
management attention and loss of personnel.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We cannot assure you that we will successfully
integrate or profitably manage any acquired businesses, that our continued
business will achieve sales levels, profitability, efficiencies or synergies
that justify the acquisitions, or that the acquisitions will result in
increased earnings for us in any future period. Successful integration of the
Company&#146;s operations will depend on, among other things, our ability to
attract, hire and retain skilled management and other personnel, none of which
can be assured. To manage growth effectively, we will need to invest in
development of enhancements to existing services, implement operational,
financial and management information systems, procedures and controls, and
integrate our personnel and operations with those of an acquired company.&#160; We may not be able to manage the combined
operations effectively, and failure to do so could have a material adverse
effect on the Company&#146;s business, financial condition and/or operating results.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In the case of debt funding, there can be no assurance
that we will have sufficient income from operations of such acquired companies
to satisfy the debt payments, which may then be adversely affected.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We have only limited working capital and
the proceeds of the Company&#146;s private financing to date will not be sufficient,
without additional financing, to complete additional acquisitions contemplated
herein.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We raised gross proceeds of approximately $7.3
million, from equity offerings with the net proceeds used for working capital
and acquisitions. The Company anticipates, however, that based on its current
proposed plans and assumptions, it will have to raise additional financings to
meet its anticipated working capital needs and cash needs for future
acquisitions. There can be no assurance that the Warrants provided in the
Offering will be exercised. The Company has no binding arrangements with
respect to additional financings. Furthermore, it is not anticipated that
existing security holders will provide any of the Company&#146;s future financing
requirements. In addition, while the Company is negotiating to obtain debt
financing for acquisitions such financing may not be available to the Company,
if so required, on commercially reasonable terms, or at all. Any inability to
obtain additional financing when needed and on acceptable terms could have a
material adverse effect upon the Company&#146;s operations, including the
possibility of requiring the Company to curtail its acquisition strategy.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We may be subject to potential litigation
claims in connection with the appointment of Frank Magliochetti as the Company&#146;s
Chairman of the Board and Chief Executive Officer that could be costly and time
consuming and could divert our management and key personnel from business
operations.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In connection with the sale of a prior business, Frank
Magliochetti, the Company&#146;s former Chairman of the Board and Chief Executive
Officer (who served in that capacity from December&nbsp;20, 2006 until his
resignation on March&nbsp;9, 2007), entered into a non-compete agreement with
Otto Bock HealthCare L.P. (&#147;Otto Bock&#148;). Any litigation claims against the
Company concerning that non-compete agreement could be costly and time
consuming and could divert our management and key personnel from business
operations. The non-compete agreement provides that Mr.&nbsp;Magliochetti may
not engage in any business competitive with the business of Otto Bock for a
period of four years. In February&nbsp;2007, the Company was advised by the
attorneys for Otto Bock that the Company and its CEO, Edwin Reilly, acted in
concert with Mr.&nbsp;Magliochetti in breach of his non-compete agreement. Otto
Bock claims, among other things, that the Company plans to compete directly in
the market for continuous passive motion products and services and in the market
for pain management braces, and is doing business with prohibited customers.
The Company and Messrs.&nbsp;Magliochetti and Reilly deny any and all
wrongdoing. In view of Mr.&nbsp;Magliochetti&#146;s resignation and his
non-disclosure of any confidential information prior to such resignation, the
Company does not believe this claim has any merit. Although the Company has not
been sued by Otto Bock, and</font></p>


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<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mr.&nbsp;Magliochetti
and the Company are attempting to resolve the matter, there can be no assurance
that the Company will not be sued by Otto Bock, which could have a material
adverse effect on the Company&#146;s operations.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Our financial statements have been prepared
assuming that the Company will continue as a going concern.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our audited financial statements for the fiscal year ended
December 31, 2006, have been prepared assuming the Company will continue as a
going concern. As discussed in Note 9 to the financial statements, as of
December 31, 2006, the Company had not yet generated revenues and was still
developing its planned principal operations. These factors raise substantial
doubt about the Company&#146;s ability to continue as a going concern. Our
independent registered public accounting firm has included an explanatory
paragraph expressing doubt about our ability to continue as a going concern in
their audit report for the fiscal year ended December&nbsp;31, 2006.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We rely heavily on our relationships with
orthopedic professionals, agents and distributors for marketing our services
and our failure to maintain these relationships could adversely affect our
business.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The sales of our services depend significantly on the
prescription or recommendation of such services by orthopedic and other
healthcare professionals. Our future success depends on our ability to maintain
good relations between such healthcare professions and the management of the
companies we acquire. Our failure to maintain good relationships could have an
adverse effect on our business.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We operate in a very competitive business
environment.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The non-operative orthopedic and podiatry markets are
highly competitive and fragmented.&nbsp;Our competitors include several large,
diversified general orthopedic products companies and numerous smaller niche
companies. Some of our competitors are included in our vendor base. We may not
be able to offer products or services similar to or more desirable than our
competitors, or at a price comparable to that of our competitors. We may be
unable to compete if we fail to develop, license or acquire and market new
products and new services enhancements. Many of our competitors have greater
financial resources, more widely accepted products, stronger name recognition
and larger sales and/or distribution networks than we do.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Our quarterly operating results are subject
to substantial fluctuations and you should not rely on them as an indication of
our future results.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We do not have an operating history of our own.&#160; Until we are able to integrate our initial
acquisitions, which will take at least one year, our quarterly operating
results are expected to vary significantly. Our results will depend upon a
combination of factors, many of which are beyond our control.&nbsp;These
factors include:</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 42.0pt;text-indent:-22.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">our ability to meet the demand for our
services;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 42.0pt;text-indent:-22.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">our ability to develop, introduce and
market new and enhanced products and versions of our services on a timely
basis;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 42.0pt;text-indent:-22.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">the impact of any acquisitions that occur
in a quarter;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 42.0pt;text-indent:-22.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">changes in pricing policies by us and our
competitors and reimbursement rates by third-party payors, including government
healthcare agencies and private insurers;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 42.0pt;text-indent:-22.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">changes in the treatment practices of
orthopedic and podiatry clinics and their allied healthcare professionals; and</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 42.0pt;text-indent:-22.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">the timing of significant orders and
shipments.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Accordingly, our quarterly sales and operating results
may vary significantly in the future and period-to-period comparisons of our
results of operations may not be meaningful and should not be relied upon as
indications of future performance.&nbsp;We cannot assure you that our sales
will increase or be sustained in future periods or that we will be profitable
in any future period.</font></p>


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<p style="margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Our business plan
relies on certain assumptions for the market for our services, which, if
incorrect, may adversely affect our profitability.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We believe that various demographics and industry specific
trends will help drive growth in the rehabilitation markets, including:</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-34.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">a growing elderly population with broad
medical coverage, increased disposable income and longer life expectancy;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-34.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">a growing emphasis on physical fitness,
leisure sports and conditioning, which has led to increased injuries,
especially among women; and</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-34.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">the increasing awareness and use of
non-invasive devices for prevention, treatment and rehabilitation purposes.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">These demographics and trends are beyond our
control.&nbsp;The projected demand for our services could materially differ
from actual demand if our assumptions regarding these factors prove to be
incorrect or do not materialize or if alternative treatments to those offered
by our services gain widespread acceptance. Any one of these outcomes could
have an adverse effect on our operations.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We have limited suppliers for some of our
products which makes us susceptible to supply shortages and could disrupt our
operations.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We do not manufacture the products that we provide to
our clients. Instead, we rely on manufacturers and other third party suppliers
for these products. If any of these parties are unable or unwilling to supply
these products to us, we would be unable to distribute our products until a
replacement supplier could be found. We cannot guarantee that a replacement
supplier could be found on reasonable terms or in a timely manner. Any
interruption in our ability to distribute our products could cause our business
to be unsuccessful and the value of investors&#146; investment in us may decline.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We may be adversely affected if we lose the
services of any member of our senior management, our board of directors, or key
employees.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We are dependent on the continued services of our
senior management team and Board of Directors who are expected to make
significant contributions to our growth and success.&nbsp;The loss of any one
or more of these persons could have a material adverse effect on us.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We do not believe the departure of Frank Magliochetti
will negatively impact our ability to carry out our acquisition strategy.&#160; As reflected by the durable medical equipment
and specifically orthopedic devices and soft goods experience of Edwin Reilly
set forth below under &#147;Management,&#148; the Board of Directors fully believes that
Mr. Reilly will be able to carry out our business strategy in order that we may
succeed. Nevertheless, in the event that we are able to complete future
acquisitions, the Company will be dependent on its ability to retain the
services of management of such companies. In addition, we could be adversely
affected if any key employees of acquired companies who do not have employment
nor non-competition agreements with us, went to work for one of our
competitors. Our future success depends on our ability to identify, attract, train
and motivate other highly skilled personnel. Failure to do so may adversely
affect future results.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Recent changes in coverage and
reimbursement policies for our products by Medicare and third-party payors or
reductions in reimbursement rates for our products could adversely affect our
business and results of operations.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Products are sold by our acquisition companies through
clinics and physicians who may receive reimbursement for the cost of our
products from private third-party payors, Medicare, Medicaid and other
governmental programs. Our ability to sell our products successfully depends,
in part, on the purchasing and practice patterns of clinics and physicians, who
are influenced by cost containment measures taken by third-party
payors.&nbsp;Limitations or reductions in third-party reimbursement for our
products can have a material adverse effect on our sales and profitability.</font></p>


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<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Congress and state legislatures consider reforms in
the healthcare industry that may modify reimbursement methodologies and practices,
including controls on healthcare spending of the Medicare and Medicaid
programs.&nbsp;It is not clear at this time what proposals, if any, will be
adopted or, if adopted, what effect the proposals would have on our
business.&nbsp;Many private health insurance plans model their coverage and
reimbursement policies after Medicare policies.&nbsp;Congressional or
regulatory measures that reduce Medicare reimbursement rates could cause
private health insurance plans to reduce their reimbursement rates for our
products, which could have an adverse effect on our ability to sell our
products or cause our orthopedic professional customers to prescribe less
expensive products introduced by us and our competitors.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Medicare Prescription Drug, Improvement, and
Modernization Act of 2003, or Medicare Modernization Act, mandated a number of
changes in the Medicare payment methodology and conditions for coverage of
orthotic devices and durable medical equipment. These changes include a freeze
in payments for durable medical equipment from 2004 through 2008, a payment
freeze for orthotic devices from 2004 through 2006, competitive bidding
requirements, and new clinical conditions for payment and quality standards.
The changes affect our products generally, although specific products may be
affected by some but not all of the Medicare Modernization Act&#146;s provisions.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Under competitive bidding, which will be phased in
beginning in 2007, Medicare will change its approach to reimbursing certain
items and services covered by Medicare from the current fee schedule amount to
an amount established through a bidding process between the government and
suppliers.&nbsp;Competitive bidding may reduce the number of suppliers
providing certain items and services to Medicare beneficiaries and the amounts
paid for such items and services.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Also, Medicare payments in regions not subject to
competitive bidding may be reduced using payment information from regions
subject to competitive bidding.&nbsp;Any payment reductions or the inclusion of
certain of our orthotic devices in competitive bidding, in addition to the
other changes to Medicare reimbursement and standards contained in the Medicare
Modernization Act, could have a material adverse effect on our results of
operations.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition, on February&nbsp;11, 2003, the Centers
for Medicare and Medicaid Services, or CMS, the agency responsible for
implementing the Medicare program, made effective an interim final regulation
implementing &#147;inherent reasonableness&#148; authority, which allows adjustments to
payment amounts for certain items and services covered by Medicare when the
existing payment amount is determined to be grossly excessive or grossly
deficient.&nbsp;The regulation lists factors that may be used to determine
whether an existing reimbursement rate is grossly excessive or grossly
deficient and to determine what a realistic and equitable payment amount is.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Also, under the regulation, a payment amount will not
be considered grossly excessive or grossly deficient if an overall payment
adjustment of less than fifteen percent would be necessary to produce a
realistic and equitable payment amount.&nbsp;The regulation remains in effect
after the Medicare Modernization Act, although the new legislation precludes
the use of inherent reasonableness authority for devices subject to competitive
bidding.&nbsp;When using the inherent reasonableness authority, CMS may reduce
reimbursement levels for certain items and services, which could have a
material adverse effect on our results of operations.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We cannot assure you that third-party reimbursement
for our products will continue to be available or at what rate such products
will be reimbursed.&nbsp;Failure by users of our products to obtain sufficient
reimbursement from third-party payors for our products or adverse changes in
governmental and private payors&#146; policies toward reimbursement for our products
could have a material adverse effect on our results of operations.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Healthcare reform, managed care and buying
groups have put downward pressure on our prices.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A further result of managed care and the related
pressure on costs has been the advent of buying groups in the United
States.&nbsp;Such buying groups enter into preferred supplier arrangements with
one or more manufacturers of orthopedic or other medical products in return for
price discounts.&nbsp;The extent to which such buying groups are able to obtain
compliance by their members with such preferred supplier</font></p>


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<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">agreements
varies considerably depending on the particular buying groups.&nbsp;We believe
that our ability to maintain our existing arrangements will be important to our
future success and the growth of our revenues.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition, we may not be able to obtain supplier
commitments from major vendors, in which case we could lose significant
potential sales.&nbsp;On the other hand, if we receive preferred supplier
commitments from particular vendors which do not deliver high levels of
compliance, we may not be able to offset the negative impact of lower per unit
prices or lower margins with any increases in unit sales or in market share.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Proposed laws that would limit the types of
orthopedic professionals, who can fit, sell or seek reimbursement for our
products, could, if adopted, adversely affect our business.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In response to pressure from orthopedic practitioners,
Congress and state legislatures have from time to time considered proposals
that limit the types of orthopedic professionals who can fit and/or sell our
orthotic device products or who can seek reimbursement for them.&nbsp;Several
states have adopted legislation that imposes certification or licensing requirements
on the measuring, fitting and adjusting of certain orthotic devices.&nbsp;Some
of these laws have exemptions for manufacturers&#146; representatives.&nbsp;Other
laws apply to the activities of such representatives.&nbsp;Other states may be
considering similar legislation.&nbsp;Such laws could limit our potential
customers in those jurisdictions in which such legislation or regulations are
enacted by limiting the measuring and fitting of these devices to certain
licensed individuals.&nbsp;We may not be successful in opposing their adoption
and, therefore, such laws could have a material adverse effect on our business.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition, efforts have been made to establish such
requirements at the federal level for the Medicare program.&nbsp;Most recently,
in 2000 Congress passed the Medicare, Medicaid, and SCHIP Benefits Improvement
and Protection Act of 2000 (BIPA).&nbsp;BIPA contains a provision requiring as
a condition for payment by the Medicare program that certain certification or
licensing requirements be met for individuals and suppliers furnishing certain,
but not all, custom-fabricated orthotic devices.&nbsp;CMS is in the process of
implementing this requirement, and we cannot predict the effect its
implementation or implementation of other such laws will have on our business.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We are subject to numerous federal and
state regulations, noncompliance with which could result in significant
penalties that could have a material adverse effect on our business.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We are subject to various federal and state laws
pertaining to healthcare fraud and abuse, including anti-kickback laws and
physician self-referral laws (commonly known as &#147;Stark&#148; laws). Violations of
these laws are punishable by criminal and/or civil sanctions, including, in
some instances, imprisonment and exclusion from participation in federal and
state healthcare programs, including Medicare, Medicaid, Veterans
Administration health programs and TRICARE, which could have a material adverse
effect on our business.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Because of the far-reaching nature of these laws, we
may be required to alter one or more of our practices. Healthcare fraud and
abuse regulations are complex and even minor, inadvertent irregularities in
submissions can potentially give rise to claims that a fraud and abuse law or
regulation has been violated. Any violations of these laws or regulations could
have a material adverse effect on our business, financial condition and results
of operations. If there is a change in law, regulation or administrative or
judicial interpretations, we may have to change our business practices or our
existing business practices could be challenged as unlawful.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Audits or denials of claims by government
agencies could reduce our revenue or profits.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As part of the business structure of our acquired
entities, we submit claims and receive payments directly from Medicare,
Medicaid programs and private payors. Therefore, we are subject to extensive
government regulation, including requirements for maintaining certain
documentation to support our claims. Medicare contractors and Medicaid agencies
periodically conduct pre- and post-payment review and other audits of claims,
and will be under increasing pressure to scrutinize more closely healthcare
claims and supporting documentation generally. We periodically could receive
requests for documentation during the governmental audits of individual claims.
We cannot assure that such review and/or similar audits of our claims will not
result in material delays in payment, as well as material recoupment or
denials, which could reduce net revenues and profitability, nor the exclusion
from participation in the Medicare and</font></p>


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<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Medicaid
programs or from participation on the provider panel of a private payor.
Private payors from time to time conduct similar reviews and audits.</font></p>

<p style="margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We are subject to
substantial government regulation, which could materially, adversely affect our
business.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The production and marketing of some of our products
and our ongoing research and development, pre-clinical testing and clinical
trial activities are subject to extensive regulation and review by numerous
governmental authorities both in the United States and abroad. The
pre-marketing approval process can be particularly expensive, uncertain, and
lengthy, and a number of devices for which U.S.&nbsp;Food&nbsp;&amp; Drug
Administration (&#147;FDA&#148;) approval has been sought by other companies have never
been approved for marketing. In addition to testing and approval procedures,
extensive regulations also govern marketing, manufacturing, distribution,
labeling, and record keeping. If we do not comply with applicable regulatory
requirements, violations could result in warning letters, non-approval,
suspensions of regulatory approvals, civil penalties and criminal fines,
product seizures and recalls, operating restrictions, injunctions, and criminal
prosecution.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Delays in or rejection of FDA or other government
entity approval of our new products may also adversely affect our business.
Such delays or rejection may be encountered due to, among other reasons,
government or regulatory delays, lack of efficacy during clinical trials,
unforeseen safety issues, slower-than-expected rate of patient recruitment for
clinical trials, inability to follow patients after treatment in clinical
trials, inconsistencies between early clinical trial results and results
obtained in later clinical trials, varying interpretations of data generated by
clinical trials, or changes in regulatory policy during the period of product
development in the United States and abroad. In the United States, there has
been a continuing trend of more stringent FDA oversight in product clearance
and enforcement activities, causing medical products manufacturers to
experience longer approval cycles, more uncertainty, greater risk, and higher
expenses. Even if regulatory approval of a product is granted, this approval may
entail limitations on uses for which a previously approved product may be
labeled and promoted. It is possible, for example, that we may not receive FDA
approval to market already approved products for broader or different
applications or to market updated products that represent extensions of our
basic technology.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Periodically, legislative or regulatory proposals are
introduced that could alter the review and approval process relating to medical
products. It is possible that the FDA will issue additional regulations further
restricting the sale of our present or proposed products. Any change in
legislation or regulations that govern the review and approval process relating
to our current and future products could make it more difficult and costly to obtain
approval for new products, or to produce, market, and distribute existing
products.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Undisclosed liabilities associated with our
reorganization.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">There may be undisclosed liabilities that were either
misrepresented to us or that we were unable to discover prior to the
reorganization and the spin off of the Company&#146;s former business, which
involved providing one-day ski trips within the New England area. The former
principal of Snow&nbsp;&amp; Sail Sports,&nbsp;Inc. could fail to indemnify the
Company against potential liabilities associated with the former business in
breach of the terms of the reorganization agreement. Although we would fully
pursue all legal recourse against such persons, there can be no assurance we
will be held harmless, in which case our operations may be adversely affected.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Our principal stockholders may have the
ability to control almost all matters of the Company.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Meyers Associates, LP, our financial advisor and an
NASD member firm, and its president own 3,000,000 shares of Common Stock (with
options to acquire an additional 4,325,498 shares pursuant to a unit purchase
option), and other principal stockholders of the Company own an additional
approximately 7,835,000 shares, all of which are restricted. These 10,835,000
shares represent approximately 37% of the 29,328,995 million issued and
outstanding shares of Common Stock of the Company as of the date of this
prospectus. In addition, certain of our officers, directors and former members
of management have received grants for options to purchase 6,600,000 shares of
Common Stock, in the aggregate. Therefore, management and our financial adviser
will have influence over the election of the Company&#146;s directors and</font></p>


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<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">will be
able to control the outcome of other issues submitted to stockholders of the Company.
This includes their ability to amend the Certificate of Incorporation, approve
a merger or consolidation of the Company with another company or approve the
sale of all or substantially all of the assets of the Company without the
agreement of minority stockholders.</font></p>

<p style="margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We do not
anticipate paying dividends in the foreseeable future, and the lack of
dividends may have a negative effect on the price of our common stock.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We currently intend to retain our future earnings, if
any, to support operations and to finance expansion and therefore, we do not
anticipate paying any cash dividends on our common stock in the foreseeable
future.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We are subject to critical accounting
policies, and we may interpret or implement required policies incorrectly.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We follow generally accepted accounting principles for
the United States in preparing our financial statements. As part of this work,
we must make many estimates and judgments about future events. These affect the
value of the assets and liabilities, contingent assets and liabilities, and
revenue and expenses that we report in our financial statements. We believe
these estimates and judgments are reasonable, and we make them in accordance
with our accounting policies based on information available at the time.
However, actual results could differ from our estimates, and this could require
us to record adjustments to expenses or revenues that could be material to our
financial position and results of operations in future periods.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Our Common Stock may experience significant
volatility in the future, which substantially increases the risk of loss to
persons owning our common stock.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Because of the limited trading market for our common
stock, and because of the potential for significant price volatility,
stockholders may not be able to sell their shares of Common Stock when they
desire to do so. The inability to sell shares in a rapidly declining market may
substantially increase the risk of loss as a result of such illiquidity and the
price for our common stock may suffer greater declines in the event of
significant price volatility.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Our Common Stock is traded on the OTC
Bulletin Board, which may be detrimental to investors.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our shares of Common Stock are currently traded on the
OTC Bulletin Board. Stocks traded on the OTC Bulletin Board generally have
limited trading volume and exhibit a wide spread between the bid/ask
quotations. We cannot predict whether a more active market for our common stock
will develop in the future. In the absence of an active trading market:
investors may have difficulty buying and selling our common stock or obtaining
market quotations; market visibility for our common stock may be limited; and a
lack of visibility for our common stock may have a depressive effect on the
market price for our common stock.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Our Common Stock is subject to restrictions
on sales by broker-dealers and penny stock rules, which may be detrimental to
investors.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our Common Stock is subject to Rules&nbsp;15g-1
through 15g-9 under the Securities Exchange Act of 1934, as amended (the &#147;Exchange
Act&#148;), which imposes certain sales practice requirements on broker-dealers who
sell our common stock to persons other than established customers and &#147;accredited
investors&#148; (as defined in Rule&nbsp;501(a)&nbsp;of the Securities Act). For
transactions covered by this rule, a broker-dealer must make a special
suitability determination for the purchaser and have received the purchaser&#146;s
written consent to the transaction prior to the sale. This rule&nbsp;adversely
affects the ability of broker-dealers to sell our common stock and purchasers
of our common stock to sell their shares of our common stock.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Additionally, our common stock is subject to SEC
regulations applicable to &#147;penny stocks.&#148; Penny stocks include any non-Nasdaq
equity security that has a market price of less than $5.00 per share, subject
to certain exceptions. The regulations require that prior to any non-exempt
buy/sell transaction in a penny stock, a disclosure schedule proscribed by the
SEC relating to the penny stock market must be delivered by</font></p>


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<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">a broker-dealer
to the purchaser of such penny stock. This disclosure must include the amount
of commissions payable to both the broker-dealer and the registered
representative and current price quotations for our common stock. The
regulations also require that monthly statements be sent to holders of a penny
stock that disclose recent price information for the penny stock and
information of the limited market for penny stocks. These requirements
adversely affect the market liquidity of our common stock.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">A significant number of our shares are
eligible for sale, and their sale could depress the market price of our stock.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sales of a significant number of shares of Common
Stock in the public market pursuant to this prospectus could harm the market
price of our common stock. Pursuant to a registration statement declared
effective by the SEC in January&nbsp;2006, as converted by a 28.5 for 1 forward
stock split reported in the Company&#146;s Current Report on Form&nbsp;8-K filed on
September&nbsp;7, 2006, an aggregate of 13,110,000 shares of Common Stock were
registered and are free-trading. As additional shares of our common stock
become available for resale in the public market pursuant to this prospectus
and otherwise, the supply of our common stock will increase, which could
decrease its price. Some or all of the shares of our common stock may be
offered from time to time in the open market pursuant to Rule&nbsp;144, and
these sales may have a depressive effect on the market for the shares of our
common stock. In general, a person who has held restricted shares for a period
of one year may, upon filing with the SEC a notification on Form&nbsp;144, sell
into the market our common stock in an amount equal to the greater of 1% of the
outstanding shares or, if listed on Nasdaq or another national securities
exchange, the average weekly number of shares sold in the last four weeks prior
to such sale. Such sales may be repeated once every three months, and any of
the restricted shares may be sold by a non-affiliate after they have been held
two years.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">There is not now, and there may not ever be
an active market for our common stock.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Although the our common stock is quoted on the OTCBB,
trading of our common stock is limited. There can be no assurance a more active
market for such common stock will develop. Accordingly, investors must
therefore bear the economic risk of an investment in our company for an
indefinite period of time. Even if an active market develops for our shares,
Rule&nbsp;144 promulgated under the Securities Act (&#147;Rule&nbsp;144&#148;), which
provides for an exemption from the registration requirements under the
Securities Act under certain conditions, requires, among other conditions, a
one-year holding period prior to the resale (in limited amounts) of securities
acquired in a non-public offering without having to satisfy the registration
requirements under the Securities Act. There can be no assurance that we will
fulfill our reporting requirements in the future under the Exchange Act or
disseminate to the public any current financial or other information concerning
us, as is required by Rule&nbsp;144 as part of the conditions of its
availability.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Preferred stock as an anti-takeover device.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We are authorized to issue 1,000,000 shares of
preferred stock, $.001 par value. The 5,612.8 shares of&nbsp;Series&nbsp;A
Preferred Stock and 1,700 shares of Series B Preferred Stock each convertible
into 2,857 shares of Common Stock (an aggregate of approximately
20,893,000&nbsp;shares) issued pursuant to the Offering are the first two
series of Preferred Stock to be issued. The preferred stock may be issued in
series from time to time with such designation, voting and other rights,
preferences and limitations as our Board of Directors may determine by
resolution. Unless the nature of a particular transaction and applicable
statutes require such approval, the Board of Directors has the authority to
issue these shares without stockholder approval subject to approval of the
holders of our preferred stock. The issuance of preferred stock may have the
effect of delaying or preventing a change in control of the Company without any
further action by our stockholders.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">The offering price of our common stock
being offered by the selling security holders pursuant to this Prospectus may
not bear any relationship to our value or assets.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Shares offered hereby will be sold on a delayed or continuous
basis by selling security holders other then the Company.&#160; The price at which our common stock may be
offered in the marketplace does not necessarily bear any relationship to our
value or our assets.</font></p>


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<h4 align="center" style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">USE OF PROCEEDS<a name="UseOfProceeds_192036"></a></font></b></h4>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We will not receive any
proceeds from the sale of our common stock by the selling security holders
under this Prospectus. All such proceeds will be received by the selling
security holders.&#160; However, we expect to
use the proceeds from the exercise of the options and other restricted stock
awards for working capital and other general corporate purposes.</font></p>

<h4 align="center" style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SELLING SECURITY HOLDERS<a name="SellingSecurityHolders_192038"></a></font></b></h4>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Shares offered by
this Prospectus are being registered for reoffers and resales by the selling
security holders, who have acquired or may acquire such Shares pursuant to the
exercise of options or other stock awards granted under our 2006 Plan.&#160; The selling security holders named below, who
are officers and directors of the Company, may resell all, a portion or none of
such Shares from time to time.&#160; In
addition, certain non-affiliates of AMI, not named, may also use this
Prospectus to sell Shares acquired by them pursuant to the exercise of options
or other awards granted to them under our 2006 Plan.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company at the time
of filing this Prospectus did not satisfy the registrant requirements for use
of Form S-3.&#160; Therefore, the following
limitation shall apply with respect to both control securities and restricted
securities:&#160; the amount of securities to
be reoffered or resold by means of the reoffer prospectus, by each person, and
any other person with whom he or she is acting in concert for the purpose of
selling securities of the Registrant, may not exceed, during any three-month
period, the amount specified in Rule 144(e).</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The following table sets
forth, with respect to each security holder, based upon information available
to us as of June 7, 2007, the number of shares of common stock beneficially
owned before the sale of the Shares offered by this Prospectus; the number of
Shares to be sold; and the percent of the outstanding shares of common stock
owned before the sale of the common stock offered by this Prospectus.</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="39%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:39.8%;">
  <p align="left" style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Name&nbsp;of&nbsp;Beneficial&nbsp;Owner</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="12%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.58%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Title&nbsp;of&nbsp;Class</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.58%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.52%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Total&nbsp;Number&nbsp;of<br>
  Shares&nbsp;Owned<br>
  Beneficially(1)</font></b></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.3%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.92%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Number&nbsp;of<br>
  Shares&nbsp;Being<br>
  Offered&nbsp;for<br>
  Resale</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.34%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Percent&nbsp;of<br>
  Class<br>
  Before&nbsp;Sale(1)</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.58%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="39%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:39.8%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Edwin A.
  Reilly(2)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Common Stock</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.52%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,788,172</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.3%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.92%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,950,000</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.34%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.8</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.8%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Robert G.
  Coffill,&nbsp;Jr.(2)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Common Stock</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.52%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,371,428</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.3%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(4)(9)</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.92%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,475,000</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.34%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.5</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.8%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James
  Shanahan(2)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Common Stock</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.52%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">193,750</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.3%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(5)</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.92%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">225,000</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.34%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">*</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.8%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Marshall
  Sterman(2)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Common Stock</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.52%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">50,000</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.3%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(9)</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.92%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">225,000</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.34%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">*</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.8%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Robert A.
  Baron(2)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Common Stock</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.52%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">50,000</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.3%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(9)</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.92%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">225,000</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.34%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">*</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.8%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Frank
  Magliochetti(6)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Common Stock</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.52%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5,500,000</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.3%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(7)(8)</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.92%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,500,000</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.34%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">17.3</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.8%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total number of shares
  owned by directors and officers as a group (5 persons)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.58%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Common Stock</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.52%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,403,350</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.3%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)(4)(5)(9)</font></p>
  </td>
  <td width="9%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.92%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6,600,000</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">11.1</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<div style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><hr size="1" width="160" noshade color="black" align="left" style="width:120.0pt;"></div>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">*</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Less
than 1% of the issued and outstanding shares.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Except
as otherwise noted in the footnotes to this table, the named person owns
directly and exercises sole voting and investment power over the shares listed
as beneficially owned by such person. Includes any securities that such person
has the right to acquire within sixty days pursuant to options, warrants,
conversion privileges or other rights.&#160;
On June 7, 2007, there were 29,328,995 shares of our common stock issued
and outstanding. As of that date, (i)&nbsp;15,000,000 shares of Common Stock
were reserved for issuance under our 2006 Plan of which 6,375,000 options had
been granted, in the aggregate; and (ii)&nbsp;approximately 20,893,000 shares
of our common stock were reserved for issuance pursuant to conversion of
preferred stock and approximately 46,638,000 shares reserved for issuance
pursuant to exercise of warrants to purchase common stock.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The
mailing address of this person is 514 Turnpike Street, Ste. 204, N. Andover, MA
01845.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Includes
1,716,672 shares of Common Stock underlying stock options held by this person
that are exercisable within the next 60 days; however, does not include 233,328
shares of Common Stock</p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font face="Times New Roman">17</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt 20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">underlying stock options that are not currently exercisable within the
next 60 days which shares vest through December&nbsp;20, 2007.</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(4)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Includes
1,300,000 shares of Common Stock underlying stock options that are held by this
person that are exercisable within the next 60 days; however, does not include
175,750 shares of Common Stock underlying stock options that are not currently
exercisable within the next 60 days of which shares vest over the period ending
on December&nbsp;20, 2009.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(5)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Includes
43,750 shares of Common Stock underlying stock options that are held by this
person that are exercisable within the next 60 days; however, does not include 181,250
shares of Common Stock underlying stock options that are not currently
exercisable.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(6)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The
mailing address of this person is 61 Mill Pond, North Andover, MA 01845.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(7)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Includes
3,000,000 shares of Common Stock which Mr.&nbsp;Magliochetti agreed to
previously transfer in March&nbsp;2007 to an independent trust or foundation
over which shares he disclaims any beneficial ownership.&#160; Does not include 2,000,000 shares transferred
by Mr.&nbsp;Magliochetti to two irrevocable trusts for his two daughters over
which shares Mr.&nbsp;Magliochetti disclaims beneficial ownership. Peter S. Johnson,&nbsp;Esq.,
is the trustee who holds voting and dispositive power with respect to the
2,000,000 shares of Common Stock.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(8)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Pursuant
to his employment agreement, dated December&nbsp;20, 2006, Frank Magliochetti
received options to purchase 6,500,000 shares at market price which vested on
January&nbsp;19, 2007. Following his resignation from the Company,
Mr.&nbsp;Magliochetti agreed to and rescinded options to purchase
4&nbsp;million shares of common stock.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(9)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Pursuant
to the 2006 Plan, as amended, Robert G. Cofill,&nbsp;Jr., Marshall Sterman and
Robert A. Baron each were granted options to purchase 225,000 shares of Common
Stock that vest in 36 equal installments ending on December&nbsp;20, 2009.</p>

<h4 align="center" style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">PLAN OF DISTRIBUTION<a name="PlanOfDistribution_192144"></a></font></b></h4>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Shares may be sold or
transferred for value by the selling security holders, or by pledgees, donees,
transferees or other successors in interest to the selling security holders, in
one or more transactions on the OTCBB maintained by the NASD (or any successor
stock exchange), in negotiated transactions or in a combination of such methods
of sale, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at prices otherwise negotiated.&#160; The selling security holders may effect such
transactions by selling the shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the selling security holders and/or the
purchasers of the shares for whom such broker-dealers may act as agent (which
compensation may be less than or in excess of customary commissions).&#160; The selling security holders, and any
broker-dealers that participate in the distribution of the Shares, may be
deemed to be &#147;underwriters&#148; within the meaning of Section 2(11) of the
Securities Act, and any commissions received by them and any profit on the
resale of the Shares sold by them may be deemed to be underwriting discounts
and commissions under the Securities Act.&#160;
All selling and other expenses incurred by individual selling security
holders will be borne by such selling security holders.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Upon our being notified
by a selling security holder that he has acquired Shares under this Prospectus
or any material arrangement has been entered into with a broker or dealer for
the sale of Shares through a secondary distribution, or a purchase by a broker
or dealer, we will file a prospectus supplement, if required, pursuant to Rule
424(b) under the Securities Act, disclosing (a) the name of each of such
selling security holder and the participating broker-dealers, (b) the number of
Shares involved, (c) the price at which such Shares are being sold, (d) the
commissions paid or the discounts or concessions allowed to such
broker-dealers, (e) where applicable, that such broker-dealers did not conduct
any investigation to verify the information set out or incorporated by
reference in this Prospectus, as supplemented, and (f) other facts material to
the transaction.</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font face="Times New Roman">18</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In addition to any such
number of Shares sold hereunder, a selling security holder may, at the same
time, sell any shares of common stock, including the Shares offered by this
Prospectus, owned by such person in compliance with all of the requirements of
Rule 144 under the Securities Act, regardless of whether such shares are
covered by this Prospectus.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">There is no assurance
that any of the selling security holders will sell any or all of the Shares
offered by this Prospectus.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We will pay all expenses
in connection with this offering, other than commissions and discounts of
underwriters, dealers or agents.</font></p>

<h4 align="center" style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">DESCRIPTION OF SECURITIES<a name="DescriptionOfSecurities_192147"></a></font></b></h4>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The following summary of
the terms of our common stock offered hereby does not purport to be complete
and is qualified in its entirety by reference to the applicable provisions of
Delaware law, our Certificate of Incorporation and our By-Laws, as amended.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As set forth in our
Certificate of Incorporation, we currently have authorized capital of
100,000,000 shares of which 99,000,000 shares have been designated as common
stock, par value $.001 per share (&#147;Common Stock&#148;) and 1,000,000 shares as
preferred stock, par value $.001 per share (&#147;Preferred Stock&#148;).&#160; As of June 22, 2007, there were 29,328,995
shares of Common Stock issued and outstanding.&#160;
There are 5,612.8 shares of Series A Preferred Stock and 1,700 shares of
Series B Preferred Stock issued and outstanding each convertible into 2,857
shares of Common Stock, or an aggregate of approximately 20,893,000 shares.</font></p>

<p style="margin:0pt 0pt 12.0pt 10.0pt;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Common Stock</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The holders of
Common Stock are entitled to one vote for each share held of record on all
matters to be voted on by stockholders. There is no cumulative voting with
respect to the election of directors, with the result that the holders of more
than 50% of the shares voting for the election of directors can elect all of
the directors then up for election. The holders of Common Stock are entitled to
receive ratably such dividends when, as and if declared by the Board of
Directors out of funds legally available therefore. In the event of
liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to share ratably in all assets remaining which are available
for distribution to them after payment of liabilities and after provision has
been made for each class of stock, if any, having preference over the Common
Stock. Holders of Common Stock, as such, have no conversion, preemptive or
other subscription rights, and there are no redemption provisions applicable to
the Common Stock. All of the outstanding shares of Common Stock are, and the
shares of Common Stock offered hereby are validly issued, fully paid and non-assessable.</font></p>

<p style="margin:0pt 0pt 12.0pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Dividends</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In the fiscal year
ended December&nbsp;31, 2006, we did not pay any cash dividends on our common
stock or preferred stock. We do not intend on paying any dividends on our
common stock in the foreseeable future. The decision to pay dividends on our
common stock will depend on our situation with regard to profitability, cash
availability and credit line restrictions.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Transfer
Agent</font></b></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The transfer agent for
our common stock is Continental Stock Transfer &amp; Trust Company, 17 Battery
Place, 8</font><font size="1" style="font-size:6.5pt;position:relative;top:-3.0pt;">th</font>&#160;Floor, New York, NY 10004.</p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font face="Times New Roman">19</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<h4 align="center" style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES<a name="DisclosureOfCommissionPositionOnI_192149"></a></font></b></h4>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of AMI, the SEC has
expressed its opinion that such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.&#160; In the event that a claim for indemnification
against such liabilities (other than the payment by AMI of expenses incurred or
paid by a director, officer or controlling person of AMI in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the shares being registered, AMI
will, unless in the opinion of our counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by us is against public policy as
expressed in the Securities Act and we will be governed by the final
adjudication of such issue.</font></p>

<h4 align="center" style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">LEGAL MATTERS<a name="LegalMatters_192152"></a></font></b></h4>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The validity of the
shares of our common stock being offered for sale pursuant to this Prospectus
has been passed upon for us by Phillips Nizer LLP, 666 Fifth Avenue, New York,
NY 10103.</font></p>

<h4 align="center" style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">EXPERTS<a name="Experts_192154"></a></font></b></h4>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our consolidated
financial statements for the fiscal year ending December 31, 2006, have been
included in this Prospectus and in this Registration Statement in reliance upon
the report of Mantyla, McReynolds, LLC, independent registered public
accounting firm, on their audit of our financial statements given on authority
of this firm as an expert in accounting and auditing.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PROSPECTIVE INVESTORS MAY
RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE PROSPECTIVE INVESTORS WITH DIFFERENT OR ADDITIONAL
INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT SEEKING AN OFFER
TO BUY IN ANY JURISDICTION WHERE SUCH OFFER, OR SALE IS NOT PERMITTED. THE
INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT ONLY AS OF THE DATE OF THIS
PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR ANY SALE
OF THESE SHARES.</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font face="Times New Roman">20</font></p>
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<h1 align="center" style="font-weight:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">PART II</font></b></h1>

<h1 align="center" style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">INFORMATION
REQUIRED IN THE REGISTRATION STATEMENT</font></b></h1>

<h2 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 3.</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font>Incorporation of Documents by
Reference.</b></h2>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;The SEC allows us
to &#147;incorporate by reference&#148; information into this Registration Statement,
which means that we can disclose important information to you by referring you
to another document filed separately with the SEC. The information incorporated
by reference is deemed to be part of this Registration Statement, except for
any information superseded by information in this Registration Statement.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;The following
documents filed by our Company with the SEC are incorporated herein by
reference:</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The
description of our common stock contained in the Registration Statement on Form
SB-2 (SEC file number 333-128526), initially filed with the SEC on September
22, 2005, including all amendments and reports for the purpose of updating such
description;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our
Quarterly Report on Form 10-QSB for the fiscal quarter ended March 31, 2007,
filed on May 15, 2007;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our
Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, filed
on March 30, 2007;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our
Current Report on Form 8-K filed on May 14, 2007;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our
Current Report on Form 8-K, filed on May 10, 2007;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our
Current Report on Form 8-K, filed on April 6, 2007;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our
Current Report on Form 8-K, filed on March 26, 2007;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our
Current Report on Form 8-K, filed on March 9, 2007; and</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Our
Current Report on Form 8-K, filed on February 15, 2007.</p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All documents that we
subsequently file pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act, prior to the filing of a post-effective amendment indicating that all of
the securities offered pursuant to this Registration Statement have been sold
or deregistering all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents. Any statement contained in a
document incorporated by reference in this Registration Statement shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained in this Registration Statement or in
any subsequently filed document that is also incorporated by reference in this
Registration Statement modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">You may read and copy any
reports, statements or other information we have filed at the SEC&#146;s Public
Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the Public Reference Rooms.
Our filings are also available on the Internet at the SEC&#146;s website at
http:\\www.sec.gov.</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">II-1</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<h2 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item
4.</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font>Description
of Securities</b></h2>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;We are registering
15,000,000 shares of our common stock pursuant to our 2006 Plan.&#160; Stock options are exercisable for a period of
up to 10 years (or five years in the case of an Incentive Stock Option granted
to a &#147;10% holder&#148; for purposes of Section 422 of the Internal Revenue Code of
1986, as amended) at a price and on a vesting schedule to be determined by our
Board of Directors at the time of the grant of the options.</font></p>

<h2 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item
5.</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font>Interests
of Named Experts and Counsel.</b></h2>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;Not Applicable.</font></p>

<h2 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item
6.</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font>Indemnification
of Directors and Officers.</b></h2>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;The following
charter provisions and statutes are the only charter provisions and statutes
known to the Registrant that insure or indemnify a controlling person, director
or officer of the registrant in any manner against liability which he or she
may incur in his or her capacity as such.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;Article NINTH and
Article TENTH of the Registrant&#146;s Certificate of Incorporation provides that:</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;&#147;NINTH:&#160; The personal liability of the directors of
the Corporation is hereby eliminated to the fullest extent permitted by the
provisions of paragraph 7 of subsection (b) of Section 102 of the General
Corporation Law of the State of Delaware as the same may be amended and
supplemented.&#160; No amendment or repeal of
this Article NINTH shall apply to or have any effect on the liability or
alleged liability of any director of this Corporation for or with respect to
any acts or omissions of such director occurring prior to such amendment or
repeal.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;TENTH:&#160; The Corporation shall to the fullest extent
permitted by Section 145 of the Delaware General Corporation Law of the State
of Delaware, as authorized by the Delaware General Corporation Law, as the same
may be amended and supplemented, indemnify any and all persons whom it shall have
power to indemnify under said section from and against any and all of the
expenses, liabilities or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any By-Law, agreement, vote of stockholders or disinterested Directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall inure to the benefit of
the heirs, executors and administrators of such a person.&#148;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;Delaware General
Corporation Law (the &#147;DGCL&#148;), Section 102(b)(7), enables a corporation in its
original certificate of incorporation, or an amendment thereto validly approved
by stockholders, to eliminate or limit personal liability of a director to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, provided that such provision shall not eliminate or limit
the liability of a director: (i) for any breach of the director&#146;s duty of
loyalty to the corporation or its stockholders; (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law; (iii) for any unlawful payment of dividends or stock purchase or
redemption under section 174 of DGCL; or (iv) for any transaction from which
the director derived an improper personal benefit.&#160; Our Amended and Restated Certificate of
Incorporation, as amended, eliminates the liability of directors to the extent
permitted by Section 102(b)(7) of the DGCL.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;In addition,
Section 145 of the DGCL which provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in right
of the corporation) by reason of the fact that the person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or other enterprise, against expenses (including attorneys&#146; fees),
judgments, fines and amounts paid in settlement that are actually and
reasonably incurred by the person in</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">II-2</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">connection with such
action, suit or proceeding, if the person acted in good faith and reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.&#160; A
similar standard is applicable in the case of derivative actions, except that
indemnification only extends to expenses (including attorneys&#146; fees) incurred
in connection with defense or settlement of such action, and no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the court determines that such person is entitled to indemnity
despite the adjudication of liability.&#160;
The statute provides that it is not exclusive of other indemnification
that may be granted by a corporation&#146;s by-laws, agreement, vote of stockholders
or disinterested directors or otherwise.&#160;
Our Certificate of Incorporation provides for such indemnification of
our directors and officers as permitted by Delaware law.</font></p>

<h2 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item
7.</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font>Exemption
from Registration Claimed.</b></h2>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;Not Applicable.</font></p>

<h2 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item
8.</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font>Exhibits.</b></h2>

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;font-family:Times New Roman;margin-left:51.0pt;">
 <tr style="page-break-inside:avoid;">
  <td width="60" valign="top" style="padding:0pt .7pt 0pt 0pt;width:45.0pt;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --><!-- SET mrlHTMLTableLeft -->4.1</p>
  </td>
  <td width="12" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="531" valign="top" style="padding:0pt .7pt 0pt 0pt;width:398.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2006 Employee Stock Incentive Plan, as amended**</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="60" valign="top" style="padding:0pt .7pt 0pt 0pt;width:45.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="531" valign="top" style="padding:0pt .7pt 0pt 0pt;width:398.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="60" valign="top" style="padding:0pt .7pt 0pt 0pt;width:45.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.2</font></p>
  </td>
  <td width="12" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="531" valign="top" style="padding:0pt .7pt 0pt 0pt;width:398.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Form of Non-Qualified Stock Option Agreement (2006
  Plan)**</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="60" valign="top" style="padding:0pt .7pt 0pt 0pt;width:45.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="531" valign="top" style="padding:0pt .7pt 0pt 0pt;width:398.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="60" valign="top" style="padding:0pt .7pt 0pt 0pt;width:45.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.3</font></p>
  </td>
  <td width="12" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="531" valign="top" style="padding:0pt .7pt 0pt 0pt;width:398.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Form of Incentive Stock Option Agreement (2006
  Plan)**</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="60" valign="top" style="padding:0pt .7pt 0pt 0pt;width:45.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="531" valign="top" style="padding:0pt .7pt 0pt 0pt;width:398.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="60" valign="top" style="padding:0pt .7pt 0pt 0pt;width:45.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.1</font></p>
  </td>
  <td width="12" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="531" valign="top" style="padding:0pt .7pt 0pt 0pt;width:398.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Opinion of Phillips Nizer LLP**</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="60" valign="top" style="padding:0pt .7pt 0pt 0pt;width:45.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="531" valign="top" style="padding:0pt .7pt 0pt 0pt;width:398.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="60" valign="top" style="padding:0pt .7pt 0pt 0pt;width:45.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">23.1</font></p>
  </td>
  <td width="12" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="531" valign="top" style="padding:0pt .7pt 0pt 0pt;width:398.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Consent of Phillips Nizer LLP**</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="60" valign="top" style="padding:0pt .7pt 0pt 0pt;width:45.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="531" valign="top" style="padding:0pt .7pt 0pt 0pt;width:398.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="60" valign="top" style="padding:0pt .7pt 0pt 0pt;width:45.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">23.2</font></p>
  </td>
  <td width="12" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.0pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="531" valign="top" style="padding:0pt .7pt 0pt 0pt;width:398.15pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Consent of Mantyla, McReynolds, LLC**</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<div style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><hr size="1" width="160" noshade color="black" align="left" style="width:120.0pt;"></div>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">** Filed with this
Registration Statement.</font></p>

<h2 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0pt 0pt 12.0pt 36.0pt;page-break-after:avoid;text-indent:-36.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item
9.</font></b><b><font size="1" style="font-size:8.5pt;font-weight:bold;">&#160;&#160;&#160; </font>Undertakings.</b></h2>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0pt 0pt 12.0pt 72.0pt;page-break-after:avoid;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;(a)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>We hereby undertake:</h3>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>&nbsp;To
file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 72.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(i)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font> to
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933, as amended;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 72.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(ii)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>to
reflect in the prospectus any facts or events arising after the effective date
of this Registration Statement (or the most recent post-effective amendment
hereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in this Registration Statement.&#160; Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the SEC pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more
than 20% change in the maximum aggregate offering price set forth in the &#147;Calculation
of Registration Fee&#148; table in the effective registration statement; and</p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">II-3</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 72.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(iii)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>to
include any material information with respect to the plan of distribution not
previously disclosed in this Registration Statement or any material change to
such information in this Registration Statement;</p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PROVIDED, HOWEVER, that
undertakings set forth in paragraphs (i) and (ii) of above do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the SEC
by the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this Registration
Statement.</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>That, for
the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at the time shall be deemed to be the initial bona fide offering thereof.</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>To remove
from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.</p>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0pt 0pt 12.0pt 72.0pt;page-break-after:avoid;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>We hereby undertake
that, for purposes of determining any liability under the Securities Act of
1933, each filing of our annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan&#146;s
annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.</h3>

<h3 style="font-family:Times New Roman;font-size:10.0pt;font-weight:normal;margin:0pt 0pt 12.0pt 72.0pt;page-break-after:avoid;text-indent:-36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and persons controlling our company pursuant
to the foregoing provisions, or otherwise, we have been advised that in the
opinion of the SEC such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by our company of expenses incurred or paid by a director, officer or
controlling person of our company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, our company will, unless in
the opinion of our counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by us is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.</h3>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">II-4</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<h4 align="center" style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SIGNATURES<a name="Signatures_192227"></a></font></b></h4>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In accordance with the
requirements of the Securities Act, the Registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements of filing
on Form S-8 and authorized this Registration Statement to be signed on its
behalf by the undersigned, in N. Andover, MA on June &nbsp;26, 2007.</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="55%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:55.74%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="44%" colspan="3" valign="top" style="padding:0pt .7pt 0pt 0pt;width:44.26%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">ANDOVER MEDICAL, INC.</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="55%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:55.74%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="44%" colspan="3" valign="top" style="padding:0pt .7pt 0pt 0pt;width:44.26%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="55%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:55.74%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.7%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="35%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:35.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Edwin A. Reilly</font></p>
  </td>
  <td width="5%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:5.2%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="55%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:55.74%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.7%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="40%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:40.56%;">
  <p style="margin:0pt 0pt .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Edwin A. Reilly, Chairman of the Board, Chief<br>
  Executive Officer, Chief Financial Officer and<br>
  Secretary</font></i></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In accordance with the
requirements of the Securities Act, this Registration Statement was signed by
the following persons in the capacities and on the dates stated.</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="28%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:28.86%;">
  <p align="left" style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:left;"><!-- SET mrlNoTableShading -->Signature</p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="52%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:52.52%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Title</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="13%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:13.88%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Date</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="28%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:28.86%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman"><font style="font-size:10.0pt;">/s/ </font>Edwin A. Reilly</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="52%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:52.52%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="13%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:13.88%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="28%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:28.86%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Edwin A. Reilly</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:52.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chairman of the Board and Chief Executive Officer
  (Principal Executive Officer), Chief Financial Officer (Principal Financial
  and Accounting Officer), Chief Operating Officer and Secretary</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:13.88%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">June &nbsp;26, 2007</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="28%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:28.86%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:52.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:13.88%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="28%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:28.86%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Robert G.
  Coffill, Jr.</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:52.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:13.88%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="28%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:28.86%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Robert G.
  Coffill, Jr.</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:52.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:13.88%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">June &nbsp;26, 2007</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="28%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:28.86%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:52.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:13.88%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="28%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:28.86%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Marshall S.
  Sterman</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:52.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:13.88%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="28%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:28.86%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Marshall S.
  Sterman</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:52.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:13.88%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">June &nbsp;26, 2007</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="28%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:28.86%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:52.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:13.88%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="28%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:28.86%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Robert A. Baron</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:52.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:13.88%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="28%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:28.86%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Robert A. Baron</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="52%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:52.52%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:13.88%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">June &nbsp;26, 2007</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="margin:24.0pt 0pt 12.0pt;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit Index</font></u></b></p>

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;font-family:Times New Roman;">
 <tr style="page-break-inside:avoid;">
  <td width="97" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:72.6pt;">
  <p align="left" style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:left;"><!-- SET mrlHTMLTableLeft --><!-- SET mrlNoTableShading -->Exhibit Number</p>
  </td>
  <td width="14" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.2pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="562" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:421.8pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Description</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="97" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:72.6pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.2</font></p>
  </td>
  <td width="14" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.2pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="562" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:421.8pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Form of NQSO Agreement (2006 Plan)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="97" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.6pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.3</font></p>
  </td>
  <td width="14" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.2pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="562" valign="top" style="padding:0pt .7pt 0pt 0pt;width:421.8pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Form of ISO Agreement (2006 Plan)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="97" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.6pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.1</font></p>
  </td>
  <td width="14" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.2pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="562" valign="top" style="padding:0pt .7pt 0pt 0pt;width:421.8pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Opinion of Phillips Nizer LLP</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="97" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.6pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">23.1</font></p>
  </td>
  <td width="14" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.2pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="562" valign="top" style="padding:0pt .7pt 0pt 0pt;width:421.8pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Consent of Phillips Nizer LLP</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="97" valign="top" style="padding:0pt .7pt 0pt 0pt;width:72.6pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">23.2</font></p>
  </td>
  <td width="14" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.2pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="562" valign="top" style="padding:0pt .7pt 0pt 0pt;width:421.8pt;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Consent of Mantyla, McReynolds, LLC</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">II-5</font></p>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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<br clear="all" style="page-break-before:always;">
<div style="font-family:Times New Roman;">


<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit
Index</font></u></b></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.66%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"><!-- SET mrlNoTableShading -->4.1</p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:88.56%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2006 Employee Stock Incentive Plan as amended</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.66%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:88.56%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.66%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.2</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:88.56%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Form of Non-Qualified Stock Option Agreement (2006
  Plan)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.66%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:88.56%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.66%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.3</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:88.56%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Form of Incentive Stock Option Agreement (2006 Plan)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.66%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:88.56%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.66%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.1</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:88.56%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Opinion of Phillips Nizer LLP (contained in Exhibit
  5.1)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.66%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:88.56%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.66%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">23.1</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:88.56%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Consent of Phillips Nizer LL</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.66%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:88.56%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.66%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">23.2</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:88.56%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Consent of Mantyla, McReynolds, LLC</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">II-6</font></p>
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{"company-data": {"conformed-name": "Andover Medical, Inc.", "cik": "0001339256", "assigned-sic": "3842", "irs-number": "510459931", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-144052", "film-number": "07941062"}, "business-address": {"street1": "510 TURNPIKE STREET", "street2": "STE 204", "city": "N. ANDOVER", "state": "MA", "zip": "01845", "phone": "978-557-1001"}, "mail-address": {"street1": "510 TURNPIKE STREET", "street2": "STE 204", "city": "N. ANDOVER", "state": "MA", "zip": "01845"}, "former-company": [{"former-conformed-name": "Andover Medical, Inc.,", "date-changed": "20061023"}, {"former-conformed-name": "Snow & Sail Sports,Inc.", "date-changed": "20050920"}]}
As filed with the Securities and Exchange Commission on June 26, 2007
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 10549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
Commission File Number 333-128526
ANDOVER MEDICAL, INC.
(Name of Small Business Issuer in its charter)
Delaware
51-0459931
(State or other
  jurisdiction of
Primary Standard Industrial
incorporation or organization)
(I.R.S. Employer
  Identification No.)
510
Turnpike Street, Suite 204
N. Andover, MA 01845
(978) 557-1001
(Address and telephone number of principal executive offices)
Andover
Medical, Inc. 2006 Employee Stock Incentive Plan
(Full title of the plan)
Edwin A. Reilly, Chief Executive
Officer
510 Turnpike Street, Suite 204
N. Andover, MA 01845
(978) 557-1001
(Name and address of agent for service)
(Telephone number,
including area code, of agent for service)
Copies of all
communications, including all communications sent to the agent for service,
should be sent to:
Elliot H.
Lutzker, Esq.
666 Fifth Avenue
New York, NY 10103-0084
Telephone: (212) 977-9700
Facsimile: (212) 262-5152
CALCULATION OF REGISTRATION FEE
Title of each class of securities
to be registered
Amount to be
registered
Proposed
maximum offering
price per share (1)
Proposed
maximum
aggregate offering
price (1)
Amount of
registration fee
Common Stock, par
  value, $.001 per share, to be issued pursuant to the 2006 Employee Stock
  Incentive Plan (2)
15,000,000
(3)
$.60
(1)
$9,000,000
(1)
$276.30
(1)
Estimated solely for
purposes of calculating the registration fee pursuant to Securities Act Rule
457(h)(1), based on the last sale price of the Registrant's common stock of
$.60 on June 20, 2007 on the Over-the-Counter Bulletin Board.
(2)
Together with other
awards that may be granted to participants under the Andover Medical, Inc. 2006
Employee Stock Incentive Plan (the "2006 Plan"), which may consist of stock
options, stock appreciation rights and restricted stock entitling the
participant to acquire such number of shares of our common stock in accordance
with terms to be established by the administrator of the 2006 Plan.
(3)
An indeterminate number
of additional shares of common stock shall be issuable pursuant to Rule 416 to
prevent dilution resulting from stock splits, stock dividends or similar
transactions and in such an event the number of shares registered shall
automatically be increased to cover the additional shares in accordance with
Rule 416 under the Securities Act.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1.
Plan Information
(a)
General
Plan Information
The documents containing
the information specified in this Item 1 will be sent or given to employees,
directors or others as specified by Rule 428(b)(1) promulgated under the
Securities Act of 1933, as amended (the "Securities Act"). In accordance with
the rules and regulations of the Securities and Exchange Commission (the "SEC")
and the instructions to Form S-8, such documents are not being filed with the
SEC either as part of this registration statement or as prospectus supplements
pursuant to Rule 424 but constitute (along with the documents incorporated by
reference into the registration statement pursuant to Item 3 of Part II hereof)
a prospectus that meets the requirements of Section 10(a) of the Securities
Act.
This registration
statement relates to a maximum of 15,000,000 shares of our common stock
issuable pursuant to our 2006 Plan (the "Shares").
Item 2.
Registrant Information
and Employee Plan Annual Information
The documents containing
the information specified in this Item 2 will be sent or given to employees,
directors or others as specified by Rule 428(b). In accordance with the rules
and regulations of the SEC and the instructions to Form S-8, such documents are
not being filed either as part of this registration statement or as
prospectuses or prospectus supplements pursuant to Rule 424.
EXPLANATORY NOTE
This Prospectus
constitutes a part of a registration statement on Form S-8 (the "Registration
Statement") filed by the Company with the SEC under the Securities Act. This
Prospectus omits certain of the information contained in the Registration
Statement in accordance with the rules and regulations of the SEC. Reference is
hereby made to the Registration Statement and related exhibits for further
information
1
with respect to the
Company and the Shares. Statements contained herein concerning the provisions
of any documents are not necessarily complete and, in each instance, reference is
made to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the SEC. Each such statement is qualified in
its entirety by such reference.
We prepared this
Registration Statement in accordance with the requirements of Form S-8 under
the Securities Act to register 15,000,000 Shares pursuant to our 2006 Plan. The
purpose of the 2006 Plan is to advance the interests of the Company and its
stockholders by providing a means of attracting and retaining employees, corporate
officers, directors, consultants and other key persons employed or retained by
the Company and its subsidiaries and affiliates.
No person is authorized
to give any information or to make any representations other than those
contained in this Prospectus in connection with any offer to sell or sale of
the securities to which this Prospectus relates, and if given or made, such
information or representations must not be relied upon as having been
authorized.  Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, imply
that there has been no change in the facts herein set forth since the date
hereof.  This Prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
2
TABLE OF CONTENTS
EXPLANATORY NOTE
AVAILABILITY OF
  INFORMATION
FORWARD-LOOKING
  STATEMENTS
SUMMARY INFORMATION
RISK FACTORS
USE OF PROCEEDS
SELLING SECURITY HOLDERS
PLAN OF DISTRIBUTION
DESCRIPTION OF
  SECURITIES
DISCLOSURE OF
  COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
LEGAL MATTERS
EXPERTS
SIGNATURES
3
AVAILABILITY OF INFORMATION
The Registrant is subject
to the informational requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and in accordance therewith files reports, proxy
statements and other information including annual and quarterly reports on Form
10-KSB and 10-QSB (the "1934 Act Filings") with the SEC. Reports and other
information filed by the Registrant can be inspected and copied at the public
reference facilities maintained at the SEC at 100 F Street, N.E., Washington,
D.C. 20549. Copies of such material can be obtained upon written request
addressed to the SEC, Public Reference Section, 100 F Street, N.E., Washington,
D.C. 20549, at prescribed rates. The SEC maintains a web site on the Internet
(http://www.sec.gov) that contains reports, proxy and information statements
and other information regarding issuers that file electronically with the SEC
through the Electronic Data Gathering, Analysis and Retrieval System ("EDGAR").
Our common stock is
traded on the OTCBB under the symbol ADOV. Material filed by us can also be
inspected and copied at the offices of the NASD, located at 9509 Key West
Avenue, Rockville, MD 20850-3329.
We will distribute annual
reports to our stockholders, including financial statements examined and
reported on by an independent registered public accounting firm. We also will
provide you without charge, upon your request, with a copy of any or all
reports, proxy statements and other documents we file with the SEC, as well as
any or all of the documents incorporated by reference in this Prospectus or the
registration statement we filed with the SEC registering for resale the shares
of our common stock being offered pursuant to this Prospectus, other than
exhibits to such documents unless such exhibits are specifically incorporated
by reference into such documents. Requests for such copies should be directed
to Edwin A. Reilly, the Company's Chief Executive Officer at Andover Medical,
Inc., 510 Turnpike Street, Suite 204, N. Andover, MA 01845; telephone: (978)
557-1001;
fax:
(978) 557-1004;
URL: www.andovermedical.com.
FORWARD-LOOKING STATEMENTS
Statements contained in
this report include "forward-looking statements" within the meaning of
such term in Section 27A of the Securities Act and Section 21E of the Exchange
Act.  Forward-looking statements
involve known and unknown risks, uncertainties and other factors which could
cause actual financial or operating results, performances or achievements to
differ materially from those expressed or implied by the forward-looking
statements.  Forward-looking
statements generally are based on our best estimates of future results,
performances or achievements, based upon current conditions and the most recent
results of the companies involved and their respective industries.  Forward-looking statements may be
identified by the use of forward-looking terminology such as "may," "will,"
"could," "project," "expect," "believe," "estimate," "anticipate," "intend," "continue,"
"potential," "opportunity" or similar terms, variations of those terms or the
negative of those terms or other variations of those terms or comparable words
or expressions.
Potential risks and
uncertainties include, among other things, such factors as:
·
our ability to
raise funds;
·
our business
strategies and future plans of operations;
·
our ability to
identify, successfully complete and/or manage future acquisitions;
·
customers'
acceptance of our products;
·
rapid
technological changes in the industry;
·
our ability to
attract and retain qualified personnel;
4
·
general economic
conditions in the United States as well as the economic conditions affecting
the industry in which we operate;
·
the amount of
sales of our products and services;
·
our current
operating losses;
·
the competitive
environment within the industry in which we compete; and
·
the other
factors and information discussed in other sections of this Prospectus and in
the documents incorporated by reference in this Prospectus.
Persons reading this
Prospectus should carefully consider such risks, uncertainties and other
information, disclosures and discussions which contain cautionary statements
identifying important factors that could cause actual results to differ
materially from those provided in the forward-looking statements.  We undertake no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, subject to applicable law.
SUMMARY INFORMATION
The following summary is
qualified in its entirety by reference to the more detailed information
appearing elsewhere in this Prospectus or incorporated herein by
reference.  Each prospective investor is
urged to read this Prospectus and the documents incorporated herein by
reference in their entirety.  Investment
in the securities offered hereby involves a high degree of risk.  See "Risk Factors."
Use
of Names
Throughout this
Prospectus, the terms "we," "us," "our," "the Company" or "AMI" refer to
Andover Medical, Inc.
Business
AMI is a publicly
traded company (OTCBB:ADOV) that was formed to engage in the business of
distributing procedure specific durable medical equipment ("DME") and services
segments of the orthopedic, podiatric, and urological physician care markets in
the United States. DME is a specific type of medical equipment prescribed by
physicians for home use that provides therapeutic benefits or helps patients
perform tasks they would otherwise not be able to accomplish. The Company
intends to establish a nationwide distribution network and plans to offer
physicians the largest selection of competitively priced brand-name DME, and
urodynamic diagnostic and treatment products.
Orthopedics,
urology and podiatry are among the fastest growing segments in healthcare that
utilize DME products and services. The "graying" of the population and the
increase in the active physical lifestyle of seniors, among other factors, play
key roles in this growth. These DME products are most significantly used by
baby boomers and seniors age 65 and over. According to the U.S. Department of
Health and Human Services this senior demographic, which is expanding rapidly
both in size and in its need for services, has been increasing from
approximately 35 million people in 2000, to an estimated 40.2 million by
2010, and eventually to an estimated 71 million people by 2030, representing
approximately 20 percent of the U.S. population.
Business Strategy
The business
strategy of AMI revolves around acquiring local DME companies with sales of
between $1 million and $10 million per annum in the markets of orthopedics,
podiatry, and urology.  We will then
consolidate them and build a single source provider of DME and incontinence
treatment products.  On May 4, 2007, AMI
completed the acquisition of Ortho-Medical Products, Inc., a New York based
full-service company specializing in procedure specific orthopedic DME,
respiratory equipment, and orthotics
5
and prosthetics.  On May 11, 2007, AMI completed the
acquisition of Rainier Surgical Incorporated, headquartered in Auburn,
Washington, which specializes in the sales, service, distribution and marketing
of orthopedic DME.  AMI is in
negotiations to acquire other potential target companies.
Successful growth
of AMI is predicated on its ability to acquire these already existing companies
in a "roll-up" and take advantage of the Company's larger scale to:
a)
add
on new acquisitions;
b)
secure
purchasing efficiencies;
c)
contract
for innovative new products; and
d)
implement
management and operational efficiencies.
AMI believes the distribution
channel for these healthcare segments is currently fragmented and inefficient,
and that operating as a local independent distributor is difficult today for
various reasons, including the following:
(a)
small
independent operations have a difficult time trying to gain access to
innovative (high margin) products for distribution;
(b)
negotiations
for products to reduce the cost of goods sold is very limited; therefore,
margin enhancement is difficult;
(c)
back
office expenses are spread over a very limited revenue base; and
(d)
little
opportunity exists for a viable exit strategy.
AMI intends to
offer extensive product offerings, including postoperative pain management
products, orthopedic devices, a full range of soft goods and functional knee
braces, and uro-dynamic devices and disposables. The Company's products and
services are expected to offer solutions to create overall practice management
efficiencies for health care providers.
AMI has identified
companies that target certain procedures such as post surgical care for
Anterior Cruciate Ligament (ACL) Surgery, and knee/hip replacement. These
companies offer a comprehensive array of products to aid in the recovery for a
particular procedure. This provides the physician with a single source solution
to his/her postoperative needs.
AMI intends to
establish a unified nationwide distribution network by acquiring and
consolidating in a roll-up, healthcare companies that offer physicians both a
convenient and administratively efficient way to offer patients a large
selection of competitively priced, brand-name, DMEs and urodynamic diagnostic
and treatment products. AMI intends to provide an attractive option for the
physician customer base. These products, delivered at point of service outlets
such as physicians offices, clinics/hospitals, nursing facilities, patients
homes, and retail outlets, are often prescribed by physicians and physical
therapists and qualify for third party reimbursement from insurance companies,
Medicare, Medicaid, etc..
Our medical
products and services consolidation model mirrors trends already taking place
in many industries. Currently there are several public companies that have
concentrated on consolidating different segments of the DME market:
·
Respiratory care
—Lincare, Apria
·
Orthotics and Prosthetics (O&P)
—Hanger
Orthopedic Group
·
Manufacturing of bracing and orthopedic soft goods
—DJ
Orthopedics, OSSUR, Orthofix
One of the
services AMI currently provides for physicians is the
stock and bill
method of inventory control
and payment, eliminating the need to have patients referred to a separate
orthopedics and prosthetics facility to purchase DME products prescribed by the
physician. Under such an arrangement, AMI handles inventory control and
billing, while the physicians' practices derive the benefits of having products
available on site with little administrative involvement. In addition, AMI will
offer products directly to the physicians and patients.
6
Recent
Developments
On May 11, 2007,
AMI and its wholly-owned subsidiaries entered into a $5,000,000 Credit
Agreement with TD BANKNORTH, N.A. (the "
Credit
Agreement")
.  The borrowing
capacity available to the Company under the Credit Agreement consists of notes
representing a two year $4,000,000 Senior Secured Revolving Credit Facility and
a two year $1,000,000 Senior Secured Revolving Acquisition Loan Facility which
converts into a three-year term loan.
All borrowings
under the Credit Agreement will bear interest at either (i) a rate equal to
LIBOR, plus an Applicable Margin (as defined in the Credit Agreement), or (ii)
a Base Rate (as defined in the Credit Agreement) plus an Applicable Margin.
AMI and each of
its wholly-owned subsidiaries, Ortho-Medical Products, Inc., Rainier Surgical
Incorporated, Rainer Acquisition Corp. and Andover Management Services, Inc.
are borrowers under the Credit Agreement and their obligations are guaranteed
by AMI and all of AMI's subsidiaries. 
Each Company's assets are pledged as security under the Credit
Agreement.
The Credit
Agreement was initially utilized to replace commitments and outstandings under
Rainier Surgical Incorporated's existing credit facility with Heritage
Bank.  Subsequent proceeds of the Credit
Agreement are to be used for acquisition, working capital and for general corporate
purposes.
Our
History
On August 31,
2006, the Company, formerly known as Snow & Sail Sports, Inc. ("Snow &
Sail"), entered into a reorganization agreement (the "Reorganization Agreement")
pursuant to which the Company spun off its existing business, replaced its
management and changed its corporate name and business (the "Transaction").  The following steps were taken in connection
with the Transaction:
·
the Company
effected a 28.5-for-1 forward stock split whereby 460,000 pre-forward split
registered shares of its common stock held by approximately 42 non-affiliates
(the "Non-Affiliates") of the Company were converted into 13,110,000
post-forward split registered shares (the "Post-Forward Split Registered Shares");
·
all of the
Company's issued and outstanding shares of registered and restricted common
stock (other than the Post-Forward Split Registered Shares) were cancelled;
·
in exchange for
$10 and other valuable consideration, pursuant to the Reorganization Agreement,
the Company issued an aggregate of 10,000,000 restricted shares of its common
stock in connection with the Transaction to management and certain affiliates.
As part of the Reorganization Agreement, the principals of Andover Management
Services, Inc. transferred to the Company all right, title and interest to the
new business of Andover, including, but not limited to, letters of intent for
acquisitions, an office lease, office furniture and cash.
·
Paul F.
Tetreault and John P. Greeley, representing all of the former officers and directors
of the Company prior to the Transaction, resigned and were replaced by Edwin A.
Reilly and Robert G. Coffill, Jr.; Mr. Reilly was appointed the President,
Chief Operating Officer, acting Chief Financial Officer, and Secretary of the
Company, and Mr. Coffill was elected to serve, at that time, as its sole
director;
·
the Company's
former business (including all of its assets and liabilities), which involved
providing one-day ski trips within the New England area, was spun off prior to
the Transaction to former management;
7
·
the Company
issued an aggregate of 2,500,000 incentive stock options to purchase an
equivalent number of shares of its restricted common stock to the Company's
then sole officer, Edwin A. Reilly (1,250,000), and its then and sole director,
Robert G. Coffill, Jr. (1,250,000); and
·
the Company changed its name from
Snow & Sail Sports, Inc. to Andover Medical, Inc.
RISK FACTORS
The securities offered hereby are
speculative, involve a high degree of risk and should only be purchased by
persons who can afford to lose their entire investment.  Prospective purchasers should carefully
consider, among other things, the following risk factors relating to the
business of the Company and the Offering prior to making any investment.  These risk factors are summary in nature and
are not intended to be exhaustive or set forth all the possible risks and
uncertainties that may be associated with purchasing or owning this
investment.  You are strongly urged to consult
with professional financial advisors, accountants, and lawyers in evaluating
this investment and making an independent and informed decision about whether
or not to invest your money in the Offering.
Risks
Related to Our Business
We recently went public and have a limited
operating history upon which you can base an investment decision.
We became a public company on August 31, 2006 via
a reverse merger. Consequently, the Company has a very limited operating
history upon which you can make an investment decision, or upon which we can
accurately forecast future sales. You should, therefore, consider us subject to
all of the business risks and uncertainties associated with a new business. The
likelihood of our success must be considered in light of the expenses,
difficulties and delays frequently encountered in connection with the formation
and initial operations of a new and unproven business.
Our business strategy depends upon our
ability to complete and manage acquisitions of other companies.
Our business strategy is to grow through acquisitions,
which depends on our ability to identify, negotiate, complete and integrate
suitable acquisitions. See "Summary Information -Business Strategy."  Even
if we complete acquisitions we may experience:
·
difficulties in integrating any acquired
companies, personnel and products into our existing business;
·
delays in realizing the benefits of the
acquired company or products;
·
significant demands on the Company's
management, technical, financial and other resources;
·
diversion of our management's time and
attention to unexpected problems;
·
higher costs of integration than we
anticipated;
·
unanticipated liabilities; and/or
·
difficulties in retaining key employees
of the acquired businesses who are necessary to manage these acquisitions.
We have no assurance that our proposed
acquisition strategy will be successful.
Our business strategy is to expand our operations
through strategic acquisitions. We are currently engaged in acquiring certain
orthopedic, podiatric, and urology related service entities. While we acquired
two operating companies in May 2007, we may not be successful in our overall
acquisition strategy for any number of reasons. These reasons include, but are
not limited to, our ability to obtain funding in excess of the approximately
$7,300,000 in gross proceeds we recently raised in private equity financings
(collectively, the "Offering"); complete the necessary due diligence, to our
satisfaction; agree on all material terms of definitive purchase agreements;
obtain audited financial statements consistent with the
8
unaudited
financial statements, or otherwise consummate the acquisition of any other
entities.  If we are unable to complete
additional acquisitions in the orthopedic, podiatric and urology markets we
will be unable to achieve our business strategy of becoming a single source of
DME in these fields.
We may not be able
to manage acquisitions and achieve profitability.
We face substantial challenges with both acquisitions
made to date and potential acquisitions. These include the integration of the
acquired entities with the operations, technologies and management of the
Company and the attendant risks associated with such acquisitions, including
possible unanticipated liabilities, unanticipated costs, diversion of
management attention and loss of personnel.
We cannot assure you that we will successfully
integrate or profitably manage any acquired businesses, that our continued
business will achieve sales levels, profitability, efficiencies or synergies
that justify the acquisitions, or that the acquisitions will result in
increased earnings for us in any future period. Successful integration of the
Company's operations will depend on, among other things, our ability to
attract, hire and retain skilled management and other personnel, none of which
can be assured. To manage growth effectively, we will need to invest in
development of enhancements to existing services, implement operational,
financial and management information systems, procedures and controls, and
integrate our personnel and operations with those of an acquired company.  We may not be able to manage the combined
operations effectively, and failure to do so could have a material adverse
effect on the Company's business, financial condition and/or operating results.
In the case of debt funding, there can be no assurance
that we will have sufficient income from operations of such acquired companies
to satisfy the debt payments, which may then be adversely affected.
We have only limited working capital and
the proceeds of the Company's private financing to date will not be sufficient,
without additional financing, to complete additional acquisitions contemplated
herein.
We raised gross proceeds of approximately $7.3
million, from equity offerings with the net proceeds used for working capital
and acquisitions. The Company anticipates, however, that based on its current
proposed plans and assumptions, it will have to raise additional financings to
meet its anticipated working capital needs and cash needs for future
acquisitions. There can be no assurance that the Warrants provided in the
Offering will be exercised. The Company has no binding arrangements with
respect to additional financings. Furthermore, it is not anticipated that
existing security holders will provide any of the Company's future financing
requirements. In addition, while the Company is negotiating to obtain debt
financing for acquisitions such financing may not be available to the Company,
if so required, on commercially reasonable terms, or at all. Any inability to
obtain additional financing when needed and on acceptable terms could have a
material adverse effect upon the Company's operations, including the
possibility of requiring the Company to curtail its acquisition strategy.
We may be subject to potential litigation
claims in connection with the appointment of Frank Magliochetti as the Company's
Chairman of the Board and Chief Executive Officer that could be costly and time
consuming and could divert our management and key personnel from business
operations.
In connection with the sale of a prior business, Frank
Magliochetti, the Company's former Chairman of the Board and Chief Executive
Officer (who served in that capacity from December 20, 2006 until his
resignation on March 9, 2007), entered into a non-compete agreement with
Otto Bock HealthCare L.P. ("Otto Bock"). Any litigation claims against the
Company concerning that non-compete agreement could be costly and time
consuming and could divert our management and key personnel from business
operations. The non-compete agreement provides that Mr. Magliochetti may
not engage in any business competitive with the business of Otto Bock for a
period of four years. In February 2007, the Company was advised by the
attorneys for Otto Bock that the Company and its CEO, Edwin Reilly, acted in
concert with Mr. Magliochetti in breach of his non-compete agreement. Otto
Bock claims, among other things, that the Company plans to compete directly in
the market for continuous passive motion products and services and in the market
for pain management braces, and is doing business with prohibited customers.
The Company and Messrs. Magliochetti and Reilly deny any and all
wrongdoing. In view of Mr. Magliochetti's resignation and his
non-disclosure of any confidential information prior to such resignation, the
Company does not believe this claim has any merit. Although the Company has not
been sued by Otto Bock, and
9
Mr. Magliochetti
and the Company are attempting to resolve the matter, there can be no assurance
that the Company will not be sued by Otto Bock, which could have a material
adverse effect on the Company's operations.
Our financial statements have been prepared
assuming that the Company will continue as a going concern.
Our audited financial statements for the fiscal year ended
December 31, 2006, have been prepared assuming the Company will continue as a
going concern. As discussed in Note 9 to the financial statements, as of
December 31, 2006, the Company had not yet generated revenues and was still
developing its planned principal operations. These factors raise substantial
doubt about the Company's ability to continue as a going concern. Our
independent registered public accounting firm has included an explanatory
paragraph expressing doubt about our ability to continue as a going concern in
their audit report for the fiscal year ended December 31, 2006.
We rely heavily on our relationships with
orthopedic professionals, agents and distributors for marketing our services
and our failure to maintain these relationships could adversely affect our
business.
The sales of our services depend significantly on the
prescription or recommendation of such services by orthopedic and other
healthcare professionals. Our future success depends on our ability to maintain
good relations between such healthcare professions and the management of the
companies we acquire. Our failure to maintain good relationships could have an
adverse effect on our business.
We operate in a very competitive business
environment.
The non-operative orthopedic and podiatry markets are
highly competitive and fragmented. Our competitors include several large,
diversified general orthopedic products companies and numerous smaller niche
companies. Some of our competitors are included in our vendor base. We may not
be able to offer products or services similar to or more desirable than our
competitors, or at a price comparable to that of our competitors. We may be
unable to compete if we fail to develop, license or acquire and market new
products and new services enhancements. Many of our competitors have greater
financial resources, more widely accepted products, stronger name recognition
and larger sales and/or distribution networks than we do.
Our quarterly operating results are subject
to substantial fluctuations and you should not rely on them as an indication of
our future results.
We do not have an operating history of our own.  Until we are able to integrate our initial
acquisitions, which will take at least one year, our quarterly operating
results are expected to vary significantly. Our results will depend upon a
combination of factors, many of which are beyond our control. These
factors include:
·
our ability to meet the demand for our
services;
·
our ability to develop, introduce and
market new and enhanced products and versions of our services on a timely
basis;
·
the impact of any acquisitions that occur
in a quarter;
·
changes in pricing policies by us and our
competitors and reimbursement rates by third-party payors, including government
healthcare agencies and private insurers;
·
changes in the treatment practices of
orthopedic and podiatry clinics and their allied healthcare professionals; and
·
the timing of significant orders and
shipments.
Accordingly, our quarterly sales and operating results
may vary significantly in the future and period-to-period comparisons of our
results of operations may not be meaningful and should not be relied upon as
indications of future performance. We cannot assure you that our sales
will increase or be sustained in future periods or that we will be profitable
in any future period.
10
Our business plan
relies on certain assumptions for the market for our services, which, if
incorrect, may adversely affect our profitability.
We believe that various demographics and industry specific
trends will help drive growth in the rehabilitation markets, including:
·
a growing elderly population with broad
medical coverage, increased disposable income and longer life expectancy;
·
a growing emphasis on physical fitness,
leisure sports and conditioning, which has led to increased injuries,
especially among women; and
·
the increasing awareness and use of
non-invasive devices for prevention, treatment and rehabilitation purposes.
These demographics and trends are beyond our
control. The projected demand for our services could materially differ
from actual demand if our assumptions regarding these factors prove to be
incorrect or do not materialize or if alternative treatments to those offered
by our services gain widespread acceptance. Any one of these outcomes could
have an adverse effect on our operations.
We have limited suppliers for some of our
products which makes us susceptible to supply shortages and could disrupt our
operations.
We do not manufacture the products that we provide to
our clients. Instead, we rely on manufacturers and other third party suppliers
for these products. If any of these parties are unable or unwilling to supply
these products to us, we would be unable to distribute our products until a
replacement supplier could be found. We cannot guarantee that a replacement
supplier could be found on reasonable terms or in a timely manner. Any
interruption in our ability to distribute our products could cause our business
to be unsuccessful and the value of investors' investment in us may decline.
We may be adversely affected if we lose the
services of any member of our senior management, our board of directors, or key
employees.
We are dependent on the continued services of our
senior management team and Board of Directors who are expected to make
significant contributions to our growth and success. The loss of any one
or more of these persons could have a material adverse effect on us.
We do not believe the departure of Frank Magliochetti
will negatively impact our ability to carry out our acquisition strategy.  As reflected by the durable medical equipment
and specifically orthopedic devices and soft goods experience of Edwin Reilly
set forth below under "Management," the Board of Directors fully believes that
Mr. Reilly will be able to carry out our business strategy in order that we may
succeed. Nevertheless, in the event that we are able to complete future
acquisitions, the Company will be dependent on its ability to retain the
services of management of such companies. In addition, we could be adversely
affected if any key employees of acquired companies who do not have employment
nor non-competition agreements with us, went to work for one of our
competitors. Our future success depends on our ability to identify, attract, train
and motivate other highly skilled personnel. Failure to do so may adversely
affect future results.
Recent changes in coverage and
reimbursement policies for our products by Medicare and third-party payors or
reductions in reimbursement rates for our products could adversely affect our
business and results of operations.
Products are sold by our acquisition companies through
clinics and physicians who may receive reimbursement for the cost of our
products from private third-party payors, Medicare, Medicaid and other
governmental programs. Our ability to sell our products successfully depends,
in part, on the purchasing and practice patterns of clinics and physicians, who
are influenced by cost containment measures taken by third-party
payors. Limitations or reductions in third-party reimbursement for our
products can have a material adverse effect on our sales and profitability.
11
Congress and state legislatures consider reforms in
the healthcare industry that may modify reimbursement methodologies and practices,
including controls on healthcare spending of the Medicare and Medicaid
programs. It is not clear at this time what proposals, if any, will be
adopted or, if adopted, what effect the proposals would have on our
business. Many private health insurance plans model their coverage and
reimbursement policies after Medicare policies. Congressional or
regulatory measures that reduce Medicare reimbursement rates could cause
private health insurance plans to reduce their reimbursement rates for our
products, which could have an adverse effect on our ability to sell our
products or cause our orthopedic professional customers to prescribe less
expensive products introduced by us and our competitors.
The Medicare Prescription Drug, Improvement, and
Modernization Act of 2003, or Medicare Modernization Act, mandated a number of
changes in the Medicare payment methodology and conditions for coverage of
orthotic devices and durable medical equipment. These changes include a freeze
in payments for durable medical equipment from 2004 through 2008, a payment
freeze for orthotic devices from 2004 through 2006, competitive bidding
requirements, and new clinical conditions for payment and quality standards.
The changes affect our products generally, although specific products may be
affected by some but not all of the Medicare Modernization Act's provisions.
Under competitive bidding, which will be phased in
beginning in 2007, Medicare will change its approach to reimbursing certain
items and services covered by Medicare from the current fee schedule amount to
an amount established through a bidding process between the government and
suppliers. Competitive bidding may reduce the number of suppliers
providing certain items and services to Medicare beneficiaries and the amounts
paid for such items and services.
Also, Medicare payments in regions not subject to
competitive bidding may be reduced using payment information from regions
subject to competitive bidding. Any payment reductions or the inclusion of
certain of our orthotic devices in competitive bidding, in addition to the
other changes to Medicare reimbursement and standards contained in the Medicare
Modernization Act, could have a material adverse effect on our results of
operations.
In addition, on February 11, 2003, the Centers
for Medicare and Medicaid Services, or CMS, the agency responsible for
implementing the Medicare program, made effective an interim final regulation
implementing "inherent reasonableness" authority, which allows adjustments to
payment amounts for certain items and services covered by Medicare when the
existing payment amount is determined to be grossly excessive or grossly
deficient. The regulation lists factors that may be used to determine
whether an existing reimbursement rate is grossly excessive or grossly
deficient and to determine what a realistic and equitable payment amount is.
Also, under the regulation, a payment amount will not
be considered grossly excessive or grossly deficient if an overall payment
adjustment of less than fifteen percent would be necessary to produce a
realistic and equitable payment amount. The regulation remains in effect
after the Medicare Modernization Act, although the new legislation precludes
the use of inherent reasonableness authority for devices subject to competitive
bidding. When using the inherent reasonableness authority, CMS may reduce
reimbursement levels for certain items and services, which could have a
material adverse effect on our results of operations.
We cannot assure you that third-party reimbursement
for our products will continue to be available or at what rate such products
will be reimbursed. Failure by users of our products to obtain sufficient
reimbursement from third-party payors for our products or adverse changes in
governmental and private payors' policies toward reimbursement for our products
could have a material adverse effect on our results of operations.
Healthcare reform, managed care and buying
groups have put downward pressure on our prices.
A further result of managed care and the related
pressure on costs has been the advent of buying groups in the United
States. Such buying groups enter into preferred supplier arrangements with
one or more manufacturers of orthopedic or other medical products in return for
price discounts. The extent to which such buying groups are able to obtain
compliance by their members with such preferred supplier
12
agreements
varies considerably depending on the particular buying groups. We believe
that our ability to maintain our existing arrangements will be important to our
future success and the growth of our revenues.
In addition, we may not be able to obtain supplier
commitments from major vendors, in which case we could lose significant
potential sales. On the other hand, if we receive preferred supplier
commitments from particular vendors which do not deliver high levels of
compliance, we may not be able to offset the negative impact of lower per unit
prices or lower margins with any increases in unit sales or in market share.
Proposed laws that would limit the types of
orthopedic professionals, who can fit, sell or seek reimbursement for our
products, could, if adopted, adversely affect our business.
In response to pressure from orthopedic practitioners,
Congress and state legislatures have from time to time considered proposals
that limit the types of orthopedic professionals who can fit and/or sell our
orthotic device products or who can seek reimbursement for them. Several
states have adopted legislation that imposes certification or licensing requirements
on the measuring, fitting and adjusting of certain orthotic devices. Some
of these laws have exemptions for manufacturers' representatives. Other
laws apply to the activities of such representatives. Other states may be
considering similar legislation. Such laws could limit our potential
customers in those jurisdictions in which such legislation or regulations are
enacted by limiting the measuring and fitting of these devices to certain
licensed individuals. We may not be successful in opposing their adoption
and, therefore, such laws could have a material adverse effect on our business.
In addition, efforts have been made to establish such
requirements at the federal level for the Medicare program. Most recently,
in 2000 Congress passed the Medicare, Medicaid, and SCHIP Benefits Improvement
and Protection Act of 2000 (BIPA). BIPA contains a provision requiring as
a condition for payment by the Medicare program that certain certification or
licensing requirements be met for individuals and suppliers furnishing certain,
but not all, custom-fabricated orthotic devices. CMS is in the process of
implementing this requirement, and we cannot predict the effect its
implementation or implementation of other such laws will have on our business.
We are subject to numerous federal and
state regulations, noncompliance with which could result in significant
penalties that could have a material adverse effect on our business.
We are subject to various federal and state laws
pertaining to healthcare fraud and abuse, including anti-kickback laws and
physician self-referral laws (commonly known as "Stark" laws). Violations of
these laws are punishable by criminal and/or civil sanctions, including, in
some instances, imprisonment and exclusion from participation in federal and
state healthcare programs, including Medicare, Medicaid, Veterans
Administration health programs and TRICARE, which could have a material adverse
effect on our business.
Because of the far-reaching nature of these laws, we
may be required to alter one or more of our practices. Healthcare fraud and
abuse regulations are complex and even minor, inadvertent irregularities in
submissions can potentially give rise to claims that a fraud and abuse law or
regulation has been violated. Any violations of these laws or regulations could
have a material adverse effect on our business, financial condition and results
of operations. If there is a change in law, regulation or administrative or
judicial interpretations, we may have to change our business practices or our
existing business practices could be challenged as unlawful.
Audits or denials of claims by government
agencies could reduce our revenue or profits.
As part of the business structure of our acquired
entities, we submit claims and receive payments directly from Medicare,
Medicaid programs and private payors. Therefore, we are subject to extensive
government regulation, including requirements for maintaining certain
documentation to support our claims. Medicare contractors and Medicaid agencies
periodically conduct pre- and post-payment review and other audits of claims,
and will be under increasing pressure to scrutinize more closely healthcare
claims and supporting documentation generally. We periodically could receive
requests for documentation during the governmental audits of individual claims.
We cannot assure that such review and/or similar audits of our claims will not
result in material delays in payment, as well as material recoupment or
denials, which could reduce net revenues and profitability, nor the exclusion
from participation in the Medicare and
13
Medicaid
programs or from participation on the provider panel of a private payor.
Private payors from time to time conduct similar reviews and audits.
We are subject to
substantial government regulation, which could materially, adversely affect our
business.
The production and marketing of some of our products
and our ongoing research and development, pre-clinical testing and clinical
trial activities are subject to extensive regulation and review by numerous
governmental authorities both in the United States and abroad. The
pre-marketing approval process can be particularly expensive, uncertain, and
lengthy, and a number of devices for which U.S. Food & Drug
Administration ("FDA") approval has been sought by other companies have never
been approved for marketing. In addition to testing and approval procedures,
extensive regulations also govern marketing, manufacturing, distribution,
labeling, and record keeping. If we do not comply with applicable regulatory
requirements, violations could result in warning letters, non-approval,
suspensions of regulatory approvals, civil penalties and criminal fines,
product seizures and recalls, operating restrictions, injunctions, and criminal
prosecution.
Delays in or rejection of FDA or other government
entity approval of our new products may also adversely affect our business.
Such delays or rejection may be encountered due to, among other reasons,
government or regulatory delays, lack of efficacy during clinical trials,
unforeseen safety issues, slower-than-expected rate of patient recruitment for
clinical trials, inability to follow patients after treatment in clinical
trials, inconsistencies between early clinical trial results and results
obtained in later clinical trials, varying interpretations of data generated by
clinical trials, or changes in regulatory policy during the period of product
development in the United States and abroad. In the United States, there has
been a continuing trend of more stringent FDA oversight in product clearance
and enforcement activities, causing medical products manufacturers to
experience longer approval cycles, more uncertainty, greater risk, and higher
expenses. Even if regulatory approval of a product is granted, this approval may
entail limitations on uses for which a previously approved product may be
labeled and promoted. It is possible, for example, that we may not receive FDA
approval to market already approved products for broader or different
applications or to market updated products that represent extensions of our
basic technology.
Periodically, legislative or regulatory proposals are
introduced that could alter the review and approval process relating to medical
products. It is possible that the FDA will issue additional regulations further
restricting the sale of our present or proposed products. Any change in
legislation or regulations that govern the review and approval process relating
to our current and future products could make it more difficult and costly to obtain
approval for new products, or to produce, market, and distribute existing
products.
Undisclosed liabilities associated with our
reorganization.
There may be undisclosed liabilities that were either
misrepresented to us or that we were unable to discover prior to the
reorganization and the spin off of the Company's former business, which
involved providing one-day ski trips within the New England area. The former
principal of Snow & Sail Sports, Inc. could fail to indemnify the
Company against potential liabilities associated with the former business in
breach of the terms of the reorganization agreement. Although we would fully
pursue all legal recourse against such persons, there can be no assurance we
will be held harmless, in which case our operations may be adversely affected.
Our principal stockholders may have the
ability to control almost all matters of the Company.
Meyers Associates, LP, our financial advisor and an
NASD member firm, and its president own 3,000,000 shares of Common Stock (with
options to acquire an additional 4,325,498 shares pursuant to a unit purchase
option), and other principal stockholders of the Company own an additional
approximately 7,835,000 shares, all of which are restricted. These 10,835,000
shares represent approximately 37% of the 29,328,995 million issued and
outstanding shares of Common Stock of the Company as of the date of this
prospectus. In addition, certain of our officers, directors and former members
of management have received grants for options to purchase 6,600,000 shares of
Common Stock, in the aggregate. Therefore, management and our financial adviser
will have influence over the election of the Company's directors and
14
will be
able to control the outcome of other issues submitted to stockholders of the Company.
This includes their ability to amend the Certificate of Incorporation, approve
a merger or consolidation of the Company with another company or approve the
sale of all or substantially all of the assets of the Company without the
agreement of minority stockholders.
We do not
anticipate paying dividends in the foreseeable future, and the lack of
dividends may have a negative effect on the price of our common stock.
We currently intend to retain our future earnings, if
any, to support operations and to finance expansion and therefore, we do not
anticipate paying any cash dividends on our common stock in the foreseeable
future.
We are subject to critical accounting
policies, and we may interpret or implement required policies incorrectly.
We follow generally accepted accounting principles for
the United States in preparing our financial statements. As part of this work,
we must make many estimates and judgments about future events. These affect the
value of the assets and liabilities, contingent assets and liabilities, and
revenue and expenses that we report in our financial statements. We believe
these estimates and judgments are reasonable, and we make them in accordance
with our accounting policies based on information available at the time.
However, actual results could differ from our estimates, and this could require
us to record adjustments to expenses or revenues that could be material to our
financial position and results of operations in future periods.
Our Common Stock may experience significant
volatility in the future, which substantially increases the risk of loss to
persons owning our common stock.
Because of the limited trading market for our common
stock, and because of the potential for significant price volatility,
stockholders may not be able to sell their shares of Common Stock when they
desire to do so. The inability to sell shares in a rapidly declining market may
substantially increase the risk of loss as a result of such illiquidity and the
price for our common stock may suffer greater declines in the event of
significant price volatility.
Our Common Stock is traded on the OTC
Bulletin Board, which may be detrimental to investors.
Our shares of Common Stock are currently traded on the
OTC Bulletin Board. Stocks traded on the OTC Bulletin Board generally have
limited trading volume and exhibit a wide spread between the bid/ask
quotations. We cannot predict whether a more active market for our common stock
will develop in the future. In the absence of an active trading market:
investors may have difficulty buying and selling our common stock or obtaining
market quotations; market visibility for our common stock may be limited; and a
lack of visibility for our common stock may have a depressive effect on the
market price for our common stock.
Our Common Stock is subject to restrictions
on sales by broker-dealers and penny stock rules, which may be detrimental to
investors.
Our Common Stock is subject to Rules 15g-1
through 15g-9 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), which imposes certain sales practice requirements on broker-dealers who
sell our common stock to persons other than established customers and "accredited
investors" (as defined in Rule 501(a) of the Securities Act). For
transactions covered by this rule, a broker-dealer must make a special
suitability determination for the purchaser and have received the purchaser's
written consent to the transaction prior to the sale. This rule adversely
affects the ability of broker-dealers to sell our common stock and purchasers
of our common stock to sell their shares of our common stock.
Additionally, our common stock is subject to SEC
regulations applicable to "penny stocks." Penny stocks include any non-Nasdaq
equity security that has a market price of less than $5.00 per share, subject
to certain exceptions. The regulations require that prior to any non-exempt
buy/sell transaction in a penny stock, a disclosure schedule proscribed by the
SEC relating to the penny stock market must be delivered by
15
a broker-dealer
to the purchaser of such penny stock. This disclosure must include the amount
of commissions payable to both the broker-dealer and the registered
representative and current price quotations for our common stock. The
regulations also require that monthly statements be sent to holders of a penny
stock that disclose recent price information for the penny stock and
information of the limited market for penny stocks. These requirements
adversely affect the market liquidity of our common stock.
A significant number of our shares are
eligible for sale, and their sale could depress the market price of our stock.
Sales of a significant number of shares of Common
Stock in the public market pursuant to this prospectus could harm the market
price of our common stock. Pursuant to a registration statement declared
effective by the SEC in January 2006, as converted by a 28.5 for 1 forward
stock split reported in the Company's Current Report on Form 8-K filed on
September 7, 2006, an aggregate of 13,110,000 shares of Common Stock were
registered and are free-trading. As additional shares of our common stock
become available for resale in the public market pursuant to this prospectus
and otherwise, the supply of our common stock will increase, which could
decrease its price. Some or all of the shares of our common stock may be
offered from time to time in the open market pursuant to Rule 144, and
these sales may have a depressive effect on the market for the shares of our
common stock. In general, a person who has held restricted shares for a period
of one year may, upon filing with the SEC a notification on Form 144, sell
into the market our common stock in an amount equal to the greater of 1% of the
outstanding shares or, if listed on Nasdaq or another national securities
exchange, the average weekly number of shares sold in the last four weeks prior
to such sale. Such sales may be repeated once every three months, and any of
the restricted shares may be sold by a non-affiliate after they have been held
two years.
There is not now, and there may not ever be
an active market for our common stock.
Although the our common stock is quoted on the OTCBB,
trading of our common stock is limited. There can be no assurance a more active
market for such common stock will develop. Accordingly, investors must
therefore bear the economic risk of an investment in our company for an
indefinite period of time. Even if an active market develops for our shares,
Rule 144 promulgated under the Securities Act ("Rule 144"), which
provides for an exemption from the registration requirements under the
Securities Act under certain conditions, requires, among other conditions, a
one-year holding period prior to the resale (in limited amounts) of securities
acquired in a non-public offering without having to satisfy the registration
requirements under the Securities Act. There can be no assurance that we will
fulfill our reporting requirements in the future under the Exchange Act or
disseminate to the public any current financial or other information concerning
us, as is required by Rule 144 as part of the conditions of its
availability.
Preferred stock as an anti-takeover device.
We are authorized to issue 1,000,000 shares of
preferred stock, $.001 par value. The 5,612.8 shares of Series A
Preferred Stock and 1,700 shares of Series B Preferred Stock each convertible
into 2,857 shares of Common Stock (an aggregate of approximately
20,893,000 shares) issued pursuant to the Offering are the first two
series of Preferred Stock to be issued. The preferred stock may be issued in
series from time to time with such designation, voting and other rights,
preferences and limitations as our Board of Directors may determine by
resolution. Unless the nature of a particular transaction and applicable
statutes require such approval, the Board of Directors has the authority to
issue these shares without stockholder approval subject to approval of the
holders of our preferred stock. The issuance of preferred stock may have the
effect of delaying or preventing a change in control of the Company without any
further action by our stockholders.
The offering price of our common stock
being offered by the selling security holders pursuant to this Prospectus may
not bear any relationship to our value or assets.
The Shares offered hereby will be sold on a delayed or continuous
basis by selling security holders other then the Company.  The price at which our common stock may be
offered in the marketplace does not necessarily bear any relationship to our
value or our assets.
16
USE OF PROCEEDS
We will not receive any
proceeds from the sale of our common stock by the selling security holders
under this Prospectus. All such proceeds will be received by the selling
security holders.  However, we expect to
use the proceeds from the exercise of the options and other restricted stock
awards for working capital and other general corporate purposes.
SELLING SECURITY HOLDERS
The Shares offered by
this Prospectus are being registered for reoffers and resales by the selling
security holders, who have acquired or may acquire such Shares pursuant to the
exercise of options or other stock awards granted under our 2006 Plan.  The selling security holders named below, who
are officers and directors of the Company, may resell all, a portion or none of
such Shares from time to time.  In
addition, certain non-affiliates of AMI, not named, may also use this
Prospectus to sell Shares acquired by them pursuant to the exercise of options
or other awards granted to them under our 2006 Plan.
The Company at the time
of filing this Prospectus did not satisfy the registrant requirements for use
of Form S-3.  Therefore, the following
limitation shall apply with respect to both control securities and restricted
securities:  the amount of securities to
be reoffered or resold by means of the reoffer prospectus, by each person, and
any other person with whom he or she is acting in concert for the purpose of
selling securities of the Registrant, may not exceed, during any three-month
period, the amount specified in Rule 144(e).
The following table sets
forth, with respect to each security holder, based upon information available
to us as of June 7, 2007, the number of shares of common stock beneficially
owned before the sale of the Shares offered by this Prospectus; the number of
Shares to be sold; and the percent of the outstanding shares of common stock
owned before the sale of the common stock offered by this Prospectus.
Name of Beneficial Owner
Title of Class
Total Number of
Shares Owned
Beneficially(1)
Number of
Shares Being
Offered for
Resale
Percent of
Class
Before Sale(1)
Edwin A.
  Reilly(2)
Common Stock
1,788,172
(3)
1,950,000
5.8
%
Robert G.
  Coffill, Jr.(2)
Common Stock
1,371,428
(4)(9)
1,475,000
4.5
%
James
  Shanahan(2)
Common Stock
193,750
(5)
225,000
*
Marshall
  Sterman(2)
Common Stock
50,000
(9)
225,000
*
Robert A.
  Baron(2)
Common Stock
50,000
(9)
225,000
*
Frank
  Magliochetti(6)
Common Stock
5,500,000
(7)(8)
2,500,000
17.3
%
Total number of shares
  owned by directors and officers as a group (5 persons)
Common Stock
3,403,350
(3)(4)(5)(9)
6,600,000
11.1
%
*
Less
than 1% of the issued and outstanding shares.
(1)
Except
as otherwise noted in the footnotes to this table, the named person owns
directly and exercises sole voting and investment power over the shares listed
as beneficially owned by such person. Includes any securities that such person
has the right to acquire within sixty days pursuant to options, warrants,
conversion privileges or other rights. 
On June 7, 2007, there were 29,328,995 shares of our common stock issued
and outstanding. As of that date, (i) 15,000,000 shares of Common Stock
were reserved for issuance under our 2006 Plan of which 6,375,000 options had
been granted, in the aggregate; and (ii) approximately 20,893,000 shares
of our common stock were reserved for issuance pursuant to conversion of
preferred stock and approximately 46,638,000 shares reserved for issuance
pursuant to exercise of warrants to purchase common stock.
(2)
The
mailing address of this person is 514 Turnpike Street, Ste. 204, N. Andover, MA
01845.
(3)
Includes
1,716,672 shares of Common Stock underlying stock options held by this person
that are exercisable within the next 60 days; however, does not include 233,328
shares of Common Stock
17
underlying stock options that are not currently exercisable within the
next 60 days which shares vest through December 20, 2007.
(4)
Includes
1,300,000 shares of Common Stock underlying stock options that are held by this
person that are exercisable within the next 60 days; however, does not include
175,750 shares of Common Stock underlying stock options that are not currently
exercisable within the next 60 days of which shares vest over the period ending
on December 20, 2009.
(5)
Includes
43,750 shares of Common Stock underlying stock options that are held by this
person that are exercisable within the next 60 days; however, does not include 181,250
shares of Common Stock underlying stock options that are not currently
exercisable.
(6)
The
mailing address of this person is 61 Mill Pond, North Andover, MA 01845.
(7)
Includes
3,000,000 shares of Common Stock which Mr. Magliochetti agreed to
previously transfer in March 2007 to an independent trust or foundation
over which shares he disclaims any beneficial ownership.  Does not include 2,000,000 shares transferred
by Mr. Magliochetti to two irrevocable trusts for his two daughters over
which shares Mr. Magliochetti disclaims beneficial ownership. Peter S. Johnson, Esq.,
is the trustee who holds voting and dispositive power with respect to the
2,000,000 shares of Common Stock.
(8)
Pursuant
to his employment agreement, dated December 20, 2006, Frank Magliochetti
received options to purchase 6,500,000 shares at market price which vested on
January 19, 2007. Following his resignation from the Company,
Mr. Magliochetti agreed to and rescinded options to purchase
4 million shares of common stock.
(9)
Pursuant
to the 2006 Plan, as amended, Robert G. Cofill, Jr., Marshall Sterman and
Robert A. Baron each were granted options to purchase 225,000 shares of Common
Stock that vest in 36 equal installments ending on December 20, 2009.
PLAN OF DISTRIBUTION
The Shares may be sold or
transferred for value by the selling security holders, or by pledgees, donees,
transferees or other successors in interest to the selling security holders, in
one or more transactions on the OTCBB maintained by the NASD (or any successor
stock exchange), in negotiated transactions or in a combination of such methods
of sale, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at prices otherwise negotiated.  The selling security holders may effect such
transactions by selling the shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of underwriting discounts,
concessions or commissions from the selling security holders and/or the
purchasers of the shares for whom such broker-dealers may act as agent (which
compensation may be less than or in excess of customary commissions).  The selling security holders, and any
broker-dealers that participate in the distribution of the Shares, may be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, and any commissions received by them and any profit on the
resale of the Shares sold by them may be deemed to be underwriting discounts
and commissions under the Securities Act. 
All selling and other expenses incurred by individual selling security
holders will be borne by such selling security holders.
Upon our being notified
by a selling security holder that he has acquired Shares under this Prospectus
or any material arrangement has been entered into with a broker or dealer for
the sale of Shares through a secondary distribution, or a purchase by a broker
or dealer, we will file a prospectus supplement, if required, pursuant to Rule
424(b) under the Securities Act, disclosing (a) the name of each of such
selling security holder and the participating broker-dealers, (b) the number of
Shares involved, (c) the price at which such Shares are being sold, (d) the
commissions paid or the discounts or concessions allowed to such
broker-dealers, (e) where applicable, that such broker-dealers did not conduct
any investigation to verify the information set out or incorporated by
reference in this Prospectus, as supplemented, and (f) other facts material to
the transaction.
18
In addition to any such
number of Shares sold hereunder, a selling security holder may, at the same
time, sell any shares of common stock, including the Shares offered by this
Prospectus, owned by such person in compliance with all of the requirements of
Rule 144 under the Securities Act, regardless of whether such shares are
covered by this Prospectus.
There is no assurance
that any of the selling security holders will sell any or all of the Shares
offered by this Prospectus.
We will pay all expenses
in connection with this offering, other than commissions and discounts of
underwriters, dealers or agents.
DESCRIPTION OF SECURITIES
The following summary of
the terms of our common stock offered hereby does not purport to be complete
and is qualified in its entirety by reference to the applicable provisions of
Delaware law, our Certificate of Incorporation and our By-Laws, as amended.
As set forth in our
Certificate of Incorporation, we currently have authorized capital of
100,000,000 shares of which 99,000,000 shares have been designated as common
stock, par value $.001 per share ("Common Stock") and 1,000,000 shares as
preferred stock, par value $.001 per share ("Preferred Stock").  As of June 22, 2007, there were 29,328,995
shares of Common Stock issued and outstanding. 
There are 5,612.8 shares of Series A Preferred Stock and 1,700 shares of
Series B Preferred Stock issued and outstanding each convertible into 2,857
shares of Common Stock, or an aggregate of approximately 20,893,000 shares.
Common Stock
The holders of
Common Stock are entitled to one vote for each share held of record on all
matters to be voted on by stockholders. There is no cumulative voting with
respect to the election of directors, with the result that the holders of more
than 50% of the shares voting for the election of directors can elect all of
the directors then up for election. The holders of Common Stock are entitled to
receive ratably such dividends when, as and if declared by the Board of
Directors out of funds legally available therefore. In the event of
liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to share ratably in all assets remaining which are available
for distribution to them after payment of liabilities and after provision has
been made for each class of stock, if any, having preference over the Common
Stock. Holders of Common Stock, as such, have no conversion, preemptive or
other subscription rights, and there are no redemption provisions applicable to
the Common Stock. All of the outstanding shares of Common Stock are, and the
shares of Common Stock offered hereby are validly issued, fully paid and non-assessable.
Dividends
In the fiscal year
ended December 31, 2006, we did not pay any cash dividends on our common
stock or preferred stock. We do not intend on paying any dividends on our
common stock in the foreseeable future. The decision to pay dividends on our
common stock will depend on our situation with regard to profitability, cash
availability and credit line restrictions.
Transfer
Agent
The transfer agent for
our common stock is Continental Stock Transfer & Trust Company, 17 Battery
Place, 8
th
Floor, New York, NY 10004.
19
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of AMI, the SEC has
expressed its opinion that such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.  In the event that a claim for indemnification
against such liabilities (other than the payment by AMI of expenses incurred or
paid by a director, officer or controlling person of AMI in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the shares being registered, AMI
will, unless in the opinion of our counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by us is against public policy as
expressed in the Securities Act and we will be governed by the final
adjudication of such issue.
LEGAL MATTERS
The validity of the
shares of our common stock being offered for sale pursuant to this Prospectus
has been passed upon for us by Phillips Nizer LLP, 666 Fifth Avenue, New York,
NY 10103.
EXPERTS
Our consolidated
financial statements for the fiscal year ending December 31, 2006, have been
included in this Prospectus and in this Registration Statement in reliance upon
the report of Mantyla, McReynolds, LLC, independent registered public
accounting firm, on their audit of our financial statements given on authority
of this firm as an expert in accounting and auditing.
PROSPECTIVE INVESTORS MAY
RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE PROSPECTIVE INVESTORS WITH DIFFERENT OR ADDITIONAL
INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT SEEKING AN OFFER
TO BUY IN ANY JURISDICTION WHERE SUCH OFFER, OR SALE IS NOT PERMITTED. THE
INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT ONLY AS OF THE DATE OF THIS
PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR ANY SALE
OF THESE SHARES.
20
PART II
INFORMATION
REQUIRED IN THE REGISTRATION STATEMENT
Item 3.
Incorporation of Documents by
Reference.
The SEC allows us
to "incorporate by reference" information into this Registration Statement,
which means that we can disclose important information to you by referring you
to another document filed separately with the SEC. The information incorporated
by reference is deemed to be part of this Registration Statement, except for
any information superseded by information in this Registration Statement.
The following
documents filed by our Company with the SEC are incorporated herein by
reference:
1.
The
description of our common stock contained in the Registration Statement on Form
SB-2 (SEC file number 333-128526), initially filed with the SEC on September
22, 2005, including all amendments and reports for the purpose of updating such
description;
2.
Our
Quarterly Report on Form 10-QSB for the fiscal quarter ended March 31, 2007,
filed on May 15, 2007;
3.
Our
Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, filed
on March 30, 2007;
4.
Our
Current Report on Form 8-K filed on May 14, 2007;
5.
Our
Current Report on Form 8-K, filed on May 10, 2007;
6.
Our
Current Report on Form 8-K, filed on April 6, 2007;
7.
Our
Current Report on Form 8-K, filed on March 26, 2007;
8.
Our
Current Report on Form 8-K, filed on March 9, 2007; and
9.
Our
Current Report on Form 8-K, filed on February 15, 2007.
All documents that we
subsequently file pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act, prior to the filing of a post-effective amendment indicating that all of
the securities offered pursuant to this Registration Statement have been sold
or deregistering all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such documents. Any statement contained in a
document incorporated by reference in this Registration Statement shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained in this Registration Statement or in
any subsequently filed document that is also incorporated by reference in this
Registration Statement modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
You may read and copy any
reports, statements or other information we have filed at the SEC's Public
Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the Public Reference Rooms.
Our filings are also available on the Internet at the SEC's website at
http:\\www.sec.gov.
II-1
Item
4.
Description
of Securities
We are registering
15,000,000 shares of our common stock pursuant to our 2006 Plan.  Stock options are exercisable for a period of
up to 10 years (or five years in the case of an Incentive Stock Option granted
to a "10% holder" for purposes of Section 422 of the Internal Revenue Code of
1986, as amended) at a price and on a vesting schedule to be determined by our
Board of Directors at the time of the grant of the options.
Item
5.
Interests
of Named Experts and Counsel.
Not Applicable.
Item
6.
Indemnification
of Directors and Officers.
The following
charter provisions and statutes are the only charter provisions and statutes
known to the Registrant that insure or indemnify a controlling person, director
or officer of the registrant in any manner against liability which he or she
may incur in his or her capacity as such.
Article NINTH and
Article TENTH of the Registrant's Certificate of Incorporation provides that:
"NINTH:  The personal liability of the directors of
the Corporation is hereby eliminated to the fullest extent permitted by the
provisions of paragraph 7 of subsection (b) of Section 102 of the General
Corporation Law of the State of Delaware as the same may be amended and
supplemented.  No amendment or repeal of
this Article NINTH shall apply to or have any effect on the liability or
alleged liability of any director of this Corporation for or with respect to
any acts or omissions of such director occurring prior to such amendment or
repeal.
TENTH:  The Corporation shall to the fullest extent
permitted by Section 145 of the Delaware General Corporation Law of the State
of Delaware, as authorized by the Delaware General Corporation Law, as the same
may be amended and supplemented, indemnify any and all persons whom it shall have
power to indemnify under said section from and against any and all of the
expenses, liabilities or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any By-Law, agreement, vote of stockholders or disinterested Directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall inure to the benefit of
the heirs, executors and administrators of such a person."
Delaware General
Corporation Law (the "DGCL"), Section 102(b)(7), enables a corporation in its
original certificate of incorporation, or an amendment thereto validly approved
by stockholders, to eliminate or limit personal liability of a director to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, provided that such provision shall not eliminate or limit
the liability of a director: (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders; (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law; (iii) for any unlawful payment of dividends or stock purchase or
redemption under section 174 of DGCL; or (iv) for any transaction from which
the director derived an improper personal benefit.  Our Amended and Restated Certificate of
Incorporation, as amended, eliminates the liability of directors to the extent
permitted by Section 102(b)(7) of the DGCL.
In addition,
Section 145 of the DGCL which provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in right
of the corporation) by reason of the fact that the person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement that are actually and
reasonably incurred by the person in
II-2
connection with such
action, suit or proceeding, if the person acted in good faith and reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.  A
similar standard is applicable in the case of derivative actions, except that
indemnification only extends to expenses (including attorneys' fees) incurred
in connection with defense or settlement of such action, and no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the court determines that such person is entitled to indemnity
despite the adjudication of liability. 
The statute provides that it is not exclusive of other indemnification
that may be granted by a corporation's by-laws, agreement, vote of stockholders
or disinterested directors or otherwise. 
Our Certificate of Incorporation provides for such indemnification of
our directors and officers as permitted by Delaware law.
Item
7.
Exemption
from Registration Claimed.
Not Applicable.
Item
8.
Exhibits.
4.1
2006 Employee Stock Incentive Plan, as amended**
4.2
Form of Non-Qualified Stock Option Agreement (2006
  Plan)**
4.3
Form of Incentive Stock Option Agreement (2006
  Plan)**
5.1
Opinion of Phillips Nizer LLP**
23.1
Consent of Phillips Nizer LLP**
23.2
Consent of Mantyla, McReynolds, LLC**
** Filed with this
Registration Statement.
Item
9.
Undertakings.
(a)
We hereby undertake:
(1)
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i)
to
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933, as amended;
(ii)
to
reflect in the prospectus any facts or events arising after the effective date
of this Registration Statement (or the most recent post-effective amendment
hereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in this Registration Statement.  Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the SEC pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more
than 20% change in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement; and
II-3
(iii)
to
include any material information with respect to the plan of distribution not
previously disclosed in this Registration Statement or any material change to
such information in this Registration Statement;
PROVIDED, HOWEVER, that
undertakings set forth in paragraphs (i) and (ii) of above do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the SEC
by the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this Registration
Statement.
(2)
That, for
the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at the time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove
from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
(b)
We hereby undertake
that, for purposes of determining any liability under the Securities Act of
1933, each filing of our annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c)
Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and persons controlling our company pursuant
to the foregoing provisions, or otherwise, we have been advised that in the
opinion of the SEC such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by our company of expenses incurred or paid by a director, officer or
controlling person of our company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, our company will, unless in
the opinion of our counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by us is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-4
SIGNATURES
In accordance with the
requirements of the Securities Act, the Registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements of filing
on Form S-8 and authorized this Registration Statement to be signed on its
behalf by the undersigned, in N. Andover, MA on June  26, 2007.
ANDOVER MEDICAL, INC.
By:
/s/ Edwin A. Reilly
Edwin A. Reilly, Chairman of the Board, Chief
Executive Officer, Chief Financial Officer and
Secretary
In accordance with the
requirements of the Securities Act, this Registration Statement was signed by
the following persons in the capacities and on the dates stated.
Signature
Title
Date
/s/
Edwin A. Reilly
Edwin A. Reilly
Chairman of the Board and Chief Executive Officer
  (Principal Executive Officer), Chief Financial Officer (Principal Financial
  and Accounting Officer), Chief Operating Officer and Secretary
June  26, 2007
/s/ Robert G.
  Coffill, Jr.
Robert G.
  Coffill, Jr.
Director
June  26, 2007
/s/ Marshall S.
  Sterman
Marshall S.
  Sterman
Director
June  26, 2007
/s/ Robert A. Baron
Robert A. Baron
Director
June  26, 2007
Exhibit Index
Exhibit Number
Description
4.2
Form of NQSO Agreement (2006 Plan)
4.3
Form of ISO Agreement (2006 Plan)
5.1
Opinion of Phillips Nizer LLP
23.1
Consent of Phillips Nizer LLP
23.2
Consent of Mantyla, McReynolds, LLC
II-5
Exhibit
Index
4.1
2006 Employee Stock Incentive Plan as amended
4.2
Form of Non-Qualified Stock Option Agreement (2006
  Plan)
4.3
Form of Incentive Stock Option Agreement (2006 Plan)
5.1
Opinion of Phillips Nizer LLP (contained in Exhibit
  5.1)
23.1
Consent of Phillips Nizer LL
23.2
Consent of Mantyla, McReynolds, LLC
II-6