Balance Sheet top

December 31,       2008     2007   ASSETS             Current Assets:             Cash and cash equivalents   $ 8,974,282     $ 9,919,727   Recoverable income taxes     958,294       2,281,432   Deferred tax assets     -       281,356   Prepaid expenses     1,269,827       387,636   Total current assets     11,202,403       12,870,151                     Property and equipment, net of accumulated depreciation of $731,518 and $569,712                 at December 31, 2008 and 2007, respectively     -       186,231   Other assets     -       19,900                     Total assets   $ 11,202,403     $ 13,076,282                     LIABILITIES AND STOCKHOLDERS' EQUITY                                   Current Liabilities:                 Accounts payable and accrued expenses   $ 420,590     $ 392,398   Due to stockholder     97,907       -   Income tax payable     83,555       -         602,052       392,398                                       Due to stockholder, net of unamortized discount of $2,610,270 and $2,956,314                 at December 31, 2008 and 2007, respectively     2,426,240       2,088,196   Due to director, net of unamortized discount of $355,126 and $400,976                 at December 31, 2008 and 2007, respectively     153,571       107,721   Other liabilities     -       59,367   Total liabilities     3,181,863       2,647,682                     Stockholders' Equity:                 Preferred Stock; $.0001 par value, 5,000,000 shares authorized, none issued                 and outstanding at December 31, 2008 and 2007     -       -   Common stock; $.0001 par value, 100,000,000 shares authorized,                 52,428,203 issued and  52,423,403 outstanding  at December 31, 2008 and 2007     5,242       5,242   Additional paid-in capital     162,766,096       162,743,356   Treasury stock at cost, 4,800 shares     (2,506 )     (2,506 ) Accumulated deficit     (154,748,292 )     (152,317,492 )                   Total stockholders’ equity     8,020,540       10,428,600                     Total liabilities and stockholders’ equity   $ 11,202,403     $ 13,076,282

Cash Flow Statement top

For the year ended       December 31,       2008     2007                 Cash flows from operating activities:             Net loss   $ (2,430,800 )   $ (150,735,161 ) Adjustments to reconcile net loss to net cash (used in) provided by                  operating activities:                   Depreciation     161,806       112,508     Amortization of debt discount     383,894       340,707     Amortization of consideration receivable from stockholder     -       3,383,387     Provision for doubtful accounts     (35,368 )     646,622     Fair value of warrants and options     22,740       4,025,716     Fair value of shares issued to chief executive officer     -       187,672     Loss on sale of trading right     -       15,250     Impairment-consideration receivable from stockholder     -       145,771,879     Impairment- intangible asset     -       1,085,610   Changes in operating assets and liabilities:                   Accounts receivable     35,368       2,095,131     Accounts receivable-related parties     -       182,338     Due from related party     -       488,273     Incentives receivable from stockholder     -       666,912     Prepaid  and other assets     (862,291 )     (323,474 )   Other receivable     -       150,000     Accounts payable and accrued expenses     (6,751 )     258,772     Due to stockholder     97,907       -     Income tax payable     83,555       (1,454,246 )   Deferred tax assets     281,356       (281,356 )   Recoverable income taxes     1,323,139       (2,281,433 )   Accrued compensation     -       (1,891,885 )                   Net cash (used in) provided by operating activities     (945,445 )     2,443,222                     Cash flows used in investing activities:                   Acquisition of intangible asset     -       (400,000 )   Acquisition of trading rights     -       (1,180,250 )   Proceeds from disposition of trading right     -       1,165,000     Purchases of property and equipment     -       (241,238 )                   Net cash used in investing activities     -       (656,488 )                   Cash flows from financing activities:                                     Proceeds from issuance of shares of subsidiary     -       5,100     Repurchase of shares of subsidiary     -       (5,100 )   Proceeds from exercise of options     -       34,600     proceeds from exercise of warrants     -       185,000                     Net cash provided by financing activities     -       219,600                      Net (decrease) increase in cash     (945,445 )     2,006,334                     Cash, beginning of year     9,919,727       7,913,393                     Cash, end of year   $ 8,974,282     $ 9,919,727                     Supplemental disclosures of cash flow information:                      Cash paid for income taxes   $ -     $ 3,750,000                          Cash paid for interest   $ -     $ -                     Noncash investing and financing activities:                                   Fair value of warrants issued in connection with the acquisition of intangible asset   $ -     $ 756,000                     Disposition of property and equipment in connection with                 cancellation of lease   $ 24,425     $ -