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[logo.jpg]
www.enterconnect.com
 
November 16, 2007
 

 
CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM
 
 

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TOTAL OFFERING
Minimum Subscription Per Investor: $100,000
 
Minimum Offering:        $500,000
Maximum Offering:     $2,000,000
 
OFFERING PRICE PER UNIT $100,000
(Each Unit Consists of Common Stock
With Warrants to Purchase Common Stock)
 

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THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM (THIS “MEMORANDUM”) SUPERSEDES IN
FULL THOSE CERTAIN CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUMS DATED OCTOBER 3
AND 17, 2007 (COLLECTIVELY, THE “PRIOR MEMORNADUM”).  THE PRIOR MEMORANDUM WAS
FURNISHED TO CERTAIN PARTICIPATING BROKERS AND NO SUBSCRIPTION WAS EFFECTED
UNDER IT.  OFFERINGS UNDER THE PRIOR MEMORANDUM HAVE BEEN ABANDONED. SHOULD ANY
PERSON INVEST IN RELIANCE OF THE PRIOR MEMORANDUM OR ANY OTHER DOCUMENT, SUCH
INVESTMENT WILL BE RETURNED TO THAT PERSON IMMEDIATELY UPON RECEIPT, WITHOUT ANY
DEDUCTION. ANY PERSON WHO RECEIVED THE PRIOR MEMORANDUM MAY REQUEST THE COMPANY
TO PROVIDE IT WITH A COMPARISON WITH THIS MEMORANDUM.
 
This Memorandum is solely for the person whose name appears below (the
“Recipient”) and is not to be printed or reproduced in any manner
whatsoever.  The Recipient agrees not to distribute, reproduce or use any of the
information contained in this Memorandum except with the prior written
permission of EnterConnect, Inc.  By accepting delivery of this Memorandum, the
Recipient hereby acknowledges and agrees to be bound by the foregoing
confidentiality provisions.  Further, the Recipient acknowledges the need to
conduct his own thorough investigation and exercise his own due diligence before
considering any investment in the Company.
 

 
RECIPIENT: 
   
November _____, 2007
   
Print Name:
   
Number of Offering Circular:  ____

 

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ENTERCONNECT, INC.
100 Century Center Court, Suite 650
San Jose, CA  95112-4537

 
CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM 

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OFFERING UNITS
(Each Unit Consists of Common Stock
With Warrants to Purchase Common Stock)
 
Minimum Offering:  $500,000
Maximum Offering:     $2,000,000
 
OFFERING PRICE PER UNIT $100,000 

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EnterConnect, Inc., a Nevada corporation (the “Company”) hereby offers (this
“Offering”) units (the “Units”) consisting of certain number of its Common
Stock, par value $0.001 per share (the “Common Stock”) and certain number of
warrants (the “Warrants”) to purchase Common Stock. Each Unit comprises 133,333
shares of Common Stock at a price per share of $0.75 and Warrants to purchase
66,666 shares of Common Stock, at a price per share of $1.50. The Company plans
to use the proceeds of this Offering in connection with its distribution of the
EnterConnect product suite and for general corporate purposes, including working
capital.
 
 
THE PURCHASE OF THE UNITS INVOLVES A HIGH DEGREE OF RISK.  See“RISK FACTORS” for
a discussion of certain factors that should be considered by prospective
investors.

                 
Offering Price
   
Net Proceeds to Company (2) (3)
 
Per Unit (1)
  $
100,000
    $
100,000
 
Minimum Offering
  $
500,000
    $
450,000
 
Maximum Offering
  $
2,000,000
    $
1,800,000
 

 
(1)
Payable in full upon subscription.

 
(2)
Does not include selling commissions of ten percent (10%) of the purchase price
in the event the Company retains the services of a placement agent, in its sole
discretion.  Commissions will be paid only to broker-dealers that are members of
the Financial Industry Regulatory Authority who have agreed to sell the Units on
behalf of the Company.

 
(3)
After deducting expenses of approximately $50,000 for legal, accounting,
printing and other costs associated with the offering.

 

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THE SECURITIES OFFERED HEREIN HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR WITH THE SECURITIES COMMISSION OF ANY STATE.  NEITHER THE
SECURITIES AND EXCHANGE COMMISSION NOR THE SECURITIES COMMISSION OF ANY STATE
HAS REVIEWED OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFERING.  ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 
ALL OFFERS AND SALES OF THE UNITS ARE MADE IN RELIANCE UPON EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), UNDER SECTION 4(2) OF THE SECURITIES ACT AND REGULATION D
PROMULGATED THEREUNDER AND APPLICABLE STATE SECURITIES LAWS.
 
THE UNITS CANNOT BE RESOLD UNLESS THEY ARE SUBSEQUENTLY REGISTERED OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.  THERE IS AND WILL BE NO PUBLIC MARKET
FOR THE UNITS IN THE IMMEDIATE FUTURE.  ACCORDINGLY, THE UNITS SHOULD BE
PURCHASED ONLY AS A LONG-TERM INVESTMENT. THE COMPANY WILL FILE A REGISTRATION
STATEMENT WITHIN THIRTY (30) DAYS FROM THE LAST CLOSING OF THIS OFFERING FOR THE
REGISTRATION OF THE SECURITIES OFFERED HEREIN BUT THERE CAN BE NO ASSURANCE THAT
THE SECURITIES WILL BE REGISTERED AND IF REGISTERED, THERE WILL BE A PUBLIC
MARKET FOR THE SECURITIES.  SEE REGISTRATION RIGHTS PAGE 3.
 
THE UNITS ARE BEING OFFERED AND SOLD ONLY TO PERSONS WHO ARE “ACCREDITED
INVESTORS” WITHIN THE MEANING OF REGULATION D. EACH INVESTOR SHOULD BE
KNOWLEDGEABLE ABOUT, AND EXPERIENCED IN, INVESTMENTS OF THIS TYPE, SHOULD BE
ABLE TO BEAR THE ECONOMIC RISK OF THIS INVESTMENT FOR AN INDEFINITE PERIOD, AND
MAY ACQUIRE UNITS FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO, OR FOR
RESALE IN CONNECTION WITH, ANY DISTRIBUTION OF SECURITIES.
 
PURCHASERS OF UNITS WILL BE REQUIRED TO AGREE, BY SIGNING A CONFIDENTIAL
SUBSCRIBER QUESTIONNAIRE AND A SUBSCRIPTION AGREEMENT (THE FORMS OF WHICH ARE
ATTACHED HERETO AS EXHIBITS C AND D, RESPECTIVELY), THAT THEY WILL NOT OFFER,
SELL OR OTHERWISE PLEDGE, HYPOTHECATE OR TRANSFER THE SECURITIES UNLESS SUCH
SECURITIES ARE REGISTERED OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF ANY APPLICABLE STATE SECURITIES LAW IS
AVAILABLE.
 
THIS PRIVATE PLACEMENT MEMORANDUM DOES NOT CONSTITUTE AN OFFER OR SOLICITATION
WITH RESPECT TO THE UNITS IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS UNAUTHORIZED.
 
NO OFFERING LITERATURE OR ADVERTISING IN WHATEVER FORM MAY BE EMPLOYED IN THE
OFFERING OF THE UNITS EXCEPT FOR THE PRIVATE PLACEMENT MEMORANDUM.  NO DEALER,
SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATION RELATED TO THIS OFFERING OTHER THAN AS SET FORTH IN THIS
PRIVATE PLACEMENT MEMORANDUM.  THE COMPANY RESERVES THE RIGHT TO WITHDRAW OR
MODIFY THIS OFFERING AND RETURN AMOUNTS TENDERED AT ANY TIME PRIOR TO THE
COMPLETION OF THIS OFFERING.  THE COMPANY RESERVES THE RIGHT TO TERMINATE THIS
OFFERING AT ANY SUCH TIME AND TO SELL LESS THAN ALL OF THE UNITS OFFERED
HEREUNDER (BUT NOT LESS THAN THE MINIMUM OFFERING).
 
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THE STATEMENTS CONTAINED IN THE PRIVATE PLACEMENT MEMORANDUM CONCERNING THE
COMPANY, THE RIGHTS, INTERESTS, AND OBLIGATIONS OF THE INVESTORS, AND THE
VARIOUS DOCUMENTS RELATING THERETO ARE MERELY A SUMMARY AND DO NOT PURPORT TO BE
COMPLETE.  COMPLETE ACCESS TO ALL DOCUMENTS AND RECORDS OF THE COMPANY WILL BE
MADE AVAILABLE TO EACH OFFEREE AND HER OR HIS PURCHASER REPRESENTATIVE, IF ANY,
UPON REQUEST OF THE COMPANY AT THE FOLLOWING ADDRESS:
 
ENTERCONNECT, INC.
 100 CENTURY CENTER COURT, SUITE 650
SAN JOSE, CALIFORNIA 95112
ATTENTION: SAM JANKOVICH, CHIEF EXECUTIVE OFFICER
 PHONE 408-441-9500

THE PRIVATE PLACEMENT MEMORANDUM CONSTITUTES AN OFFERING ONLY TO PERSONS
RETURNING THE ENTERCONNECT, INC. CONFIDENTIAL SUBSCRIBER QUESTIONNAIRE TO THE
DESIGNATED REPRESENTATIVE OF THE COMPANY.  ANY REPRODUCTION HEREOF, IN WHOLE OR
IN PART, OR ANY DIVULGENCE OF THE CONTENTS HEREOF, IN WHOLE OR IN PART, WITHOUT
THE PRIOR CONSENT OF THE COMPANY IS PROHIBITED.
 
THE OFFEREE ACCEPTING DELIVERY OF THIS PRIVATE PLACEMENT MEMORANDUM AGREES
PROMPTLY TO RETURN TO THE COMPANY THIS PRIVATE PLACEMENT MEMORANDUM AND ANY
OTHER DOCUMENTS OR INFORMATION FURNISHED TO HIM IF THE OFFEREE DOES NOT AGREE TO
PURCHASE ANY OF THE UNITS OFFERED HEREBY.
 

IMPORTANT NOTICES

PROSPECTIVE INVESTORS MUST NOT CONSTRUE THE CONTENTS OF THIS MEMORANDUM AS
INVESTMENT, LEGAL OR TAX ADVICE.  EACH INVESTOR SHOULD CONSULT HIS OR HER OWN
INVESTMENT ADVISOR, LEGAL COUNSEL AND TAX ADVISOR AS TO THE BUSINESS, LEGAL, TAX
AND OTHER RELATED MATTERS CONCERNING THIS INVESTMENT.

***
 
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NEITHER THE DELIVERY OF THIS MEMORANDUM, NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE MATTERS SET FORTH HEREIN SINCE THE DATE OF THIS MEMORANDUM.

***
 
NO OFFERING LITERATURE OR ADVERTISING IN WHATEVER FORM MAY BE EMPLOYED IN THIS
OFFERING EXCEPT FOR THIS MEMORANDUM.  NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY
REPRESENTATION WITH RESPECT TO THE SECURITIES OFFERED HEREIN.

***

THIS OFFERING CAN BE WITHDRAWN BY THE COMPANY AT ANY TIME BEFORE CONSUMMATION
AND IS SPECIFICALLY MADE SUBJECT TO THE CONDITIONS DESCRIBED IN THIS
MEMORANDUM.  IN CONNECTION WITH THIS OFFERING AND SALE OF THE SECURITIES, THE
COMPANY RESERVES THE RIGHT, IN ITS SOLE DISCRETION, TO REJECT ANY SUBSCRIPTION.

***

STATEMENTS CONTAINED HEREIN AS TO THE CONTENTS OF ANY AGREEMENT OR OTHER
DOCUMENTS ARE SUMMARIES AND, THEREFORE, ARE NECESSARILY SELECTIVE AND
INCOMPLETE. COPIES OF THE DOCUMENTS REFERRED TO HEREIN MAY BE OBTAINED FROM THE
COMPANY AND ARE AVAILABLE FOR INSPECTION AT THE OFFICES OF THE COMPANY.

***

SALES OF THE SHARES CAN BE CONSUMMATED ONLY BY ACCEPTANCE BY THE COMPANY OF THE
OFFERS TO PURCHASE TENDERED TO THE COMPANY BY PROSPECTIVE INVESTORS.
 
***

PROSPECTIVE INVESTORS AND THEIR REPRESENTATIVES, ACCOUNTANTS AND ATTORNEYS ARE
ENCOURAGED TO ASK QUESTIONS OF, AND RECEIVE ANSWERS FROM, THE COMPANY CONCERNING
THE TERMS AND CONDITIONS OF THIS OFFERING AND TO OBTAIN ADDITIONAL INFORMATION
CONCERNING THE COMPANY.
***
 
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NOTICES AND LEGENDS SECURITIES
 
CERTAIN JURISDICTIONS REQUIRE NOTICES TO OFFEREES OF SECURITIES AND/OR LEGENDS
TO BE PLACED ON CERTIFICATES REPRESENTING THE SECURITIES OFFERED BY AN ISSUER,
IMPOSE RESTRICTIONS ON HOW ISSUERS OFFER AND SELL SECURITIES, OR REQUIRE ISSUERS
OF SECURITIES TO ALERT INVESTORS OF CERTAIN LAWS RELATING TO THE OFFER AND SALE
OF SECURITIES.  INVESTORS AND THEIR REPRESENTATIVES SHOULD REVIEW THE MATERIALS
SET FORTH BELOW CAREFULLY TO DETERMINE WHETHER ANY OF THE MATERIALS APPLY TO
THEM.
 
The presence of a legend for any given State reflects only that a legend may be
required by that State and should not be construed to mean an offer or sale may
be made in any particular State. This Memorandum may be supplemented by
additional State legends.  If an investor is uncertain as to whether or not
offers or sales may be lawfully made in any given State, the investor is hereby
advised to contact the Company.

FOR RESIDENTS OF ALL STATES

IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION
OF THE COMPANY AND THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND RISKS
INVOLVED.

THE SECURITIES OFFERED HEREIN HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (THE “COMMISSION”) OR ANY SECURITIES REGULATORY AUTHORITY IN
ANY STATE, NOR HAS THE COMMISSION OR ANY STATE AUTHORITY PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY
NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF AN INVESTMENT IN THE COMPANY FOR AN INDEFINITE PERIOD OF
TIME.

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SPECIFIC STATE DISCLOSURES

CALIFORNIA RESIDENTS ONLY

IT IS UNLAWFUL FOR THE HOLDER OF ANY SECURITY TO CONSUMMATE A SALE OR TRANSFER
OF THIS SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION
THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS
OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER’S RULES.

THE SALE OF SECURITIES WHICH ARE THE SUBJECT OF THIS MEMORANDUM HAVE NOT BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND
THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES IS EXEMPT FROM THE QUALIFICATIONS BY SECTION 25100, 25102 OR 25105
OF THE CALIFORNIA CORPORATIONS CODE.  THE RIGHTS OF ALL PARTIES TO THIS
MEMORANDUM ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED
UNLESS THE SALE IS SO EXEMPT.

CONNECTICUT RESIDENTS ONLY

THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNIFORM SECURITIES ACT OF
CONNECTICUT, AS AMENDED. THE SECURITIES CANNOT BE SOLD OR TRANSFERRED EXCEPT IN
A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT. THESE SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE BANKING COMMISSIONER OF THE STATE OF CONNECTICUT NOR HAS
THE COMMISSIONER PASSED UPON THE ACCURACY OF THIS OFFERING.  ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.

INDIANA RESIDENTS ONLY

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER SECTION 3 OF THE INDIANA
SECURITIES ACT AND THEREFORE, CANNOT BE RESOLD OR TRANSFERRED UNLESS THEY ARE SO
REGISTERED OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

NEW JERSEY RESIDENTS ONLY

THESE SECURITIES ARE OFFERED IN RELIANCE ON AN EXEMPTION FROM REGISTRATION UNDER
THE NEW JERSEY UNIFORM SECURITIES LAW. THE SECURITIES HAVE NOT BEEN REGISTERED
UNDER SAID LAW AND MAY NOT BE RE-OFFERED FOR SALE, TRANSFERRED OR RESOLD WITHOUT
COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SAID LAW OR AN EXEMPTION
THEREFROM. THE BUREAU OF SECURITIES OF NEW JERSEY HAS NOT PASSED UPON THE
ACCURACY OR COMPLETENESS OF THIS MEMORANDUM AND DOES NOT RECOMMEND OR ENDORSE
THE PURCHASE OF THE SECURITIES.
 
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NEW YORK RESIDENTS ONLY

THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM DOES NOT KNOWINGLY CONTAIN ANY
UNTRUE STATEMENT OF A MATERIAL FACT OR KNOWINGLY OMIT TO STATE A MATERIAL FACT
NECESSARY TO MAKE THE STATEMENTS MADE, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH
THEY WERE MADE, NOT MISLEADING. IT CONTAINS A FAIR SUMMARY OF THE MATERIAL TERMS
OF DOCUMENTS PURPORTED TO BE SUMMARIZED HEREIN.

THIS MEMORANDUM HAS NOT BEEN FILED WITH OR REVIEWED BY THE ATTORNEY GENERAL OF
THE STATE OF NEW YORK PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE
STATE OF NEW YORK HAS NOT PASSED ON AND HAS NOT ENDORSED THE MERITS OF THIS
OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

GEORGIA RESIDENTS ONLY

IT IS UNLAWFUL FOR ANY PERSON TO OFFER FOR SALE OR TO SELL ANY SECURITIES TO ANY
PERSON IN THE STATE OF GEORGIA UNLESS: (1) THE SECURITIES ARE SUBJECT TO AN
EFFECTIVE REGISTRATION STATEMENT; (2) THE SECURITY OR TRANSACTION IS EXEMPT
UNDER CODE SECTION 10-5-8 OR CODE SECTION 10-5-9, RESPECTIVELY; OR (3) THE
SECURITY IS A FEDERAL COVERED SECURITY.

Stock certificates issued to an investor that is a resident of Georgia shall
bear the following legend:

THESE SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON PARAGRAPH (13) OF CODE
SECTION 10-5-9 OF THE GEORGIA SECURITIES ACT OF 1973, AND MAY NOT BE SOLD OR
TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT
TO AN EFFECTIVE REGISTRATION UNDER SUCH ACT.

TEXAS RESIDENTS ONLY

The offer and sale of securities to residents of the State of Texas is exempted
from the registration requirements of the Texas Securities Act, as amended,
pursuant to Section 5(I)(a).  The offering is also exempt from registration
pursuant to Regulation 114.4(b) promulgated pursuant to the Texas Securities
Act.
 
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KENTUCKY RESIDENTS ONLY

PURSUANT TO KENTUCKY REVISED STATUTES §292.340, IT IS UNLAWFUL FOR ANY PERSON TO
OFFER OR SELL ANY SECURITY IN KENTUCKY, UNLESS THE SECURITY IS REGISTERED UNDER
CHAPTER 292 OF THE REVISED STATUTE, OR THE SECURITY OR TRANSACTION IS EXEMPT
UNDER THIS CHAPTER, OR THE SECURITY IS A COVERED SECURITY.
 
MARYLAND RESIDENTS ONLY

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE MARYLAND SECURITIES ACT, BY
REASON OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF
THE OFFERING. THESE SECURITIES CANNOT BE RESOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF TO ANY PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE
SECURITIES ACT OR THE MARYLAND SECURITIES ACT, IF SUCH REGISTRATION IS REQUIRED.

FLORIDA RESIDENTS ONLY

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE FLORIDA SECURITIES AND
INVESTOR PROTECTION ACT AND ARE BEING SOLD IN RELIANCE UPON THE EXEMPTION
CONTAINED IN SECTION 517.061(11) OF SUCH ACT.

PURSUANT TO SECTION 517.061(11) OF THE FLORIDA STATUTES, IF SECURITIES ARE SOLD
TO FIVE OR MORE FLORIDA RESIDENTS, FLORIDA INVESTORS WILL HAVE A THREE (3) DAY
RIGHT OF RESCISSION, INVESTORS WHO HAVE EXECUTED A SUBSCRIPTION AGREEMENT MAY
ELECT, WITHIN THREE (3) BUSINESS DAYS AFTER THE FIRST TENDER OF CONSIDERATION
THEREFOR, TO WITHDRAW THEIR SUBSCRIPTION AND RECEIVE A FULL REFUND (WITH
INTEREST) OF ANY MONEY PAID BY THEM.  SUCH WITHDRAWAL WILL BE WITHOUT ANY
FURTHER LIABILITY TO ANY PERSON. TO ACCOMPLISH SUCH WITHDRAWAL, AN INVESTOR NEED
ONLY SEND A LETTER OR TELEGRAM TO THE COMPANY AT THE ADDRESS SHOWN HEREIN
INDICATING HIS INTENTION TO WITHDRAW. SUCH LETTER OR TELEGRAM MUST BE SENT AND
POSTMARKED PRIOR TO THE END OF THE AFOREMENTIONED THIRD BUSINESS DAY. IF SENDING
A LETTER, AN INVESTOR SHOULD SEND IT BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO ENSURE THAT IT IS RECEIVED AND TO EVIDENCE THE TIME WHEN IT IS
MAILED. ANY ORAL REQUESTS FOR RESCISSION SHOULD BE ACCOMPANIED BY A REQUEST FOR
OR CONFIRMATION THAT THE ORAL REQUEST WAS RECEIVED ON A TIMELY BASIS.

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TABLE OF CONTENTS

 
Page
   
SUMMARY OF THE OFFERING
1
   
RISK FACTORS
6
   
INVESTOR SUITABILITY STANDARDS
13
 
 
USE OF PROCEEDS
14
   
CAPITALIZATION
16
   
THE BUSINESS OF THE COMPANY
18
   
RECENT EVENTS
32
   
LEGAL PROCEEDINGS
33
   
DIRECTORS AND OFFICERS OF THE COMPANY; COMPENSATION; OWNERSHIP
34
   
DESCRIPTION OF CAPITAL STOCK
36
   
TERMS OF THE UNITS AND THE OFFERING
37
   
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
42
   
LEGAL MATTERS; EXPERTS
45
   
ACCESS TO ADDITIONAL INFORMATION; OFFERING PROCEDURE
46

APPENDICES

Exhibit A – Subscription Agreement
Exhibit B – Form of Subscriber Questionnaire
Exhibit C – Form of Warrant
Exhibit D – Escrow Agreement
Exhibit E – Historical Financials
 
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Cautionary Note Regarding Forward-Looking Statements

Any statements that express, or involve discussions as to, expectations,
beliefs, plans, objectives, assumptions or future events or performance (often,
but not always, through the use of words or phrases such as “will result,” “are
expected to,” “anticipated,” “plans,” intends,” “will continue,” “estimated,”
and “projection”) are not historical facts and may be forward-looking and,
accordingly, such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results or performance
of the Company to be materially different from any future results or performance
expressed or implied by such forward-looking statements.

Any forward-looking statement in this private placement memorandum and
supporting exhibits speaks only as of the date on which such statements is made,
and the Company undertakes no obligation to update any forward-looking statement
or statements to reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated events. New
factors emerge from time to time, and it is not possible for management to
predict all of such factors. Further, management cannot assess the impact of
each such factor on the business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.

INVESTORS ARE URGED TO EVALUATE INVESTMENT IN THE COMPANY AND TO ASK ALL
RELEVANT QUESTIONS OF MANAGEMENT CONCERNING THE COMPANY AND ITS PROPOSED
BUSINESS.

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SUMMARY OF THE OFFERING
 
The Company
 
EnterConnect Inc., a Nevada corporation (“EnterConnect”, the “Company”, “we” or
“us”) was formed on November 13, 2006 as Priority Software, Inc.  The Company
was formed to acquire, develop, market and sell EnterConnect®, a software
program that provides document management, content management, collaboration,
search and security.  In November 2006, the Company commenced a Regulation D
Offering of its securities to acquire the EnterConnect platform from Enterpulse,
Inc., a Georgia corporation.  The Company offered $100,000 Units comprised of
10% Series A Convertible Debentures and 60,000 warrants to purchase shares of
the Company’s common stock at exercise prices of $2.00, $3.00 and $4.00.  The
Company raised a total of $2,112,732 in the Offering.  In addition, the Company
conducted a private placement on July 31, 2007 of its securities solely to
accredited investors.  Subscriptions were for units at a purchase price of
$25,000, comprised of a 14% Debenture and 50,000 shares of the Company's Common
Stock.  The Company executed subscriptions for investments of $585,500 for a
total of 1,171,000 shares of Common Stock.
 
Our Business

The Company leverages enterprise portal strategies and best practices to deliver
proprietary, ‘business-ready’ employee, customer and partner portal
solutions.  Our products and software-as-a-service (SaaS) offerings are deployed
through our propriety application exchange, SOAAPPS.com, which SaaS enables
other Independent Software Vendors (ISVs) and their applications - making it as
easy as possible for global mid-market companies to find, try and buy software
or services that meet their needs and budget.

On December 21, 2006, the Company and Enterpulse consummated an Asset Purchase
Agreement whereby the Company acquired the EnterConnect platform and certain
related assets and personnel for the aggregate purchase price of $1,065,982.  On
January 5, 2007 to reflect the Company’s acquisition of the EnterConnect
platform, the Company amended its Articles of Incorporation to change its name
to EnterConnect, Inc.

To take products to market quickly, the Company leverages a proprietary Portal
Application Platform, EnterConnect®, which the Company believes contains all of
the core functionality required to rapidly build and deploy new end-user
applications. The core functionality includes content management, digital asset
management, search, security, personalization and end-user
customization.  Utilizing the platform, the Company has developed two primary
‘business-ready’ product lines:  EnterConnect® AppSuite and an application
exchange, SOAAPPS.com, which provide collaborative online environments for
employees, customers and partners.  By developing our products to be economical,
easy-to-use, easy-to-deploy and easy-to-manage, targeted mid-market companies
can easily acquire them either for use on-premise through traditional software
licensing or for use as an outsourced subscription service, also known as
software-as-a-service (SaaS) or on-demand software.  Our ‘business-ready’
products reduce the complexities, deployment cycles and expenses associated with
traditional enterprise software portal implementations. As a result, our
customers incur less risk and lower upfront costs while gaining greater
technology flexibility as well as faster time-to-market and business value.
 
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The Company has, a proprietary portal application platform, two business-ready
product lines, partnerships with software industry leaders – BEA Systems (NASDAQ
– BEAS) and Oracle (NASDAQ – ORCL) – and a tiered distribution channel program,
including direct and indirect channels that both leverage the online application
exchange, SOAAPPS.com.  We currently market the EnterConnect® products and
subscription services to global mid-market companies through both the direct and
indirect channels.

Registration of Securities

The Company plans to become a reporting company. Thereafter, the Company will
endeavor to establish a viable trading market for its securities.  As a public
company, the Company believes that it will have the opportunity to raise
additional capital by leveraging the market value of its common stock, as well
as providing its investors with the potential for capital appreciation of their
securities.

The Company hereby covenants to file a registration statement on behalf of the
investors under this Offering to register the securities offered herein.  Such
statement will be filed within thirty (30) days of the final closing of this
Offering.  See Registration Rights Page 3.

On August 15, 2007, the Company filed a form SB2 with the United States
Securities and Exchange Commission to register, on behalf of and for the benefit
of selling security holders, 4,877,112 shares of its common stock.  The shares
were initially issued to the selling security holders in one or more
transactions exempt from the registration under the Securities Act.

The SB2, as subsequently amended, was declared effective by the Securities and
Exchange Commission on November 9, 2007.

THE OFFERING
 
Securities Offered
A minimum of 5 Units are being offered on a “best efforts – all or none basis”
and on a “best efforts” basis as to the remaining 15 Units. Each Unit comprises
of 133,333 shares of the Company’s common stock, par value $.001 per share
(“Common Stock”) and warrants (the “Warrants”) to purchase 66,666 shares of
Common Stock at $1.50 per share.

 
Offering Price
$100,000 per Unit, minimum investment of one (1) Unit. However, the Company may
waive the minimum subscription amount for an investor in its sole discretion.

 
Use of proceeds
We intend to use the net proceeds from the sale of the Units for general
corporate purposes, including working capital and capital expenditures.  See
“Use of Proceeds.”

 
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Shares outstanding
Assuming the Maximum Offering is completed, immediately following the closing of
this Offering, we will have issued and outstanding a total of 28,858,594 shares
of Common Stock (26,858,594 shares of Common Stock if the Minimum Offering is
completed). No shares of preferred stock are issued or outstanding.

Registration rights
The Company will use its reasonable best efforts, subject to receipt of
necessary information from the Investors, to cause a Registration Statement to
be filed no later than thirty (30) days after the date of final Closing (the
“Required Filing Date”) and to become effective no later than one hundred twenty
(120) days after the Registration Statement was filed with the SEC (the
“Required Effective Date”). If the Registration Statement has not been filed on
or before the Required Filing Date, or has not been declared effective by the
SEC on or before the Required Effective Date because of the Company’s breach of
this provision, or does not remain effective (any such failure being referred to
as an “Event”), then the Investor shall be entitled to receive from the Company,
as payment in full satisfaction for such Event, warrants to purchase an
aggregate number of shares of Common Stock equal to 1.5% of the number of issued
Shares upon the same terms as the Warrants (i) at the time of such Event, and
(ii) upon each monthly anniversary of such Event until the Event is cured, up to
a maximum aggregate amount of 10% of the Shares (the “Late Registration
Warrants”). In the event of changes in the outstanding Common Stock of the
Company by reason of a stock dividend, stock split, reverse stock split,
reorganization, recapitalization, merger, consolidation, liquidation,
separation, combination or exchange of stock, change in the Company’s business
structure or sale or transfer of all or any part of the Company’s business or
assets (referred to as a “Capital Adjustment”), the number of Late Registration
Warrants shall be adjusted consistent with such Capital Adjustment. Until such
time that the resale of the Units is registered pursuant to a registration
statement declared effective by the Securities and Exchange Commission, the
offered securities may be resold only pursuant to Rule 144 under the Securities
Act or pursuant to another exemption from registration under the Securities Act,
if any.

Trading
The offered securities have not been registered under the Securities Act or the
securities laws of any jurisdiction.  Unless and until the securities are
registered, under the Federal securities laws and the requirements of other
jurisdictions complied with, they may be transferred only in transactions that
are exempt from registration under the Securities Act.

 
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Private Offering
Neither the Units, Common Stock, Warrants, nor the Common Stock issuable upon
exercise thereof may be sold or transferred in the absence of an effective
registration under the Securities Act of 1933, as amended, or qualification
under applicable state securities laws or an opinion of counsel satisfactory to
the Company that such registration or qualification is not required.  These
securities may be subject to additional restrictions pursuant to exemptions in
the various states where they are being sold.  There is no assurance that a
public market will develop for these securities in the future.  See “Risk
Factors-No Assurance of a Public Market” and “Limited Transferability of
Securities.”

 
Suitability Standards
An investment in Units is suitable only for certain investors capable of
evaluating the merits and risks of an investment in the Company and of
protecting their interest in the transaction.  Units will be offered and sold
exclusively to persons who satisfy certain minimum income or net worth standards
or otherwise qualify as “accredited investors” under the Federal and state
securities laws.  See “Investor Suitability Standards.”

 
Plan of Distribution
Assistance in private placement of the Units by members of the National
Association of Securities Dealers, Inc on a reasonable “Best Efforts”
basis.  Participating broker-dealers will receive cash selling commissions of
ten (10%) percent of the proceeds of the Units sold, certain Warrants, in
addition to reimbursement of certain expenses. No commissions will be paid on
any Units sold by officers or directors of the Company. See “Use of Proceeds”
and “Plan of Distribution.”

 
Escrow Agreements
All subscription funds will be deposited into a bank trust account with the Law
Firm of Levy & Boonshoft, P.C. located at 477 Madison Avenue, New York, New York
10022 pending receipt of the Minimum Offering.  If Minimum Offering has not been
subscribed by the closing date (which cannot be extended beyond December 30,
2007), all subscription moneys will be refunded directly by the Escrow Agent to
investors without deduction.

 
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Rights of First Refusal
Under the terms of the Subscription Agreement to be executed by each Purchaser,
holders of Common Stock, Warrants, and Common Stock issued upon exercise thereof
will be subject to a right of first refusal in favor of the Company upon any
transfer of such securities, subject to certain exceptions for transfers to
immediate family members.  The Company waives ‘Rights of First Refusal’ upon an
effective registration statement of the securities of this offering.  See
“Limited Transferability of Securities.”

 
Disclosure Update
The Company will provide Purchasers of Common Stock and Warrants with a
supplement to this Memorandum at the beginning of the exercise period indicating
any material changes affecting the Company at such date or may provide regular
quarterly reports and annual reports to all Purchasers.

 
Offering Period; Closing
The Offering will terminate on the earlier of November 30, 2007 or when the
entire 20 Units comprising the Maximum Offering are subscribed for and sold. The
Offering may be extended in the sole discretion of the Company for an additional
30 days to December 31, 2007 at which time it will fully and finally terminate.

 
Risk Factors
A PURCHASE OF UNITS IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK.  SEE
“RISK FACTORS.”

 
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RISK FACTORS
 
Forward-looking statements include statements relating to the Company’s ability
to maintain existing customer contracts and secure additional customer
contracts, expected trends in the software as a service industry, expected
increases in revenues derived from product sales and services, and the Company’s
ability to increase sales, marketing and product development expenditures to
levels required for the Company to compete in its market.  Other forward-looking
statements can be identified by the use of forward-looking terminology such as
“may,” “will,” “should,” “expect,” “anticipate,” “continue,” “plans,” and
“intends.”  Prospective purchasers are cautioned that all forward-looking
statements are subject to risks and uncertainties including, but not limited to,
the risks set forth herein.
 
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE IN NATURE AND INVOLVE A
HIGH DEGREE OF RISK OF LOSS AND IMMEDIATE SUBSTANTIAL DILUTION. THEREFORE, EACH
PROSPECTIVE INVESTOR SHOULD, PRIOR TO PURCHASE, CONSIDER VERY CAREFULLY THE
FOLLOWING RISK FACTORS AS WELL AS ALL OTHER INFORMATION SET FORTH ELSEWHERE IN
THIS PRIVATE PLACEMENT MEMORANDUM.
 

The Investor’s Risk Losing All of their Investment

If the Company raises only the minimum offering and no more, investors risk
losing all of their investment if additional capital is not raised in three (3)
months.

The Company has a Limited Operating History

The Company was only recently formed and has no operating history in its
intended field of endeavor and has sustained substantial losses. Since
inception, the Company has suffered as of March 31, 2007 a net loss of
$1,016,771 ($_1,636,381 as of _June 30, 2007). There can be no assurance that
the Company will be successful in building its business or that its business
model will prove to be successful.

Our Auditors have Issued a Going Concern Opinion

Our independent public accountants have expressed a going concern opinion of our
financial statements as of March 31, 2007.  This means there is substantial
doubt that the Company can continue as a going concern without additional
financing and/or generating profits.  If we are unable to do so, we will likely
have to cease operations and you may lose all of your investments.  The Company
anticipates remaining unprofitable through its fiscal year ending March 31,
2008.  The Company anticipates becoming profitable in April of 2008.

The Company has Material Future Financing Needs

The Company's business model requires additional financing in order to expand
its marketing and sales efforts. No assurance can be given that additional
financing will be available to the Company on acceptable terms, if at all. If
the Company raises additional funds by issuing additional equity securities,
further dilution to existing equity holders will result. If adequate additional
funds are not available, the Company may be required to curtail significantly
its long-term business objectives and its results from operations may be
materially and adversely affected.  Accordingly, there is substantive doubt
whether the Company can fulfill its business plan or commence revenue generating
operations.
 
6

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If We Are Unable To Raise Capital In The Future, We May Be Unable To Fund
Operating Cash Shortfalls

There can be no assurance that additional financing, may be available to us on
acceptable terms, or at all. Our inability to obtain any needed financing could
hinder our ability to fund our operations and our sales efforts.  Any financing
may cause significant dilution to existing stockholders. Any debt financing or
other financing of securities senior to common stock likely will include
financial and other covenants that will restrict our flexibility. At a minimum,
we expect these covenants to include restrictions on our ability to pay
dividends on our common stock.

Restricted Securities

All of the shares of Common Stock outstanding prior to this Offering, or issued
in connection with the conversion of the Debentures or the Warrants, are
“restricted securities,” as that term is defined under Rule 144 promulgated
under the Securities Act.  In general, under Rule 144, a person (or persons
whose shares are aggregated) who has satisfied a one-year holding period may
under certain circumstances sell without registration under the Securities Act
within any three-month period that number of shares which does not exceed the
greater of one percent of the then outstanding Common Stock or the average
weekly trading volume of such stock during the four calendar weeks prior to such
sale.  Rule 144 also permits, under certain circumstances, the sales of shares
without any volume limitation by a person who has satisfied a two-year holding
period and who is not, and has not been for the preceding three months, an
affiliate of the Company.

There is No Public Market for Our Common Stock, and even if a Market Develops,
It Will Likely be Thin and Subject To Manipulation

There is no public market for our common stock, and we can provide no assurance
that a public market for our common stock will develop in the future. Even if a
public market does develop, the volume of trading in our common stock will
presumably be limited and likely dominated by a few individuals. The limited
volume, if any, will make the price of our common stock subject to manipulation
by one or more stockholders and will significantly limit the number of shares
that one can purchase or sell in a short period of time. An investor may find it
difficult to dispose of shares of our common stock or obtain a fair price for
our common stock in the market.
 
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If a Market for Our Common Stock Develops, the Market Price for Our Common Stock
Will Likely Be Volatile and May Change Dramatically At Any Time
 
If a market for our common stock develops, the market price of our common stock,
like that of the securities of other early-stage companies, may be highly
volatile. Our stock price may change dramatically as the result of announcements
of our quarterly results, the rate of our expansion, significant litigation or
other factors or events that would be expected to affect our business or
financial condition, results of operations and other factors specific to our
business and future prospects. In addition, the market price for our common
stock may be affected by various factors not directly related to our business,
including the following:
 
 
●
intentional manipulation of our stock price by existing or future stockholders;

 
 
●
short selling of our common stock or related derivative securities;

 
 
●
a single acquisition or disposition, or several related acquisitions or
dispositions, of a large number of our shares;

 
 
●
the interest, or lack of interest, of the market in our business sector, without
regard to our financial condition or results of operations;

 
 
●
the adoption of governmental regulations and similar developments in the United
States or abroad that may affect our ability to offer our products and services
or affect our cost structure;

 
 
●
developments in the businesses of companies that purchase our products; and

 
 
●
economic and other external market factors, such as a general decline in market
prices due to poor economic indicators or investor distrust.

Our Ability to Issue Preferred Stock and Common Stock May Significantly Dilute
Ownership and Voting Power, Negatively Affect the Price of Our Common Stock and
Inhibit Hostile Takeovers

Under our Articles of Incorporation, we are authorized to issue up to 10,000,000
shares of preferred stock and 100,000,000 shares of common stock without seeking
stockholder approval. Our board of directors has the authority to create various
series of preferred stock with such voting and other rights superior to those of
our common stock and to issue such stock without stockholder approval. Any
issuance of such preferred stock or common stock would dilute the ownership and
voting power of existing holders of our common stock and may have a negative
effect on the price of our common stock. The issuance of preferred stock without
stockholder approval may also be used by management to stop or delay a change of
control, or might discourage third parties from seeking a change of control of
our company, even though some stockholders or potential investors may view
possible takeover attempts as potentially beneficial to our stockholders.

Arbitrary Determination of Offering Price

The offering price for the shares of Common Stock was determined arbitrarily,
and such price should not be considered an indication of the actual value of the
Company as it bears no relationship to the book value, assets, or earnings to
the Company or to other recognized criteria of value.
 
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Immediate Dilution of Offering Price

The price of the securities offered herein will immediately drop because
offering price has no bearing to book value.  If Company were to liquidate now,
the investors would get nothing in return.

We depend on key management personnel for our future success

Our success will depend in large part on the continued services of Sam
Jankovich, our Chairman and Chief Executive Officer. The loss of his services
may materially and adversely affect our business and results of operations.  In
addition, if any key management personnel resign to join a competitor or form a
competing company, the loss of such personnel, together with the loss of any
clients or potential clients to such competitor, could materially and adversely
affect the business and results of operations of the company.  Currently, we do
not have any agreements with Mr. Jankovich prohibiting him from joining
competitors, forming competing companies, soliciting existing clients or
disclosing information deemed confidential to us; there is no guarantee that
such agreements will be effective in preventing the key management personnel
from engaging in the prohibited actions.  We cannot guarantee that we will be
able to replace any of these individuals in the event their services become
unavailable.

Expansion and Retention of Client Accounts

Our success depends on our ability to attract and retain clients, these
clients can terminate their accounts on little or short notice. Currently, we
have engaged in only limited sales.  Accordingly, we may lose or gain
significant accounts each year.  There can be no assurance that we can retain
our existing clients and add new clients as it attempts to expand its
business.  See “Business - Customers.”

Competition

Although we believe we will be able to compete on the basis of the quality of
our service, price and reputation, and build personal relationships with
clients, there can be no assurance that we will be able to generate or improve
our competitive position as we implements our proposed marketing program.  See
“Business – Competition.”

Control by Current Stockholders

Our directors, officers, 5% stockholders and their affiliates control
approximately 72% of our outstanding shares of common stock and are expected to
continue to control a majority of our outstanding common stock following any
financing transactions projected for the foreseeable future. These directors,
officers and affiliates effectively control all matters requiring approval by
the stockholders, including any determination with respect to the acquisition or
disposition of assets, future issuances of securities, declarations of dividends
and the election of directors. This concentration of ownership may also delay,
defer, or prevent a change in control and otherwise prevent stockholders other
than our affiliates from influencing our direction and future.
 
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We are currently controlled by Sam Jankovich, our Chairman and Chief Executive
Officer, and Private Capital Group, LLC (“PCG”), whose principal,
Michael Wainstein, serves as our Director and Treasurer, who own approximately
34.4% and 29.8% of our Common Stock respectively.  The principal stockholders
will continue to own Common Stock giving them voting control over us.  Since the
Common Stock does not have cumulative voting rights, they will be able to
determine and direct our affairs and policies and the use of all funds available
to us.  Conversely, purchasers of Common Stock will have no effective voice in
the management of the Company.  See “Security Ownership of Management and
Certain Security Holders.”

Absence of Cash Dividends

It is unlikely we will declare or pay dividends on Common Stock in the
foreseeable future out of future earnings, if any, even if permitted to do so
under applicable law.  We currently intend to retain earnings, if any, to fund
our continued operations and proposed expansion.  See “Dividend Policy.”

If the protection of intellectual property is inadequate, competitors may gain
access to our content and technology

We seek to develop and maintain the proprietary aspects of our products and
technology. To protect this proprietary content and technology, we rely
primarily on a combination of contractual provisions, confidentiality
procedures, trade secrets and patent, copyright, and trademark laws.

We seek to avoid disclosure of our trade secrets through a number of means
including, but not limited to, requiring those persons with access to our
proprietary information to execute confidentiality agreements.  We seek to
protect our software, documentation, and other written materials under trade
secret and copyright laws, which afford only limited protection.  We cannot be
certain that any of our proprietary rights with respect to our products and
services will be viable or of value in the future because, among other reasons,
the validity, enforceability and type of protection of proprietary rights in our
industries are uncertain and still evolving and many different entities are
simultaneously seeking intellectual property rights relevant to software based
applications.

We have no patents and may not receive a patent related to any of our products
and services.  Our future patents, if any, may be successfully challenged,
rendering them invalid or unenforceable, or may not provide us with any
competitive advantages.  We may not develop proprietary products or technologies
that are patentable and other parties may have dominating patent
claims.  Additionally, other parties may have patent rights relating to the same
subject matter covered by patents issued to us, enabling them to use the
patented technology or license it to others without our consent.  The validity
and enforceability of our future patents, if any, may also be affected by future
legislative actions or judicial decisions.

Our trademarks may not provide us with any competitive advantages.  None of our
trademarks may be registrable, and other parties may have priority of use of
such trademarks or variants thereof.
 
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Despite our efforts to protect our proprietary rights, unauthorized parties may
attempt to copy aspects of our products and intellectual property or to obtain
and use information that we regard as proprietary.  Policing unauthorized use of
our products is difficult, and while we are unable to determine the extent to
which piracy of our intellectual property exits, piracy can be expected to be a
persistent problem.  In addition, the laws and enforcement mechanisms of some
foreign countries do not protect our proprietary rights as much as do the laws
of the United States.  Our means of protecting our proprietary rights may not be
adequate and our competitors may independently develop similar technology,
duplicate our products, or design around patents issued to us, our content, or
other intellectual property.

There has been a substantial amount of litigation in the Internet industry
regarding intellectual property rights.  It is possible that in the future third
parties may claim that we or our current or potential future products or
services infringe upon their intellectual property.  We expect that developers
and providers of e-commerce solutions will increasingly be subject to
infringement claims as the number of products and competitors in this industry
segment grows and the functionality of products in different industry segments
overlaps.  Any claims, with or without merit, could be time-consuming, result in
costly litigation, cause delays in implementation of our services or require us
to enter into license agreements.  Licenses, if required, may not be available
on terms acceptable to us, which could seriously harm our business.

Our business is subject to U.S. and foreign government regulation of the
Internet.

We are affected by government regulation of the Internet by the United States,
at the state, local and federal government levels, and foreign governmental
bodies.  Because new legislation is continuously being created and implemented,
we are not certain how our business will be impacted and cannot predict if or
how any future legislation would impact our business.  In addition, we may be
indirectly affected by certain new legislation to the extent it impacts our
clients and potential clients.

We will incur increased costs in the event that we become a public company.

As a public company, with a class of reporting securities, we will incur
significant legal, accounting and other expenses that we did not incur as a
private company. We will incur costs associated with our public company
reporting requirements. We also anticipate that we will incur costs associated
with the new rules implemented by the Securities and Exchange Commission. We
expect these rules and regulations to increase our legal and financial
compliance costs and to make some activities more time-consuming and costly.

No public market exists for the trading of our securities.

Our selling stockholders are offering to sell shares of our common stock at a
fixed price of $1.00 per share. Our common stock is not traded on any exchange
at this time, but we will seek to have it listed to trade on the OTC Bulletin
Board (“OTCBB”). Factors such as announcements by us of the financial results,
the gain or loss of customers, changes in management, regulatory changes, trends
in the industry or stock market and announcements by competitors, among other
things, could cause the market price of our securities to fluctuate
significantly.
 
Our stock is a penny stock and there are significant risks related to buying and
owning penny stocks.

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Rule 15g-9 under the Securities Exchange Act of 1934 imposes additional sales
practice requirements on broker-dealers that sell non-NASDAQ listed securities
except in transactions exempted by the rule, including transactions meeting the
requirements of Rule 506 of Regulation D under the Securities Act and
transactions in which the purchaser is an institutional accredited investor (as
defined) or an established customer (as defined) of the broker or dealer. 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 sale. Consequently, this rule may
adversely affect the ability of broker-dealers to sell our securities and may
adversely affect your ability to sell any of the securities you own.

The Securities and Exchange Commission regulations define a “penny stock” to be
any non-NASDAQ equity security that has a market price (as defined in the
regulations) of less than $5.00 per share or with an exercise price of less than
$5.00 per share, subject to some exceptions. For any transaction by a
broker-dealer involving a penny stock, unless exempt, the rules require
delivery, prior to any transaction in a penny stock, of a disclosure schedule
prepared by the SEC relating to the penny stock market. Disclosure is also
required to be made about commissions payable to both the broker-dealer and the
registered representative and current quotations (bid and ask prices) for the
securities. Finally, monthly statements are required to be sent disclosing
recent price information for the penny stock held in the account and information
on the limited market in penny stocks. Our market liquidity could be severely
adversely affected by these rules on penny stocks.

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INVESTOR SUITABILITY STANDARDS
 
INVESTMENT IN THE UNITS INVOLVES A HIGH DEGREE OF RISK AND IS SUITABLE ONLY FOR
THOSE INVESTORS WHO HAVE SUBSTANTIAL FINANCIAL RESOURCES IN RELATION TO THEIR
INVESTMENT AND WHO UNDERSTAND THE PARTICULAR RISK FACTORS OF THIS
INVESTMENT.  IN ADDITION, A PURCHASE OF UNITS IS SUITABLE ONLY FOR INVESTORS WHO
NEED NO LIQUIDITY IN THEIR INVESTMENTS AND ARE WILLING TO ACCEPT SUBSTANTIAL
RESTRICTIONS ON THE TRANSFER OF THESE SECURITIES.
 
Investor Suitability
 
The Company intends to offer and sell the Units to a limited number of
“accredited investors” as such term is defined under Regulation D promulgated
under the Securities Act.  Offers and sales will be made only to persons whom
the Company believes (i) have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of the
proposed investment, and (ii) can bear the economic risks of the investment.
 
The Company reserves the right to determine whether any prospective investor
meets the above requirements and will have the absolute discretion not to accept
any subscription for any reason.
 
Each investor will be required to represent in writing in a Subscription
Agreement (see Appendices) and Confidential Subscriber Questionnaire (see
Appendices) that he or she meets the requirements described above and can afford
to bear the risk of the loss of his or her entire investment in the securities
offered hereby.  The Company may also make such further inquiries as it deems
appropriate to determine whether an investment in the Units is suitable for any
prospective investor.
 
Ability to Accept Limitations of Transferability
 
It is unlikely that investors will be able to liquidate their investments in the
Units in the event of an emergency or for any other reason.  A public market for
the Units does not exist and it is not anticipated that one will ever
develop.  Moreover, the transferability of the Units is subject to certain
restrictions set forth in the Subscription Agreement, including a right of first
refusal granted to the Company, and will be affected by restrictions on resale
imposed under federal and state securities laws.  See “Risk factors.”
 
EACH PROSPECTIVE INVESTOR SHOULD OBTAIN THE ADVICE OF HIS OR HER ATTORNEY, TAX
CONSULTANT AND BUSINESS ADVISOR WITH RESPECT TO THE LEGAL, TAX AND BUSINESS
ASPECTS OF THIS INVESTMENT PRIOR TO SUBSCRIBING FOR THESE SECURITIES.
 
THIS MEMORANDUM SHALL NOT CONSTITUTE AN OFFER TO SELL TO, OR A SOLICITATION OF
AN OFFER TO BUY FROM, ANY PERSON WHO DOES NOT MEET THE SUITABILITY STANDARDS SET
FORTH HEREIN AND IN THE SUBSCRIPTION AGREEMENT.
 
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USE OF PROCEEDS
 
The net proceeds from this Offering will be used primarily for the development
of enterprise software-as-a-service and related direct and support operations.

We reserve the right to have significant discretion with respect to the
application of such proceeds at any time during or after this Offering. In the
event that our plans change, our assumptions change or prove to be inaccurate,
or the proceeds of the Offering prove to be insufficient, it may be necessary or
advisable to reallocate proceeds or to use proceeds for other purposes, or we
may be required to seek additional financing or we may be required to curtail
our operations.  As a result of the foregoing, our success will be affected by
our discretion and judgment with respect to the application and allocation of
the proceeds of this Offering.  The proceeds of the Offering may be deposited in
interest or non-interest bearing accounts, or invested in government
obligations, certificates of deposit, commercial paper, money market accounts or
similar investments, which may not be insured.

The following table sets forth the estimated application of proceeds from the
sale of the minimum and maximum number of Units being offered hereby:

   
Minimum
   
Maximum
               
Marketing (1)
  $
150,000
    $
600,000
 
Product Development (2)
  $
100,000
    $
400,000
 
Working Capital (3)
  $
150,000
    $
750,000
 
Broker/Dealer (4)
  $
50,000
    $
200,000
 
Offering Costs (5)
  $
50,000
    $
50,000
 
Total Proceeds
  $
500,000
    $
2,000,000
 

 
(1)
Represents expenditures for marketing to partners and customers.

 
 
(2)
Represents estimates for product development and services within specific
markets in which the Company is engaged.

 
 
(3)
Represents reduction in accounts payable, and general corporate purposes.

 
 
(4)
Represents commissions to be paid to broker-dealers that participate in the
offering.  To the extent any of the Units are sold by officers or directors of
the Company, no commissions will be paid and the additional proceeds as a result
of the savings of the commissions will be used for working capital.

 
 
(5)
Includes legal, accounting, printing, and other expenses associated with this
offering.

 
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The foregoing represents our present business intentions with respect to the
allocation of proceeds of this offering based upon our present plans and
business conditions.  The occurrence of certain unforeseen events or changed
business conditions could result in the application of the proceeds of the
offering in a manner other than as described in this prospectus.  See “Risk
Factors” for additional discussions of these risks.
 

 
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CAPITALIZATION
 
The Company had 26,191,928shares of Common Stock issued and outstanding as of
the date of this Memorandum. The following table sets forth the capitalization
of the Company as of the date hereof, giving effect to the Minimum Offering
(assumed net proceeds of $450,000) and to the Maximum Offering (assumed net
proceeds of $1,800,000), with an offering price of $0.75 per share.

   
Actual
   
Minimum Offering
   
As Adjusted Maximum Offering
 (1)
Cash
  $
1,936
    $
401,936
    $
1,501,936
 
Total Liabilities
  $
450,073
    $ 1,035,573 (1)   $ 1,035,573 (1)
Stockholders’ equity:  Preferred stock at $0.001 par value; 10,000,000 shares
authorized; no shares issued and outstanding
   
-0-
     
-0-
     
-0-
 
Common stock at $0.001 par value;100,000 shares authorized; 26,191,928, Shares
issued and outstanding (1)
  $
26,191,928
    $
26,858,594
    $
28,858,594
 
Additional paid-in capital
  $
4,144,176
    $
4,544,176
    $
5,644,176
 
Deferred Compensation (2)
  $ (2,000,000 )   $ (2,000,000 )   $ (2,000,000 )
Accumulated deficit
  $ (1,636,381 )   $ (1,636,381 )   $ (1,636,381 )
Total stockholders’ equity (1)
  $
533,987
    $
935,320
    $
2,040,654
 

 
See accompanying notes to the financial statements.

(1)
Gives effect to the Company’s receipt of gross proceeds of $585,500 in July and
August 2007 from bridge loans which would increase the as adjusted total
liabilities to $1,035,573. The Company conducted a private placement of its
securities solely to accredited investors.  Subscriptions were for units at a
purchase price of $25,000, comprised of a 14% Debenture and 50,000 shares of the
Company's Common Stock.  The Company executed subscriptions for investments of
$585,500 for a total of 1,171,000 shares of Common Stock.

(2)
Gives effect to the issuance of 1,000,000 shares of its shares of common stock
to Global Media Fund (“Global’) related to a Memorandum of Understanding with
Global to provide marketing and advertising services for a term of twelve (12)
months.  In consideration for the services, EnterConnect issued 1,000,000 shares
of its common stock to Global at an agreed valuation of $2,000,000.  

 
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SECURITY HOLDERS
 
The Company has an aggregate of 58 shareholders.  The following table reflects
owners of five percent (5%) or more of all of the issued and outstanding shares
of the Company’s Common Stock as of the date hereof and the percentage of shares
held by each shareholder, all on a fully-diluted basis.

The table also identifies owners of shares who are officers or directors of the
Company.

PRE-OFFERING TABLE
 
As of the date of this Memorandum
 
Names of Shareholders
 
Number of Shares Held
   
Approximate Percentage Holding
               
Sam Jankovich, Chairman, President and Chief Executive Officer
   
9,000,000
      34.36 %
Private Capital Group LLC (Michael Wainstein, Director and Treasurer)
   
7,800,000
      29.78 %
Dean Galland, Chief Operating Officer
   
2,109,400
      8.05 %
Others
   
7,282,528
      27.80 %
Total
   
26,191,928
      100.00 %

The table below sets forth the post-Offering capitalization of the Company,
assuming that the Maximum Offering is subscribed for and all Warrants are
immediately exercised.

POST-OFFERING TABLE
 
Assuming Subscription for Maximum Offering
 
Names of Shareholders
 
Number of Shares Held
   
Approximate Percentage Holding
               
Sam Jankovich, Chairman, President and Chief Executive Officer
   
9,000,000
      31.18 %
Private Capital Group LLC (Michael Wainstein, Director and Treasurer)
   
7,800,000
      26.03 %
Dean Galland, Chief Operating Officer
   
2,109,400
      7.30 %
Others
   
7,282,528
      25.23 %
Investors (assuming all warrants are exercised)
   
2,666,666
      9.24 %
Total
   
28,858,594
      100.00 %

 
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THE BUSINESS OF THE COMPANY
 
Overview
 
EnterConnect, Inc. (“EnterConnect”, the “Company” or “our”) leverages enterprise
portal strategies and best practices to deliver proprietary, ‘business-ready’
employee, customer and partner portal solutions.  The Company’s products and
software-as-a-service (SaaS) offerings are deployed through a propriety
application exchange, SOAAPPS.com, which SaaS enables other Independent Software
Vendors (ISVs) and their applications - enabling global mid-market companies to
find, try and buy software or services that meet their needs and budget.

To take products to market quickly, the Company leverages a proprietary Portal
Application Platform, EnterConnect®, which the Company believes contains all of
the core functionality required to rapidly build and deploy new end-user
applications. The core functionality includes web content management, digital
asset management, search, security, personalization and end-user
customization.  Utilizing the platform, the Company has developed two primary
‘business-ready’ product lines:  EnterConnect® AppSuite and the application
exchange, SOAAPPS.com, which provide collaborative online environments for
employees, customers and partners.  By developing the EnterConnect products to
be economical, easy-to-use, easy-to-deploy and easy-to-manage, targeted
mid-market companies can easily acquire them either for use on-premise through
traditional software licensing or for use as an outsourced subscription service,
also known as software-as-a-service (SaaS).  The Company’s ‘business-ready’
products reduce the complexities, deployment cycles and expenses associated with
traditional enterprise software portal implementations. As a result, our
customers incur less risk and lower upfront costs while gaining greater
technology flexibility as well as faster time-to-market and business value.  

The Company has a proprietary portal application platform, two business-ready
product lines, partnerships with software industry leaders – BEA Systems (NASDAQ
– BEAS) and Oracle (NASDAQ – ORCL) – and a tiered distribution channel program,
including direct and indirect channels that both leverage the online application
exchange, SOAAPPS.com. We currently market the EnterConnect® AppSuite product
and subscription service to global mid-market companies through both the direct
and indirect channels.

Industry Background

Enterprise Portals
Leading technology analyst firm, Gartner Inc., defines a portal as "access to
and interaction with relevant information assets (information/content,
applications and business processes), knowledge assets and human assets by
select targeted audiences, delivered in a highly personalized manner."  Some of
the benefits of enterprise portals include improved communications and
collaboration, increased productivity, improved customer and partner service
delivery, increased revenue and reduced operating costs. CIO surveys reveal that
portals continue to be among the top spending priorities at companies.  Goldman
Sachs’ CIO survey placed portals alongside security and storage software in the
top tier of spending priorities for 2005.  A Smith Barney CIO survey showed
portals as the highest application spending priority, coming out just ahead of
traditional stalwarts ERP and CRM. A March 2007 report by International Data
Corporation (IDC) states that 2006 worldwide enterprise portal revenue grew by
10.4% to an estimated $896 million and is predicted to grow to $1.4 billion in
2011.
 
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Traditionally, companies have had three options when seeking to deploy an
enterprise portal: develop from scratch; develop using a portal framework; or
deploy an enterprise portal software solution.  Each of these options can enable
a company to realize the benefits enterprise portals provide, but they also
introduce a variety of other challenges, including:

 
·
Lengthy and costly deployments:  Companies choosing to develop a portal from
scratch or utilizing a portal framework require expensive development resources
either internally or on an outsourced basis. Typical deployment cycles vary with
portal complexity, but range from 3-18 months.  Companies choosing to deploy an
enterprise portal software solution save on development expenses and shorten
their deployment cycles to 3-6 months, but invest more in licensing, maintenance
and professional services fees.

 
·
High cost of ownership:  Companies choosing to develop portals or to deploy an
enterprise portal software solution will incur a high total cost of ownership as
a result of expensive information technology (IT) resources required for upfront
development, deployment, systems integration and ongoing customizations,
support, administration and upgrades as well as costly licensing and maintenance
fees.

The impact of these challenges vary from increased risks and costs to increased
time-to-value.  To address these challenges, mid-market companies are turning to
business-ready portal software applications available in on-premise versions and
as outsourced services, also known as software-as-a-service (SaaS) or on-demand
software.  Business-ready portal applications are pre-configured for key
business-use-cases, enabling companies to rapidly deploy new portals with
significantly less upfront investment.  Business-ready portal applications can
be deployed in just a few weeks and often deliver the majority of the
functionality needed to achieve business results quickly.  Companies then only
need to invest in development or professional services to complete the minor
customizations required.

Emergence of Software-as-a-Service (SaaS)
The traditional software deployment model for packaged applications requires
customers to make capital investments in upfront licensing fees along with an
additional 20-30% average investment in professional service fees for lengthy
implementation cycles.  Software-as-a-Service (SaaS) redefines this traditional
deployment model, empowering customers with a dynamic “pay-as-you-go or
subscription” service.  SaaS customers can access and utilize software through
any standard Web browser – at anytime from anywhere. SaaS is not just about a
new way of creating, delivering, selling and utilizing applications. SaaS
enables companies to subscribe to a variety of application services, available
via the Internet on an as-needed basis with little or no implementation services
required and without the need to install and manage third-party software
in-house.

The Software-as-a-Service (SaaS) business model is designed to address seven
major challenges in the software industry today:
 
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·
the availability of enterprise application services to global customers of all
sizes and across all industries;

 
 
·
a fully outsourced service accessible over the Internet and through a variety of
devices, including PCs, laptop computers, mobile phones, and PDAs;

 
 
·
rapid and simple deployment, configuration, and training;

 
 
·
a comprehensive set of application features;

 
 
·
a scalable, secure application architecture that can economically support
hundreds of thousands of customers simultaneously;

 
 
·
the ability to integrate with businesses’ existing third party and internally
developed enterprise applications and databases;

 
 
·
and the ability to tailor the appearance, policy settings, workflow and other
characteristics of the service to meet the needs of a diverse customer base.

 
According to a March 2007 announcement by Gartner, the SaaS market is growing at
48% per year as compared to the traditional enterprise software market which is
only growing at 6% per year. Gartner predicts that the SaaS market will grow to
$19.3 billion in worldwide revenues in 2011, generating 25% of the revenues
within the overall software market, an increase of 20% - up from 5% in 2006
which produced worldwide market revenues of $6.3 billion.  

Application Exchanges
To take advantage of the predicted growth in the software-as-a-service market,
SaaS application exchanges (marketplaces) have entered as new market players
seeking to capture market share by lowering traditional and SaaS barriers to
market entry and growth for exchange partners. While traditional barriers have
been associated with market presence and intellectual property, new SaaS
barriers also include other limiting factors associated with successfully
transitioning or supporting a services-based business model that requires a
multi-tenant delivery infrastructure as well as re-tooled sales, marketing and
distribution strategies, and effective alliance strategies.  Application
exchanges provide software companies with a new channel to build, sell, deploy
and manage their SaaS applications and in return generate revenue from a variety
of sources, including: advertising fees; partner participation fees; partner
enablement fees; partner application hosting and management fees; and shared
revenue percentages for new SaaS subscriptions sold through the exchange.

Our Strategy

Our mission is to leverage our strength as a leader in enterprise portal
strategies and best practices to deliver proprietary, ‘business-ready’ employee,
customer and partner portal solutions that are economical, easy-to-use,
easy-to-deploy and easy-to-manage. We deploy our products and software services
through our propriety application exchange, SOAAPPS.com, which SaaS enables
other Independent Software Vendors (ISVs) and their applications - making it as
easy as possible for global mid-market companies to find, try and buy software
or services that meet their needs and budget.

Key elements of our strategy include:
 
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·
Strengthening and extending our product offerings.  We designed our
standards-based products to easily accommodate new features, functions and
business-use-case scenarios as well as the release of entirely new applications.
For example, the first release of the EnterConnect® AppSuite was for generic
intranet and extranet environments, however, the latest release includes four
applications, EmployeeConnect, TeamConnect, CustomerConnect and
PartnerConnect.  The EnterConnect® Portal Application Platform was also extended
to include new functionality such as campaign and survey execution and
management, which is now utilized in each of the new applications.

 
·
Deepening relationships with strategic partners and better leveraging their
indirect channels.  Our strategic partner strategy focuses on developing
partnerships with software leaders that have large indirect channels consisting
of Independent Software Vendors (ISVs), Systems Integrators (SIs) and Value
Added Resellers (VARs).  We currently have established partnerships with two of
the leading middleware software providers, BEA Systems and Oracle. There are two
key goals with our strategic partner strategy: to embed, integrate, bundle or
co-sell our EnterConnect® products with our partner’s products to launch new
business-ready portal applications and then distribute them through the
application exchange, SOAAPPS.com, leveraging the indirect sales channels of
strategic partners; to SaaS enable strategic partner ISVs in order to make their
SaaS solutions available on the SOAAPPS.com application exchange.  The objective
of our strategic partner strategy is to help our partners drive new revenue
through indirect channels utilizing EnterConnect® products.

 
·
Establishing the Internet channel as our primary channel for global software
deployment.  We believe the Internet channel provides the lowest cost - of
sales, of customer and partner service delivery, and of deploying, managing and
maintaining products - and provides the greatest access to customers
worldwide.  The key to our Internet channel strategy is leveraging the
EnterConnect® application exchange, SOAAPPS.com in conjunction with our
strategic partner, BEA Systems, and their extensive network of indirect channel
partners. SOAAPPS.com is the first application exchange to launch with our
strategic partners.

 
·
Extending our tiered distribution channels.  Our tiered distribution channels
consist of direct and indirect sales channels. The direct sales channel is
comprised of our direct sales force and telesales.  The indirect sales channel
is comprised of our strategic partners and their indirect partner network of
ISVs, SIs and VARs. The objective of this strategy is to help partners maximize
the use of our Internet channel, SOAAPPS.com, to: generate demand for solutions;
enable easy demonstration of solutions; provide easy access to solution
collateral; facilitate online transactions; and enable easy management and
maintenance of purchased solutions.

 
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Our Solution

We are a provider of standards-based, business-ready enterprise and exchange
portal applications for mid-market companies.  We provide an Internet channel
that enables customers to more easily access, demonstrate, acquire, deploy and
manage either on-premise products or software-as-a-service offerings.  Our key
EnterConnect® SaaS offerings enable us to provide our service to businesses
worldwide through our proprietary, scalable and secure SaaS application
architecture, which also allows us to serve large numbers of customers
cost-effectively. By subscribing to our service, our customers do not have to
make large and risky upfront investments in software, additional hardware,
extensive implementation services, and additional IT staff. As a result, our
service enables businesses to achieve higher productivity from, and a lower
total cost of ownership for, their business-ready portal applications.

The key advantages of our solution include:
Comprehensive Product Suite.  We offer products that are designed to deliver
high levels of accountability, productivity, and ease of use.  Our solutions
allow businesses to enhance individual and workgroup productivity, improve
customer service, strengthen marketing capabilities, increase revenue
opportunities and reduce business operating costs.  We have identified the
target markets that are in the greatest need of our applications and our portal
platform can be expanded to build additional application opportunities
identified within those industries.

Ease of Use.  We have designed our products and SaaS offerings to be easy-to-use
and intuitive.  Since our solutions contain many tools and features recognizable
to users of popular websites such as Amazon.com, eBay and Yahoo!, they have a
more familiar, user-friendly interface than typical enterprise applications.  As
a result, our end users do not require substantial user training and therefore
rapidly enjoy the benefits.  We also conduct extensive end user surveys to gauge
their experiences with our solutions so that we may determine potential areas of
improvement.  Additionally, because of the nature of our offerings, we receive
automatic feedback as to which features customers use, enabling us to further
improve our offerings.

Rapid Deployment.   Since our business-ready portal applications are
pre-configured for key business-use-cases they can be deployed rapidly to
achieve business results quickly.  Customers utilizing our SaaS offerings have
the added advantage of not having to spend time installing or maintaining the
servers, networking equipment, security products or other infrastructure
hardware and software necessary to ensure a scalable and reliable service
required with on-premise solutions.  We believe the average time that a customer
requires to deploy our offerings is significantly shorter than typical,
traditional portal deployments.  We also offer complementary consulting and
training services to assist customers in rapidly deploying and optimizing their
use of our offerings.

Lower Total Cost of Ownership.  We enable customers to achieve significant
savings relative to the traditional enterprise portal models that require
expensive information technology (IT) resources for upfront development,
deployment, systems integration and ongoing customizations, support,
administration and upgrades.  Our pricing strategies and choice of on-premise or
SaaS delivery options enable customers to easily acquire a solution that fits
their unique needs.  Customers utilizing our SaaS offerings also benefit from
the predictability of their future costs since they pay for the software as a
service, which already includes upgrades for the term of the subscription
contract.
 
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Our Products & Offerings

We have developed a proprietary Business-Ready Portal Application Platform,
EnterConnect®, which contains all of the core functionality required to rapidly
build and deploy new end-user applications quickly.  The core functionality
includes web content management, digital asset management, search, security,
personalization and end-user customization.  Utilizing the platform, we have
developed two primary business-ready product lines:  EnterConnect® AppSuite and
the application exchange, SOAAPPS.com, which provide online collaboration
environments for employees, customers and partners.  The table below shows our
key applications and feature categories.

EnterConnect® Business-Ready Portal Application Platform
Key Feature Categories
EmployeeConnect
TeamConnect
CustomerConnect
PartnerConnect
Web Content Management
ü
ü
ü
ü
Digital Asset Management
ü
ü
ü
ü
Collaboration
ü
ü
ü
ü
Personalization
ü
ü
ü
ü
Survey Management
ü
ü
ü
ü
Campaign Management
ü
ü
ü
ü
Portal Administration
ü
ü
ü
ü
Microsoft Outlook Integration
ü
ü
ü
ü
Federated Secure Search
ü
ü
ü
ü
Multi-Language Support
ü
ü
ü
ü
Federated Authentication & Security
ü
ü
ü
ü

 
EnterConnect® AppSuite is a business-ready portal application suite used for
intranet and extranet environments.  The portal suite currently consists of
EmployeeConnect, TeamConnect, CustomerConnect and PartnerConnect.  The suite
targets mid-market companies seeking to improve communications and collaboration
and those seeking to leverage employee, partner and customer self-service to
lower operational costs and increase revenue.  The application suite is
available in both on-premise and software-as-a-service offerings. The
application suite is available in a variety of editions, all of which use the
Portal Platform and core functionality, but provide flexible pricing options for
customers to match their needs and the size of their user-base with the editions
that will deliver the highest return on investment.

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EnterConnect® AppSuite On-Premise Version
Applications in Suite
Standard Edition
(1 - 1,500 Users)
Corporate Edition
(1,501 - 2,500 Users)
Enterprise Edition
(2,501+ Users)
EmployeeConnect
ü
ü
ü
TeamConnect
ü
ü
ü
CustomerConnect
ü
ü
ü
PartnerConnect
ü
ü
ü
Development APIs
   
ü
Licensing Options
As a Suite
As a Suite
As a Suite

EnterConnect® AppSuite Software-as-a-Service (SaaS) Version
Applications in Suite
Trial Edition
SaaS Edition
 
EmployeeConnect
ü
ü
 
TeamConnect
ü
ü
 
CustomerConnect
ü
ü
 
PartnerConnect
ü
ü
 
Subscription Options
30 Days Free
Per-User Per-Suite
 

The EnterConnect® application exchange, SOAAPPS.com, consists of a marketplace
that promotes partner products and services, a storefront for partners to demo
and sell offerings, a customer portal for partners to service and manage
customers, and an administration portal to manage portal business services and
partners on the exchange.   SOAAPPS.com launched September 10, 2007 in strategic
partnership with BEA Systems and targets global mid-market companies seeking a
variety of solutions from partner companies.

EnterConnect® Application Exchange Portal, SOAAPPS.com - Software-as-a-Service
(SaaS) Version
Key Applications
BEA Edition
Marketplace
ü
Customer Portal
ü
Storefront
ü
Administration
ü
Analytics
ü
Hosting & Management of Partner Solutions
ü
Subscription Options
Custom

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Professional Services

We intend to offer consulting and implementation services and training that
complement our offerings.

Consulting and Implementation Services.  We offer consulting and implementation
services to our customers to facilitate the adoption of our business-ready
portal offerings.  Consulting services consist of services such as information
architecture, business process mapping, project management services, solution
development and guidance on portal best practices in using our
offerings.  Implementation services include systems integration, configuration
and data conversion.  The majority of our consulting and implementation
engagements will be billed on a time-and-materials basis.  For the majority of
the mid-market customers, we offer certain implementation services on a fixed
price basis.

Training.  We offer a number of traditional classroom and online educational
classes that address topics such as implementing and using and administering our
offerings.  We also offer classes for our partners who implement our service on
behalf of our customers. The traditional classroom and some of the on-line
educational classes are billed on a per-person, per-class basis.  We intend to
offer the majority of our on-line educational classes are available at no charge
to customers who subscribe.  We also assist customers in developing and
delivering a customized education program for their employees.  The majority of
these custom training engagements are billed on a time-and-material basis.

Technology, Development and Operations

Technology

Core Technology
We believe that our proprietary, enterprise-class Portal Application Platform,
EnterConnect®, contains all of the core functionality required to rapidly build
and deploy new end-user applications that are economical, easy-to-use,
easy-to-deploy and easy-to-manage.  The core functionality includes content
management, digital asset management, search, security, personalization and
end-user customization.  We believe that our enterprise portal product strategy
combined with our SaaS application service model enables us to develop
functionality and deliver it to customers more efficiently than traditional
enterprise software vendors.  

We believe the value of EnterConnect® not only lies in its performance as a
product, but in its ability to leverage the software platforms that the product
runs on. The value of EnterConnect® as a robust business-ready portal solution
can be extended and enhanced by our leading world-class partner platforms:  BEA
Systems’ WebLogic Portal® (“WLP”) and Oracle’s 10g Platform. These platforms
provide robust standards-based design and run-time environments – empowering
scalability and flexibility.

BEA WebLogic Portal and Oracle 10g are the leading portal platforms for
developers service-enabling their applications. The EnterConnect® Portal
Platform leverages these partner platforms to achieve faster time-to-value when
developing new business applications using open standards, web services and a
Service-Oriented Architecture (“SOA”).  These platforms help empower
EnterConnect® to connect people to business services, while simplifying the
production and management of any custom service-oriented portals in order to
deliver business value rapidly and cost effectively. The EnterConnect® products
are available as a service or with the portal platforms embedded or bundled
within the solutions or customers already owning BEA WebLogic Portal or Oracle
10g can purchase EnterConnect® AppSuite separately to run in their existing
on-premise environment.
 
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SaaS Offering

We believe that our SaaS offering enables us to develop functionality and
deliver it to customers more efficiently than traditional enterprise software
vendors. With the SaaS offering we do not provide software that must be written
to different hardware, operating system and database platforms, or that depend
upon a customer’s unique systems environment. Rather, we have optimized our
service to run on a specific database and operating system using the tools and
platforms best suited to serve our customers. Performance, functional depth and
usability of our service drive our technology decisions and product
direction.  To optimize our software-as-a-service offering for customers, we
have added two new SaaS features: Federated Identity Management and Integrated
Enterprise Search. Federated identity management enables us to authenticate
users without exposing ‘identity credentials’ within the portal administration
sub-systems, further improving the security EnterConnect® delivers. Integrated
enterprise search enables us to expose our portal search services to other
‘search engine queries’, further improving search abilities.

On-Premise Offering

Customers purchasing the Standard or Corporate Editions of the EnterConnect®
AppSuite will leverage the proprietary functionality of EnterConnect as well as
the embedded functionality of either BEA Systems’ WebLogic Portal® (“WLP”)
Platform or Oracle’s 10g Platform, depending on their platform preference.

Customers purchasing the Enterprise Edition of the EnterConnect® AppSuite will
leverage the proprietary functionality of EnterConnect as well as the bundled
functionality of either BEA Systems’ WebLogic Portal® (“WLP”) Platform or
Oracle’s 10g Platform, depending on their platform preference.  With the
Enterprise Edition, customers have full access to the EnterConnect® AppSuite
APIs as well as the full functionality of any bundled BEA or Oracle
platforms.  The Enterprise Edition provides customers with access to the APIs
for future customizations and proprietary integrations.  With the Enterprise
Edition, customers gain a rich graphical interface for developing portals and
business applications that can be easily adapted to business changes. This
edition can enable rapid portal development while advanced administration
simplifies portal assembly and management.

Development

The EnterConnect® Portal Application Platform contains all of the core
functionality required to rapidly build and deploy new end-user applications.
Utilizing our standards-based platform, we not only deliver intuitive portal
applications and designs that are easy to use within a scalable and robust
enterprise-class architecture, but we also have the flexibility to continue
developing new vertical, horizontal or niche applications as market
opportunities are identified.  
 
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We anticipate that a significant portion of our research and development
resources will be devoted to enhancing existing products as well as
re-architecting our portal platform and products to optimally support a
software-as-a-service architecture and business model.  The Company is
re-architecting EnterConnect® to deliver our SaaS offering as a full
multi-tenant application.  The re-architected SaaS offering will treat all
customers as logically separate tenants in central applications and databases.
As a result, we will be able to spread the cost of delivering our service across
our user base. In addition, because we will not have to manage thousands of
distinct applications with their own business logic and database schemas, we
believe that we can scale our business faster than traditional software
vendors.  The new multi-tenant architecture will enable us to then focus our
resources on building new functionality for our customer base as a whole rather
than on maintaining an infrastructure to support each of their distinct
applications.  Our re-architected SaaS offering will be addressable by other
applications on the Internet and applications behind our own firewall.

While we expect such investments in research and development will generate
revenue in the next several years, technological development is always subject
to potential delays and there can be no assurance that any new product
enhancements developed will achieve market acceptance.

Operations

The Company leases its principal facility in San Jose, California. EnterConnect
serves all SaaS customers and users from a Tier 1 facility located in the
Washington, D.C. metro area that is operated by OpSource, Inc., which is
headquartered in Santa Clara, CA.  OpSource is a SAS 70 Type II audited provider
of a complete SaaS delivery solution that includes carrier class network and
security, 24x7x365 systems management and call center operations.

Customers

Contracts in the computer software business are generally cancelable with 30
days notice. While the Company has only made limited sales thus far, we intend
to routinely sign one year contracts with customers and protect against
cancellation of the contracts by meeting customer needs, providing excellent
services, and by delivering unique proprietary software combined with all the
added additional cost saving benefits.

On-Premise Customers
Each on-premise customer (Licensee) receives all subsequent updates and
modifications to the purchased software which is furnished to the Licensee under
a non-transferable, non-exclusive License for use by the Licensee and no title
or ownership is vested to the Licensee.  Our contracts generally provide that
the computer hardware furnished is warranted as specified under the
manufacturer’s warranty, and if any defects, replacements, repairs or any other
problem occurs the Licensee agrees to look solely to the manufacturer.
 
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SaaS Customers
Each SaaS customer subscribes to utilize the EnterConnect® products as a
software service, accessing it through any standard Web browser.  By subscribing
to our software services offering, our customers gain several advantages over
the on-premise solution, including: no requirement for risky upfront investments
in software, additional hardware, extensive implementation services, or for
additional IT staff. As a result, our service enables businesses to achieve
higher productivity from, and a lower total cost of ownership for, their portal
solutions.  Unlike on-premise customers, SaaS customers have the option of
subscribing to individual applications or to the entire EnterConnect® AppSuite
including EmployeeConnect, TeamConnect, CustomerConnect and PartnerConnect – all
on a per-user, per-application basis.  

Marketing and Distribution

Target Markets

Our target markets are primarily mid-market companies with (1,000 – 4,000)
employee-users and secondarily, divisions of Fortune 1000 enterprise
companies.  The vertical market focus is on Manufacturing, Healthcare, Business
Services, Publishing and Media, Consumer Packaged Goods, Federal Contractors,
Financial Services, Energy, Utilities, Telecommunications, Transportation and
State & Local Government industries.

Marketing

We use a variety of marketing programs to stimulate demand for products and
services.  These programs are focused within the target markets. In addition, we
have developed co-marketing programs operated in conjunction with our strategic
and channel partners in order to take advantage of their complementary marketing
capabilities.  The key elements of our marketing strategy include:

Marketing on the Internet.  The Internet is our primary channel for marketing,
sales, deployment and service of products.  We intend to utilize the Internet to
drive awareness of products and then to make the products available for
demonstration, evaluation, subscription and purchase.  Within our online
environment, customer information is collected electronically through an
automated registration process, creating the basis for ongoing marketing of
upgrades, new products and recruiting potential partners. We also generate
web-based campaigns targeted at key executives and provide free product
demonstrations via webinars.

Target Marketing.  We focus direct marketing efforts on mid-market companies in
vertical or geographic markets.  We leverage a variety of marketing mechanisms
to generate demand for products and services, including:  a referral program for
existing customers; outbound telemarketing; direct response advertising; direct
marketing campaigns; vertical market specific trade shows and seminar
events.  The goal of our target marketing efforts is to create product and
service awareness, to identify potential buyers of products and services, and to
generate leads for follow-on sales.
 
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Distribution

We have designed our Internet and traditional distribution strategy to address
the particular requirements of diverse mid-market target customers.  Through our
distribution strategy, we seek to make our EnterConnect® portal software the
industry standard for mid-market companies.

The Internet is our primary distribution channel but the strategy includes
traditional distribution, including Direct Sales as well as Indirect Sales.  Our
distribution efforts will consist of our Internet Channel, Indirect Sales
Channel and Direct Sales Channel, with the primary focus being first on the
Internet and then the indirect channel, followed by direct sales.

Internet Channel

We are establishing the Internet channel as our primary channel.  We believe
that the Internet channel provides the lowest cost - of sales, of customer and
partner service delivery, and of deploying, managing and maintaining our
products - and provide the greatest access to customers worldwide.  The key to
our Internet channel strategy is leveraging the EnterConnect® application
exchange, SOAAPPS.com, in conjunction with our strategic partners and their
extensive network of indirect channel partners.

Indirect Channel

Our indirect channel strategy focuses first on leveraging our strategic partners
and their established channel partner networks consisting of Independent
Software Vendors (ISVs), Systems Integrators (SIs) and Value Added Resellers
(VARs) in order to drive new revenue with the sell of our products.   The
objective of this strategy is to help partners maximize the use of our Internet
channel to: generate demand for solutions; enable easy demonstration of
solutions; provide easy access to solution collateral; facilitate online
transactions; and enable easy management and maintenance of purchased solutions.

Direct Channel

Our direct channel strategy focuses first on leveraging the Internet as our
primary channel and then on direct sales, which includes direct field sales and
telesales.

Internet Sales.  We are establishing the Internet channel as our primary
channel.  We believe the Internet channel provides the lowest cost - of sales,
of customer and partner service delivery, and of deploying, managing and
maintaining our products - and provide the greatest access to customers
worldwide.  The key to our Internet sales strategy is leveraging our strategic
partners to drive awareness of the online channel. We will empower customers to
purchase both our on-premise and SaaS offerings from our Internet channel. This
will not only reduce our cost of sales, but also our cost of distributing and
maintaining our products and services.

Direct Field Sales.  Our direct sales force targets primarily mid-market
companies in our target markets in alignment with their assigned geographic
territories.  Our direct sales force prospects directly to target companies to
close business and works with complementary ISVs, VARs and systems integrators
when necessary to deliver complete solutions for customers. Our direct sales
force is responsible for selling both on-premise and SaaS offerings.
 
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Telesales.  Our telesales organization proactively prospects for new business by
calling on contacts within our targeted mid-market companies.  Our telesales
efforts are coordinated with other integrated demand development campaigns to
achieve the highest return on results.

Customer Service and Support

We are adopting a comprehensive technical support program to assist our
customers in the use of products and services and to identify, analyze and solve
any problems or issues with associated with them.  The support program will
include email support, an online repository of helpful support information,
shared best practices for implementation and use, and telephone
support.  Telephone support is provided by technical specialists who work for us
on a full-time basis. Basic customer support during business hours is available
at no charge to customers that purchase support and maintenance with on-premise
products or SaaS offering.  SaaS customers access basic customer support at no
charge on a 24x7x365 basis.  Premium customer support will be available for an
additional charge.

Competition

The market for enterprise portals and enterprise business applications is
generally highly competitive, rapidly evolving, and subject to changing
technology, shifting customer needs and frequent introductions of new products
and services.  We compete with vendors providing enterprise portal platforms for
developing custom portals, enterprise business-ready portal software
applications and packaged portal software.  Additionally, we also compete with a
limited number of vendors providing portal solutions through Internet-based
software-as-a-service offerings.

The Company believes that increased competitive pressures will occur over the
next 12 months due to the mid-market’s preference for and shift to the SaaS
subscription model and due to the success of SaaS leaders such as Salesforce.com
and WebEx. Typically, system features, product pricing, ease of use and
installation, sales engineering and marketing support, and product reliability
are the primary basis of competition.  We believe that the Company competes
favorably with respect to these factors.

EnterConnect® AppSuite Competitors

Principle AppSuite competitors in the collaboration category include: ColSpace,
Sodesqa and Webex.  Principle AppSuite competitors in the SaaS category include:
Adenin-Dynamic Intranet, HyperOffice, Adweb-Intranet Dashboard,
TeamPortals-IceBox, Ice Web- IcePortal, Trichy-WorkZone and iCentera.

EnterConnect® Application Exchange – SOAAPPS.com Competitors
 
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Principle SOAAPPS.com competitors include:   SalesForce.com’s AppExchange,
NetSuite’s SuiteFlex, and WebEx Communications’ WebEx Connect, which is being
acquired by Cisco Systems.  Increased competition is also anticipated from the
Microsoft LIVE Exchange to launch later this year, as well as marketplaces by
IBM, SAP and others.

Intellectual Property

The Company owns the proprietary, standards-based EnterConnect® Portal
Application Platform and product lines, EnterConnect® AppSuite and the
application exchange, SOAAPPS.com. We rely on a combination of trademark,
copyright, trade secret and patent laws in the United States and other
jurisdictions as well as confidentiality procedures and contractual provisions
to protect our proprietary technology and our brand.   We currently have no U.S.
or international patent applications pending.  We do enter into confidentiality
and proprietary rights agreements with our employees, consultants and other
third parties and control access to software, documentation and other
proprietary information.

EnterConnect® is a trademark of the Company.  All other trademarks referenced in
this document are the property of their respective owners.

Employees

We believe that one of our key competitive advantages is our diverse and
experienced development, sales and management teams.  Our development group
includes key members of engineering and project management teams that have
developed several enterprise portal systems for Fortune 500 companies for which
they have obtained several industry awards and certifications. Our sales team
includes key members of direct and channel sales, experienced at successfully
accelerating sales within both the mid-market and enterprise-market.  Our team
consists of 6 full time employees and 12 outside contractors.
 

Description of Property

EnterConnect leases a 3,143 square foot office in San Jose, California.  The
lease is for a term of 3 years at the monthly rate of $6,915 per month.
 
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RECENT EVENTS

Working Capital

The Company is in the process of a negotiating an unsecured line of credit for
about $5 million for its working capital needs.  There can be no assurance, and
none is hereby given, that the Company will be able to negotiate the line of
credit or negotiate it upon terms favorable to the Company.

Convertible Debentures

From December 20, 2006, through February 28, 2007 the Company executed 10%
convertible debentures aggregating approximately $2,113,000 with forty-four (44)
individuals.  The holders are entitled, at their option, to convert the
debentures, plus accrued interest, into shares of the Company’s common stock at
$1.00 per share.  If not converted, the entire principal amount shall be due to
the holder on the five year anniversary of the debenture with interest to be
paid quarterly in cash or shares. In connection with the convertible debentures,
the Company issued to these individuals an aggregate of 1,267,641 warrants with
exercise prices of $2.00 per share on the first 422,547 warrants, $3.00 per
share on the second 422,547 warrants, and $4.00 per share on the final 422,546
warrants.  These warrants are exercisable for a period of three years from the
date of issuance. The fair value of the warrants issued using the Black-Scholes
Option Pricing Model was $36,960.  The Black-Scholes Option Pricing Model had
the following assumptions: Risk-free interest of 5.00%; Dividend yield 0.00%;
Volatility of 265.73% and a warrant life of five (5) years. At March 31, 2007
all convertible note holders converted their debentures plus accrued and bonus
interest into 2,266,112 shares of the Company’s common stock.

Financial Advisory Agreement

On June 11, 2007 EnterConnect entered into a Financial Advisory Agreement for
Investment Banking Services with Bridgestream Partners, LLC
(“Bridgestream”).  Pursuant to the terms of the Agreement, Bridgestream shall
assist EnterConnect in identifying targets for strategic partnerships and
procuring financing.  The term of the Agreement is for eighteen (18) months,
unless EnterConnect has raised sufficient capital not to require additional
financing or upon ninety (90) days’ written notice.  The initial retainer for
Bridgestream’s services was $9,000.  EnterConnect also agreed to issue to
Bridgestream a portion of any equity raised in a financing, depending on the
type and amount raised in the financing, plus equity participation equal to
twelve percent (12%).  Bridgestream will also be entitled to receive a fee based
upon any merger consummated with an entity introduced by Bridgestream.  

Media Services Contract

On June 19, 2007 EnterConnect entered into a Memorandum of Understanding with
Global Media Fund, Inc. (“Global”) to provide marketing and advertising services
for a term of twelve (12) months.  In consideration for the services,
EnterConnect issued 1,000,000 shares of its common stock to Global at an agreed
valuation of $2,000,000.  
 
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Bridge Financing

On July 31, 2007, EnterConnect conducted a private placement of its securities
solely to accredited investors.  Subscriptions were for units at a purchase
price of $25,000, comprised of a 14% Debenture and 50,000 shares of the
Company's Common Stock.  The Company executed subscriptions for investments of
$585,000 for a total of 1,171,000 shares of Common Stocks.

Appointment of Placement Agent

On September 12, 2007, EnterConnect entered into a non-exclusive Placement Agent
Agreement with Sandgrain Securities, Inc. (“Sandgrain”).  Pursuant to the terms
of the Agreement, Sandgrain will act as private placement agent for the Company
in connection with the Placement of Securities (the “Services”) for a period of
Twelve (12) months. Sandgrain will seek to complete the Placement on a
reasonable best efforts basis, acting as the Company’s agent and not as a
principal or underwriter.  Sandgrain is free to engage, at its own expense,
sub-agents as it may deem necessary or appropriate. Sandgrain shall not act as a
financial advisor for the company.  The initial retainer for Sandgrain’s
services was $12,000.  EnterConnect also agreed to pay Sandgrain cash selling
commissions of ten (10%) percent of the proceeds of the Units sold, certain
Warrants, in addition to reimbursement of certain expenses.

LEGAL PROCEEDINGS

We are not a party to any material legal proceedings nor are we aware of any
circumstance that may reasonably lead any third party to initiate legal
proceedings against us.

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DIRECTORS AND OFFICERS OF THE COMPANY

Name
Age
Position
 
 
 
Sam Jankovich
46
Chairman and Chief Executive Officer
Michael Wainstein
35
Director and Treasurer
Dean Galland
46
Chief Operating Officer

Sam Jankovich, Chairman and Chief Executive Officer

As Chairman and Chief Executive Officer of EnterConnect Inc., Mr. Jankovich, 46
is taking his vision of enterprise portals delivered in a software as a service
(SAAS) model to the market. In this role, Mr. Jankovich will define the overall
company strategy and set standards in the on-demand portal space. Prior to
founding EnterConnect Inc., and from November 2000 to December 2006, Mr.
Jankovich was instrumental in driving the direction and revenue growth of
Enterpulse, the company that originally incepted the EnterConnect product and
spun off EnterConnect, Inc. Mr. Jankovich launched Enterpulse's portal strategy,
which serves as the foundation of many of its offerings, and led to the creation
of the premier intranet/extranet portal product, EnterConnect.  Mr. Jankovich
has held key executive roles for former companies in the computer telephony and
CRM industries, including PwC, marchFirst, Groundswell, and CTI Interactive,
which he founded.  He holds a Bachelor of Arts degree in Business Administration
from Washington State University.

Michael Wainstein, Director, Treasurer

Michael Wainstein, 35 is a co-founder of EnterConnect Inc. and serves as its
Treasurer. He has also served as a founder of Private Capital Group, LLC. since
its formation in 2001. Mr. Wainstein has invested for PCG in a variety of
industries ranging from new media to energy. Mr. Wainstein is a graduate of New
York University with a Bachelor of Arts degree in Economics and a graduate of
New York Law School. He is a member of the New York Bar.

Dean Galland, Executive Vice President and Chief Operating Officer

As Chief Operating Officer of EnterConnect Inc., Mr. Galland oversees daily
operations, supports the strategies set forth by the CEO, and is responsible for
overall business results.  Prior to EnterConnect Inc. and from November 2000 to
December 2006, Mr. Galland served as regional vice president for Enterpulse,
where he managed the company's West Coast presence, growing its business and
mentoring its staff.  Deeply involved from an executive account leadership
perspective for premier clients in the West, Mr. Galland was responsible for
ensuring that the emerging needs of complex systems were met through program
management, systems integration, and Q&A support.  Mr. Galland also provided
client executives with strategy and design recommendations, including how to
connect business objectives to portal initiatives that serve the needs of
customers, suppliers and employees.  He facilitated numerous organizational,
creative, and developmental programs and played an essential role in managing
client teams.  Mr. Galland graduated with a Bachelor of Science in Computer
Science from Colorado State University.
 
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EXECUTIVE COMPENSATION

It is anticipated that Mr. Jankovich will receive $250,000, Mr. Wainstein will
receive $83,333 and Mr. Galland will receive $250,000 as compensation from the
Company in 2007.

Compensation of Directors
 
All directors are reimbursed for out-of-pocket expenses in connection with
attendance at Board of Director's and/or committee meetings.

 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
The following table sets forth information regarding beneficial ownership of our
common stock as of the date hereof (i) by each person who is known by us to
beneficially own more than 5% of our common stock (ii) by each of our officers
and directors; and (iii) by all of our officers and directors as a group:
 
Name of Beneficial Owners
Shares Beneficially Owned
Percentage of Outstanding Shares Owned (3)
 
 
 
Sam Jankovich (1)
9,000,000
34.4%
Michael Wainstein (2)
7,800,000
29.8%
Dean Galland
2,109,400
8.1%
Officers and directors as a group (3 persons)
18,909,400
72.2%

 
(1)  Mr. Jankovich may be considered a promoter of the Company.  He is located
at 100 Century Center Court, Suite 650, San Jose, California 95112.
(2)  Beneficially owned by Private Capital Group, LLC.  Mr. Wainstein may be
considered a promoter of the Company.  He is located at 1500 Broadway, Suite
2003, New York, New York, 10036.
(3)  Based upon 26,191,928 shares outstanding.

The Company has authorized 100,000,000 shares of Common Stock of which
26,191,928 shares are issued and outstanding and 10,000,000 shares of Preferred
Stock of which no shares were issued and outstanding.

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DESCRIPTION OF CAPITAL STOCK
 
Our authorized capital stock consists of 100,000,000 shares of Common Stock, par
value $0.001 per share, and 10,000,000 shares of preferred stock, par value
$0.001 per share, with such rights and preferences as the Board of Directors
determines from time to time.
 
The Company has 26,191,928 shares of common stock issued and outstanding before
the date of this Offering.  No preferred stock is issued or outstanding.  No
other securities of the Company are issued or outstanding.
 
Common Stock

Holders of Common Stock are entitled to one vote per share, either in person or
by proxy, on all matters that may be voted upon by the holders thereof at
meetings of the shareholders.  There is no provision for cumulative voting with
respect to the election of directors by shareholders.  Therefore, the holders of
more than 50% of the shares can, if they chose to do so and act together, elect
all of our directors.  In such event, the holders of the remaining Common Stock
will not be able to elect any directors.  Our shareholders do not have any
preemptive rights to subscribe for additional shares of Common Stock.
 
The holders of Common Stock have equal rights to dividends and other
distributions from funds legally available therefore when and if declared by our
Board of Directors and subject to the preferences of any preferred stock then
outstanding, are entitled to share ratably in all of our assets available for
distribution to shareholders upon liquidation, dissolution, or winding up of our
affairs.
 
Preferred Stock

Our articles of incorporation allow the Board of Directors, without further
action or vote by the holders of Common Stock, to issue shares of preferred
stock in one or more series and to fix any preferences, conversion and other
rights, voting powers, restrictions, limitations, qualifications and terms and
conditions of redemption as adopted by the Board of Directors.  Shares of
preferred stock may be issued for any general corporate purpose.  Our Board of
Directors may issue one or more series of preferred stock with rights more
favorable with regard to dividends and liquidation than the rights of holders of
Common Stock.  Any such series of preferred stock also could otherwise adversely
affect the voting power of the holders of Common Stock and could serve to
perpetuate the directors’ control of the Company under certain circumstances.
 

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TERMS OF THE UNITS AND THE OFFERING
 
General
 
A minimum of 5 Units are being offered on a “best efforts – all or none basis.”
Fifteen (15) additional Units are offered on a “best efforts” basis. Each Unit
shall consist of 133,333 shares of the Company’s common stock, par value $.001
per share (“Common Stock”) and warrants (the “Warrants”) to purchase 66,666
shares of the Common Stock at $1.50 per share.
 
Minimum investment per subscriber is for one Unit at the offering price of
$100,000 per Unit.  The subscriber will be required to enter into a Subscription
Agreement (the “Subscription Agreement”) in the form attached hereto as Exhibit
A. The Company may waive the minimum subscription amount in its sole discretion.
 
The Offering will terminate on November 30, 2007 (the “Offering Termination
Date”) or such earlier date by which all the Units are sold.  The Offering
Termination Date may be extended for up to 30 days, at our discretion, through
December 30, 2007 but no later than that.
 
THERE ARE TRANSFER RESTRICTIONS IN THE SUBSCRIPTION AGREEMENT.  AS A RESULT, AN
INVESTOR IN THIS OFFERING MIGHT NOT BE ABLE TO SELL SUCH INVESTOR’S COMMON UNITS
STOCK AND MAY HAVE TO HOLD THE COMMON STOCK INDEFINITELY. THE COMPANY WILL ALLOW
THE PURCHASERS TO PARTICIPATE IN REGISTRATION OF SECURITIES WITHIN THIRTY (30)
DAYS FROM THE CLOSING OF THE OFFERING.
 
The statements in this Confidential Offering Memorandum relating to the
Subscription Agreement and Form of Warrant are summaries, do not purport to be
complete and are qualified in their entirety by reference to the actual
agreements, which are attached as Appendices to this Memorandum and must be read
prior to making an investment herein.

Description of the Warrants
 
Each Purchaser will be issued Warrants to purchase 66,666 shares of Common Stock
of the Company at a price per share of $1.50. The Warrants will be exercisable
until the seventh anniversary of their date of issuance. The Warrants will be
separately certificated, and redemption or sale of the Common Stock will not
affect the rights of Purchasers under the Warrants.
 
The Warrants may be exercised in whole or in part at the option of the warrant
holder.  For so long as the Warrants are issued and outstanding, we will reserve
a sufficient number of authorized shares of Common Stock to permit the exercise
of the Warrants.
 
The Warrants may be callable in whole or in part by the Company in the event the
stock trades at an average weighted price of $2.25 for thirty (30) consecutive
days.
 
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Neither the Warrants nor shares of Common Stock issuable upon exercise of the
Warrants will be registered under the Securities Act of 1933, as amended.  As a
result, there may not be a market for such Warrants or shares for the
foreseeable future.
 
The form of warrant is attached hereto as Exhibit C.
 
Plan of Distribution
 
The Units are being privately placed with assistance from members of the
Financial Industry Regulatory Authority. The Units are also being offered
through its Officers and Directors (no selling commissions will be paid to these
individuals).

Offering proceeds will be deposited in a non-interest bearing escrow account for
the benefit of subscribers with the Company at a bank account with the Law Firm
of Levy & Boonshoft, P.C. located at 477 Madison Avenue, New York, New York
10022 pursuant to an Escrow Agreement, a true, correct and complete copy of
which is attached hereto as Exhibit D.  Unless a minimum of five (5) Units are
duly subscribed and paid for before November 30, 2007, the Offering will
terminate and all funds will be promptly refunded to the subscribers in full
without interest or deduction; provided, however, that the Company reserves the
right to extent the Offering through December 30, 2007.

The minimum subscription is for $100,000 for one (1) Unit, although the Company
reserves the right to accept partial subscriptions.  The subscription price is
payable upon submission to the Company of a fully completed and executed
Subscription Agreement and Subscriber Questionnaire.  The form of Subscriber
Questionnaire is attached hereto as Exhibit B.

The certificates evidencing the Common Stock and Warrants to be issued hereunder
will be delivered to investors promptly after funds representing the sale of the
Units offered hereby have cleared the banking system and the Company has
received and accepted properly completed and executed subscription documents for
the Units (the “Closing”).

 
Subscription Procedures
 
A copy of the Subscription Agreement is included in this Confidential Offering
Memorandum in the Appendices.  In order to purchase a Unit, a prospective
investor must submit an executed copy of the Subscription Agreement, completed
to reflect the principal amount of the Units for which such investor is
subscribing, along with a check payable for such amount to EnterConnect,
Inc.  It is important that the Subscription Agreement be completely filled out
and executed by the investor.  The Subscription Agreement must also be
accompanied by a completed, signed Subscriber Questionnaire in the form attached
in the Appendices, and a completed, signed Substitute Form W-9.  We reserve the
right, in our sole discretion, to reject any request to purchase Units.  The
Company may waive the minimum subscription amount at its sole discretion.
 
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Sale by the Company
 
No general solicitation will be permitted in connection with the
Offering.  Persons offering and selling Units will offer the securities only to
prospective purchasers who meet the conditions for investment discussed under
“Investment Suitability Standards” and will be required to otherwise conduct the
Offering in compliance with Regulation D promulgated under the Securities Act
and applicable state securities laws.
 
A prospective purchaser may be represented in making an investment in Common
Stock by a purchaser representative, as that term is defined in Rule 501 (h)
under the Securities Act, in which case a Professional Investment Advisor
Purchaser Representative Questionnaire must be executed by such representative
and the prospective purchaser. Any purchaser representative so retained must
comply with the requirements of Rule 501 (h).
 
Payments to Participating Broker/Dealers
 
The Company will engage certain members of the Financial Industry Regulatory
Authority (‘Representative Placement Agents’) for the sale of Units in this
Offering, and such placement agents shall be entitled to receive ten (10%)
percent selling commissions, which will not be paid with respect to Units sold
to persons introduced by directors and officers of the Company.

The Company shall deliver to Representative Placement Agents warrants (the
“Warrants”), which may be exercised cashless, for the issuance of such number of
the Securities that equals fifty percent (50%) of the amount of the Securities
sold at such Closing (or Closings). The Warrants shall have the same exercise
price as the per share equity valuation established in the Financing
Transaction. The Warrants shall be exercisable for five (5) years from the date
of grant. All Securities issued hereunder to Representative Placement Agents
shall have full anti-dilution rights, demand registration rights and all other
rights identical to those offered to investors under the Financing Transaction.

The Company shall also pay Representative Placement Agents a non-accountable
expense allowance equal to three percent (3%) of the purchase price of the
Securities sold for each Closing (the “Expense Allowance”). The allowance is
intended to cover Representative Placement Agent’s out-of-pocket and other
expenses connected with the offering, as for instance, legal fees, accounting
fees etc. In the event there shall occur more than one Closing, the Expense
Allowance with respect to each Closing shall be calculated as though all
Securities previously sold were sold together at such Closing, except that the
total amount of Expense Allowance previously paid shall be deducted from the
Expense Allowance calculated for that Closing.

Investor Suitability Requirements
 
The Units are being offered pursuant to an exemption from registration under the
Act.  This offering is intended to comply with the provisions of Rule 506 of
Regulation D promulgated by the Securities and Exchange Commission under the
Act, as well as exemptions from registration provided by various state laws or
regulations.  Rule 506 requires that all its provisions be met in order for
exemption from registration to be available thereunder.  Therefore, this
offering will be made in accordance with the requirements of Rule 506.  If that
exemption is not available, it is still intended that the Units will be offered
under an exemption from registration under the Act.
 
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In order to purchase units and meet the requirements of Rule 506 and certain
state securities laws, a prospective investor must demonstrate, among other
things, that the investor:
 
 
·
if a natural person, is over 21 years of age;

 
 
·
has such knowledge and experience in financial matters that he is capable of
understanding the matters set forth herein and of evaluating the merits and
assessing the risks of investing in the Company; and

 
 
·
is purchasing for long-term investment and not with a view to resale or
distribution of the common stock.

 
A potential investor must complete and submit to us an Subscriber Questionnaire
in the form attached in the Appendices to provide us with information sufficient
to determine whether the potential investor qualifies as an accredited investor
under Regulation D, or otherwise has the requisite knowledge and experience in
financial and business matters and is able to bear the economic risk of the
investment such that he is a suitable investor.  A partnership, corporation, or
trust may have to provide special documents to confirm compliance with
applicable suitability standards for such entities.
 
Common Stock will not be readily transferable because there is no established
market for them, and there are stringent restrictions on transfer imposed by
law.  In addition, our Subscription Agreement, attached to this Offering
Confidential Offering Memorandum in the Appendices, imposes further restrictions
on transfer.  Investment in the Company is suitable, therefore, only for persons
of substantial financial means who have no need for liquidity with respect to
the investment.  By investing in EnterConnect, an investor acknowledges that he
or she has been advised of, and understands, the import of applicable federal
and state securities laws, and that no public market exists or is expected to
exist for the resale of the Common Stock.
 
We have the right to refuse to accept a subscription if, in our sole discretion,
we believe that the prospective purchaser does not meet the applicable
suitability requirements or that the Units are otherwise an unsuitable
investment for the prospective purchaser.
 
“Accredited Investor” Criteria
 
In order to qualify as an “accredited investor” under Regulation D, a potential
investor must come within one of the following categories:
 
 
(1)
A bank as defined in section 3(a)(2) of the Act or a savings and loan
association or other institution as defined in section 3(a)(5)(A) of the Act
whether acting in its individual or fiduciary capacity; a broker dealer
registered pursuant to section 15 of the Securities Exchange Act of 1934; an
insurance company as defined in section 2(13) of the Act; an investment company
registered under the Investment Company Act of 1940 or a business development
company as defined in section 2(a)(48) of the Investment Company Act of 1940; a
small business investment company licensed by the U.S. Small Business
Administration under section 301(c) or (d) of the Small Business Investment Act
of 1958; a plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions for the benefit of its employees, if such plan has total assets in
excess of $5,000,000; an employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974, if the investment decision is
made by a plan fiduciary, as defined in section 3(21) of such act, which is
either a bank, savings and loan association, insurance company or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with investment decisions made solely
by persons that are accredited investors;

 
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(2)
A private business development company as defined in section 202(a) (22) of the
Investment Advisers Act of 1940;

 
 
(3)
An organization described in section 501(c)(3) of the Internal Revenue Code, a
corporation, a Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring the securities offered, with total
assets in excess of $5,000,000;

 
 
(4)
A director or executive officer of the Company;

 
 
(5)
A natural person whose individual net worth, or joint net worth with that
person’s spouse, exceeds $1,000,000 at the time of purchase;

 
 
(6)
A natural person who had an individual income (not including that of his or her
spouse) in excess of $200,000 in 2004 and 2005 or joint income with his or her
spouse in excess of $300,000 in each of those years, and who reasonably expects
the same income level in 2006;

 
 
(7)
A trust, with total assets in excess of $5,000,000, not formed for the specific
purpose of acquiring the securities offered, whose purchase is directed by a
person who, either alone or together with his or her purchaser
representative(s), has such knowledge and experience in financial and business
matters that such person is capable of evaluating the merits and risks of the
prospective investment; or

 
 
(8)
An entity in which all of the equity owners are accredited investors.

 
If we determine that a potential investor does not qualify as an accredited
investor and does not alone have the requisite knowledge and experience, but the
investment may otherwise be suitable for the person, the prospective investor
will be requested to retain a qualified “purchaser representative” (as defined
in Rule 501 of Regulation D) to assist the investor in analyzing the merits and
risks of the investment.
 

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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
 
The following is a general discussion of certain material United States federal
income tax considerations relating to the purchase, ownership and disposition of
securities such as those offered herein.  This discussion is based upon the
Code, existing and proposed Treasury Regulations and judicial decisions and
administrative interpretations hereunder, as of the date of this Confidential
Offering Memorandum, all of which are subject to change, possibly with
retroactive effect, or to different interpretations.  We cannot assure you that
the Internal Revenue Service (the “IRS”) will not challenge one or more of the
tax consequences described herein, and we have not obtained, nor do we intend to
obtain, a ruling from the IRS or an opinion of counsel with respect to the
United States federal tax consequences resulting from acquiring, holding or
disposing of the common stock or warrants.
 
In this discussion, we do not purport to address tax consequences that might be
important to a particular holder in light of the holder’s circumstances (such as
the alternative minimum tax provisions of the Code), or to certain categories of
investors (including, but not limited to, certain financial institutions,
insurance companies, tax-exempt organizations, dealers in securities, persons
who hold the Common Stock or Warrants as part of a hedge, conversion
transaction, straddle or other risk reduction transaction, pass-through entities
(e.g., partnerships) or persons who hold the common stock and warrants through a
pass-through entity, foreign entities or individuals who are not citizens or
residents of the United States) that may be subject to special rules.  This
discussion is limited to initial investors generally who hold the common stock
and warrants as capital assets.  This discussion also does not address the tax
considerations arising under the laws of any foreign, state or local
jurisdiction.
 
ANY DISCUSSION OF FEDERAL TAX ISSUES IN THIS CONFIDENTIAL OFFERING MEMORANDUM IS
NOT INTENDED TO BE RELIED UPON AND CANNOT BE RELIED UPON BY UNIT HOLDERS FOR THE
PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER THE INTERNAL REVENUE
CODE.  THE DISCUSSION IN THIS SECTION IS WRITTEN TO SUPPORT THE PROMOTION OR
MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN.  YOU SHOULD CONSULT
YOUR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSIDERATIONS TO YOU OF THE
ACQUISITION, OWNERSHIP AND DISPOSITION OF THE COMMON STOCK AND WARRANTS,
INCLUDING THE EFFECT AND APPLICABILITY OF STATE, LOCAL OR FOREIGN TAX LAWS.
 
Purchase of the Common Stock and Warrants
 
The amount invested by each investor is allocated between the Common Stock and
the Warrant in accordance with the fair market value of each.  We will determine
the allocation of the investment amount paid for each of the Common Stock and
the Warrant and will inform you of such allocation as soon as possible.  That
determination is binding on each investor unless an investor explicitly
discloses that his or her allocation is different from ours.  Generally, the
investor must make the disclosure on a statement attached to the investor’s
timely filed federal income tax return for the taxable year that includes the
acquisition date of the Common Stock and Warrant.
 
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An investor’s tax basis in a Common Stock and a Warrant will equal the amount of
money paid for each of the Common Stock and the Warrant, respectively.
 
Sale, Exchange, Retirement or Other Taxable Disposition of the Common Stock
 
Upon the sale, exchange, retirement or other taxable disposition of the Common
Stock, an investor will recognize gain or loss equal to the difference between
the fair market value of the proceeds received in exchange for the Common Stock
and the investor’s adjusted tax basis in the Common Stock.
 
An investor’s adjusted tax basis in the Common Stock generally will equal the
portion of the investment allocated to the Common Stock decreased by any
repayments of principal received thereon.  Gain or loss realized on the sale,
exchange or retirement of the Common Stock will generally be capital gain or
loss.
 
Sale, Exchange, Retirement or Other Taxable Disposition of the Warrant
 
Upon the sale, exchange, retirement or other taxable disposition of a Warrant,
an investor will recognize gain or loss equal to the difference between the fair
market value of the proceeds received in exchange for the Warrant and the
investor’s adjusted tax basis in the warrant.
 
An investor’s adjusted tax basis in a Warrant generally will equal the portion
of the investment allocated to the Warrant.  Gain or loss realized on the sale,
exchange or retirement of the Common Stock will be capital gain or loss.
 
Exercise of the Warrants
 
The exercise of a Warrant will not cause the holder of the Warrant to recognize
gain or loss.  The adjusted tax basis of the stock received in exchange for the
Warrant will be equal to the adjusted basis in the Warrant plus the amount paid
pursuant to the exercise of the Warrant.  The holding period for the stock
received in exchange for the Warrant will begin on the date of issuance of the
stock to the Warrant holder.
 
Backup Withholding and Information Reporting
 
Information reporting will apply to payments of interest on or the proceeds of
the sale or other disposition of the Common Stock made by us with respect to
certain non-corporate investors.  An investor will further be subject to backup
withholding at the rate of 28% with respect to interest, principal and premium,
if any, we pay on the Common Stock, unless the holder:
 
 
·
is an entity (including corporations, tax-exempt organizations and certain
qualified nominees) that is exempt from withholding and, when required,
demonstrates this fact; or

 
 
·
provides us with a correct taxpayer identification number, certifies that the
taxpayer identification number is correct and that the holder has not been
notified by the IRS that it is subject to backup withholding due to
underreporting of interest or dividends, and otherwise complies with applicable
requirements of the backup withholding rules.

 
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Any amount withheld under the backup withholding rules is allowable as a credit
against the investor’s United States federal income tax liability, provided that
the required information is furnished to the IRS.
 

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LEGAL MATTERS

The validity of the common stock offered hereby has been passed upon for
EnterConnect Inc., by Levy & Boonshoft, P.C., at 477 Madison Avenue, New York,
New York 10022.

Levy & Boonshoft, P.C. are also serving as Escrow Agent under this Memorandum.

EXPERTS

Our financial statements have been audited by Li & Company, PC, independent
registered public accountants, and have been included in this prospectus in
reliance upon the report of that firm and their authority as experts in
accounting and auditing.

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ACCESS TO ADDITIONAL INFORMATION
 
Each prospective investor and his advisor may inquire about any aspect of this
offering.  The Company or its designees will answer all inquiries concerning the
Company and any matter relating to our proposed plan of business, the offering
or the Acquisition.  Prospective investors and their advisors or representatives
will be afforded the opportunity to obtain, and are encouraged to request,
additional information to the extent the Company or its designees possess such
information or can acquire it without unreasonable effort and expense.
 
Copies of documents referred to in this Confidential Offering Memorandum or
otherwise pertaining to the Company will be made available for inspection by
offerees and their designated advisors upon request.  Inquiries and requests for
additional information may be directed to Mr. Jankovich, Chief Executive
Officer, at the following address and phone number:  100 Century Center Court,
Suite 650, San Jose, California 95112, (408) 441-9500.
 
 
OFFERING PROCEDURE

Subscription Agreement and Procedures

In order to subscribe to the Offered Securities, a prospective investor must
deliver the following items to the Placement Agent:

1.
Two executed copies of the Subscription Agreement (included in the Appendices as
Exhibit A of the Memorandum) with signatures properly completed;

2.
One completed and signed copy of the appropriate Confidential Subscriber
Questionnaire (included in the Appendices as Exhibit B of the Memorandum);

3.
(a)        A check payable to “Levy & Boonshoft, P.C, as Escrow Agent for
EnterConnect,” for $100,000 multiplied by the number of Units subscribed
for.  Please add the name of the Placement Agent in the memo section of the
check or

(b)           A wire transfer for $100,000 multiplied by the number of
subscription Units as per the following instructions:

Signature Bank
261 Madison Avenue
New York, New York 10016
ABA No. 026013576

Levy & Boonshoft, P.C.
IOLA Account
477 Madison Avenue
New York, New York 10022
Account No. 1500198423
 
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Subscribers introduced by any Placement Agent should write the name of the
Placement Agent on the Subscription Agreement or on the Check or make a
reference in the wire transfer.

All subscriptions must be made by the execution and delivery of the Subscription
Agreement included in the Appendices. By executing the Subscription Agreement,
each purchaser will represent, among other things, that (a) he or she is
acquiring the Offered Securities being purchased by him or her for his or her
own account, for investment purposes and not with a view towards resale or
distribution and (b) immediately prior to the purchase, such purchaser satisfies
the eligibility requirements set forth in this Memorandum. See “Investor
Suitability Requirements”. Notwithstanding the foregoing representations, the
Company and the Placement Agent each have the right to revoke the offer made
herein and to refuse to sell Offered Securities to a particular subscriber for
any reason.

In addition, since each purchaser will be subject to certain restrictions on the
sale, transfer or disposition of his Offered Securities as contained herein or
in the Subscription Agreement, a purchaser must be prepared to bear the economic
risk of an investment in the Offered Securities for an indefinite period of
time. An investor in the Offered Securities, pursuant to the Subscription
Agreement and applicable law, will not be permitted to transfer or dispose of
the Offered Securities, unless they are registered or unless such transaction is
exempt from registration under the Securities Act and other applicable
securities laws, and in the case of a purportedly exempt sale, such investor
provides (at his or her own expense) an opinion of counsel satisfactory to the
Company that such exemption is, in fact, available. Certificates representing
the shares of Common Stock and Warrants comprising the Offered Securities will
bear a legend relating to such restrictions on transfer.

Subscriptions are not binding on the Company until accepted by the Company. The
Company will refuse any subscription by giving written notice to the subscriber
by personal delivery or first-class mail. In its sole discretion, the Company
may establish a limit on the purchase of Offered Securities by a particular
purchaser.

All subscription funds will be deposited in a non-interest bearing bank account
maintained by the Law Firm of Levy & Boonshoft, P.C. (the “Escrow Agent”)
pursuant to the Escrow Agreement attached hereto as Exhibit D. In the event that
subscriptions accepted on or before the expiration of this Offering Period
aggregate to fewer than $500,000, all funds received from subscribers and held
by the Escrow Agent shall be promptly returned to the subscribers without
interest or deduction directly by the Escrow Agent. The Company and the
Placement Agent reserve the right to accept or reject any subscription in their
sole discretion for any reason whatsoever and to withdraw this Offering at any
time prior to acceptance of the subscriptions received. Subscription funds paid
by any subscriber whose subscription is rejected will be returned promptly.
 
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EXHIBIT “A”
SUBSCRIPTION AGREEMENT
 
 
ENTERCONNECT, INC.
 

INVESTORSUBSCRIPTION AGREEMENT (the "Subscription Agreement") dated
_____________ ____, 2007, between ENTERCONNECT INC., a Nevada corporation (the
"Company") and the person or persons executing this Agreement on the last page
(the "Subscriber").  All documents mentioned herein are incorporated herein by
reference.

1.              Description of the Offering.  This Subscription Agreement is for
units (the “Units”) comprised of Common Stock, par value $0.001 per share (the
“Common Stock”) and warrants (the “Warrants”) to purchase shares of the Common
Stock.  This Offering (the “Offering”) is made only to accredited investors who
qualify as accredited investors pursuant to the suitability standards for
investors described under Regulation D of the Securities Act of 1933, as amended
(the “Securities Act”) and who have no need for liquidity in their
investments.  The Offering is for a minimum investment of $100,000.00. However,
the Company reserves the right, in its sole discretion, to accept fractional
subscriptions.  Prior to this Offering there was no public market for the Common
Stock, the Warrants of the Common Stock, and no assurance can be given that a
market will develop for the Common Stock or the Warrants of the Common Stock, if
developed, that it will be maintained so that any subscribers in this Offering
may avail any benefit from the same.

2.               Registration Rights. The Company will use its reasonable best
efforts, subject to receipt of necessary information from the Investors, to
cause the Registration Statement to be filed no later than thirty (30) days
after the date of final Closing (the “Required Filing Date”) and to become
effective no later than one hundred twenty (120) days after the Registration
Statement was filed with the SEC (the “Required Effective Date”). If the
Registration Statement has not been filed on or before the Required Filing Date,
or has not been declared effective by the SEC on or before the Required
Effective Date because of the Company’s breach of this provision, or does not
remain effective (any such failure being referred to as an “Event”), then the
Investor shall be entitled to receive from the Company, as payment in full
satisfaction for such Event, warrants to purchase an aggregate number of shares
of Common Stock equal to 1.5% of the number of issued Shares upon the same terms
as the Warrants (i) at the time of such Event, and (ii) upon each monthly
anniversary of such Event until the Event is cured, up to a maximum aggregate
amount of 10% of the Shares (the “Late Registration Warrants”). In the event of
changes in the outstanding Common Stock of the Company by reason of a stock
dividend, stock split, reverse stock split, reorganization, recapitalization,
merger, consolidation, liquidation, separation, combination or exchange of
stock, change in the Company’s business structure or sale or transfer of all or
any part of the Company’s business or assets (referred to as a “Capital
Adjustment”), the number of Late Registration Warrants shall be adjusted
consistent with such Capital Adjustment. Until such time that the resale of the
Units is registered pursuant to a registration statement declared effective by
the Securities and Exchange Commission, the offered securities may be resold
only pursuant to Rule 144 under the Securities Act or pursuant to another
exemption from registration under the Securities Act, if any.

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AS MORE PARTICULARLY SET FORTH IN THAT CERTAIN CONFIDENTIAL PRIVATE PLACEMENT
MEMORANDUM DATED OCTOBER 16, 2007 (THE “MEMORANDUM”) AND SUBJECT TO THE TERMS
AND CONDITIONS SET FORTH THERIN MORE FULLY, THE SECURITIES OFFERED HEREBY ARE
SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK AND SHOULD NOT BE PURCHASED BY
ANYONE WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. THE SECURITIES
OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE
SECURITIES LAWS OF ANY STATE, OR OTHER JURISDICTION AND ARE BEING OFFERED AND
SOLD IN RELIANCE ON EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND SUCH LAWS. THESE SECURITIES MAY NOT BE TRANSFERRED, SOLD,
PLEDGED, HYPOTHECATED OR ASSIGNED EXCEPT AS PERMITTED UNDER SUCH ACT OR SUCH
LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.

3.    Terms of the Subscription.   This Offering is made pursuant to the terms
and conditions set forth in the Memorandum which is incorporated by reference
and made a part of this Subscription Agreement. The subscription is for units
(the “Units”) comprised of shares of Common Stock and Warrants to purchase
shares of the Common Stock.  The Common Stock is of $0.75 per share, subject to
adjustment.  The Warrants (a form of which is attached to the Memorandum in the
Appendices) may be exercised immediately upon issuance to purchase shares of the
Company’s Common Stock as follows:  66,666 shares at a price of $1.50 per share,
subject to adjustment.

4.    Other Terms of the Offering.   The execution of this Subscription
Agreement shall constitute an offer by the Subscriber to subscribe for the
Common Stock and the Warrants in the amount and on the terms specified
herein.  The Subscriber must also complete and execute the Subscriber
Questionnaire included in the Memorandum Appendices.  The Company reserves the
right, in its sole discretion, to reject in whole or in part, any subscription
offer.  If the Subscriber's offer is accepted, the Company will execute a copy
of this Subscription Agreement and return it to Subscriber.  The Company may, at
its sole discretion, accept fractional subscriptions.

5.    Subscription Payment.   Subscription for each Unit requires a total cash
investment of $100,000.  The subscription price will be payable in full upon
acceptance of the subscription.  The Company reserves the right to accept
fractional subscriptions.

6.    The Company's Representations and Warranties.  The Company hereby
represents and warrants as follows:

(a)    The Company is a corporation duly formed and in good standing under the
laws of the State of Nevada with full power and authority to conduct its
business as presently contemplated; and

(b)    The Company warrants and covenants that there are no material
misstatements or omissions in this Subscription Agreement or in the Memorandum

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7.    Subscriber's Representations, Warranties and Covenants.  The undersigned
understands and acknowledges that the Common Stock, the Warrants and the Common
Stock underlying same subscribed for herein (the “Securities”) are being offered
and sold under one or more of the exemptions from registration provided for in
Section 3(b), 4(2) and 4(6) of the Securities Act including, Regulation D
promulgated thereunder, that the undersigned acknowledges that the Securities
are being purchased without the undersigned being offered or furnished any
offering literature, prospectus or other material, financial or otherwise, and
that this action has not been scrutinized by the United States Securities and
Exchange Commission or by any regulatory authority charged with the
administration of the securities laws of any state.  The undersigned hereby
further represents and warrants as follows:

(a)    The undersigned confirms that he understands and has fully considered,
for purposes of this investment, the risks of an investment in the Securities
and understands that:  (i) this investment is suitable only for an investor who
is able to bear the economic consequences or losing his entire investment, (ii)
the purchase of the Securities is a speculative investment which involves a high
degree of risk of loss by the undersigned of his entire investment, and (iii)
that there will be no public market for the Securities and the Common Stock
thereunder and accordingly, it may not be possible for the undersigned to
liquidate an investment in the Securities in case of an emergency.

(b)    The Subscriber is an "Accredited Investor" as defined in Rule 501(a) of
Regulation D under the Securities Act.  This representation is based on the fact
that the Subscriber, inter alia, is an accredited individual who, together with
the Subscriber’s spouse, have a net worth of at least $1,000,000 or the
Subscriber, individually, has had net income of not less than $200,000 during
the last two years, and reasonably anticipates that the Subscriber will have an
income of at least $200,000 during the present year and the next year;

(c)    If the Subscriber is a corporation, partnership, trust or any
unincorporated association: (i) the person executing this Subscription Agreement
does so with full right, power and authority to make this investment; (ii) that
such entity was not formed for the specific purpose of making an investment in
the Company; and (iii) that all further representations and warranties made
herein are true and correct with respect to such corporation, partnership, trust
and unincorporated association;

(d)    The address set forth below is the Subscriber's true and correct
residence or place of business, and the Subscriber has no present intention of
becoming a resident of any other state or jurisdiction;

(e)    The Subscriber understands and agrees that the Company prohibits the
investment of funds by any persons or entities that are acting, directly or
indirectly, (i) in contravention of any U.S. or international laws and
regulations, including anti-money laundering regulations or conventions, (ii) on
behalf of terrorists or terrorist organizations, including those persons or
entities that are included on the List of Specially Designated Nationals and
Blocked Persons maintained by the U.S. Treasury Department's Office of Foreign
Assets Control1 ("OFAC"), as such list may be amended from time to time, (iii)
for a senior foreign political figure, any member of a senior foreign political
figure’s immediate family or any close associate of a senior foreign political
figure2, unless the Company, after being specifically notified by the Subscriber
in writing that it is such a person, conducts further due diligence, and
determines that such investment shall be permitted, or (iv) for a foreign shell
bank3 (such persons or entities in (i) – (iv) are collectively referred to as
"Prohibited Persons").
______________________
1    The OFAC list may be accessed on the web at http://www.treas.gov/ofac.

A-17

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(f)    The Subscriber represents, warrants and covenants that: (i) it is not,
nor is any person or entity controlling, controlled by or under common control
with the Subscriber, a Prohibited Person, and (ii) to the extent the Subscriber
has any beneficial owners5, (a) it has carried out thorough due diligence to
establish the identities of such beneficial owners, (b) based on such due
diligence, the Subscriber reasonably believes that no such beneficial owners are
Prohibited Persons, (c) it holds the evidence of such identities and status and
will maintain all such evidence for at least five years from the date of the
Subscriber's complete withdrawal from the Company, and (d) it will make
available such information and any additional information requested by the
Company that is required under applicable regulations.

(g)           If any of the foregoing representations, warranties or covenants
cease to be true or if the Company no longer reasonably believes that it has
satisfactory evidence as to their truth, notwithstanding any other agreement to
the contrary, the Company may, in accordance with applicable regulations, freeze
the Subscriber's investment, either by prohibiting additional investments,
declining or suspending any withdrawal requests and/or segregating the assets
constituting the investment, or the Subscriber's investment may immediately be
involuntarily withdrawn by the Company, and the Company may also be required to
report such action and to disclose the Subscriber's identity to OFAC or other
authority.  In the event that the Company is required to take any of the
foregoing actions, the Subscriber understands and agrees that it shall have no
claim against the Company, and its respective affiliates, directors, members,
partners, shareholders, officers, employees and agents for any form of damages
as a result of any of the aforementioned actions.

(h)           The Subscriber agrees to indemnify and hold harmless the Company,
its respective affiliates, directors, members, partners, shareholders, officers,
employees and agents from and against any and all losses, liabilities, damages,
penalties, costs, fees and expenses (including legal fees and disbursements)
which may result, directly or indirectly, from any inaccuracy in or breach of
any representation, warranty, covenant or agreement set forth in this Agreement.
______________________
2           Senior foreign political figure means a senior official in the
executive, legislative, administrative, military or judicial branches of a
foreign government (whether elected or not), a senior official of a major
foreign political party, or a senior executive of a foreign government-owned
corporation.  In addition, a senior foreign political figure includes any
corporation, business or other entity that has been formed by, or for the
benefit of, a senior foreign political figure.  The immediate family of a senior
foreign political figure typically includes the political figure’s parents,
siblings, spouse, children and in-laws.  A close associate of a senior foreign
political figure is a person who is widely and publicly known internationally to
maintain an unusually close relationship with the senior foreign political
figure, and includes a person who is in a position to conduct substantial
domestic and international financial transactions on behalf of the senior
foreign political figure.
3           Foreign shell bank means a foreign bank without a physical presence
in any country, but does not include a regulated affiliate.  A post office box
or electronic address would not be considered a physical presence.  A regulated
affiliate means a foreign shell bank that: (1) is an affiliate of a depository
institution, credit union, or foreign bank that maintains a physical presence in
the United States or a foreign country, as applicable; and (2) is subject to
supervision by a banking authority in the country regulating such affiliated
depository institution, credit union, or foreign bank.
4           Beneficial owners will include, but not be limited to: (i)
shareholders of a corporation; (ii) partners of a partnership; (iii) members of
a limited liability company; (iv) investors in a fund-of-funds; (v) the grantor
of a revocable or grantor trust; (vi) the beneficiaries of an irrevocable trust;
(vii) the individual who established an IRA; (viii) the participant in a
self-directed pension plan; (ix) the sponsor of any other pension plan; and (x)
any person being represented by the Subscriber in an agent, representative,
intermediary, nominee or similar capacity.  If the beneficial owner is itself an
entity, the information and representations set forth herein must also be given
with respect to its individual beneficial owners.  If the Subscriber is a
publicly-traded company, it need not conduct due diligence as to its beneficial
owners.

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(i)    The Subscriber has received and read or reviewed, is familiar with and
fully understands the Memorandum  furnished by the Company.  The Subscriber also
fully understands this Subscription Agreement and the risks associated with this
interest and confirms that all documents, records and books pertaining to the
Subscriber’s investment in the Securities and requested by the Subscriber have
been made available or delivered to the Subscriber by the Company;

(j)    The Subscriber has had an opportunity to ask questions of and receive
answers from, the Company or a person or persons acting on its behalf,
concerning the terms and conditions of this investment and confirms that all
documents, records and books pertaining to the investment in the Securities and
requested by the Subscriber has been made available or delivered to the
Subscriber;

(k)           The Subscriber will be acquiring the Securities, and the shares of
Common Stock underlying the Securities, solely for the Subscriber's own account,
for investment and not with a view toward the resale, distribution, subdivision
or fractionalization thereof; and the Subscriber has no present plans to enter
into any such contract, undertaking, agreement or arrangement;

(l)    The Subscriber acknowledges and understands that prior to this Offering
there was no public market for the Securities and no assurance can be given that
a public market will develop for the Securities offered hereby, or if developed,
that it will be maintained so that any subscribers in this Offering may avail
any benefit from the same;

(m)           The Subscriber's compliance with the terms and conditions of this
Subscription Agreement will not conflict with any instrument or agreement
pertaining to the Securities or the transactions contemplated herein; and will
not conflict in, result in a breach of, or constitute a default under any
instrument to which the Subscriber is a party;

(n)           The Subscriber will seek its own legal, tax and investment advice
concerning tax implications attendant upon the purchase of the Securities and
understands and accepts that the Company is relying upon this representation
insofar as disclosure of tax matters is concerned;

(o)   The Subscriber hereby acknowledges and represents that the Subscriber is
aware of the information set forth in this document and in any exhibits attached
hereto; and

(p)   The foregoing representations and warranties are true and accurate as of
the date hereof and shall be true and accurate as of the date of delivery of the
subscription to the Company and shall survive such delivery.  If, in any
respect, such representations and warranties shall not be true and accurate, the
Subscriber shall give written notice of such fact to the Company, specifying
which representations and warranties are not true and accurate and the reasons
therefore.

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8.    Risk Factors.  THE SUBSCRIBER ACKNOWLEDGES THAT THERE ARE SIGNIFICANT
RISKS ASSOCIATED WITH THE PURCHASE OF THE UNITS AND THAT SUCH SECURITIES ARE
HIGHLY SPECULATIVE AND SHOULD NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD A
TOTAL LOSS OF HIS ENTIRE INVESTMENT. The Subscriber represents and warrants that
he or she has carefully considered and reviewed the risk factors set forth in
the Memorandum which are hereby incorporated by reference in reaching a
determination to purchase the Securities:

 
9.    Responsibility.  The Company or its officers and directors shall not be
liable, responsible or accountable for damages or otherwise to any Subscriber
for any act or omission performed or omitted by them in good faith and in a
manner reasonably believed by them to be within the scope of the authority
granted to them by this Subscription Agreement and in the best interests of the
Company, provided they were not guilty of gross negligence, willful or wanton
misconduct, fraud, bad faith or any other breach of fiduciary duty with respect
to such acts or omissions.

10.      Miscellaneous.

(a)   The Company and the Subscriber hereby covenant that this Subscription
Agreement is intended to and does contain and embody herein only finally and
exclusively all of the understandings and agreements, both written or oral, of
the Company and the Subscriber with respect to the subject matter of this
Subscription Agreement, and that there exists no oral agreement or
understanding, express or implied liability, whereby the absolute, final and
unconditional character and nature of this Subscription Agreement shall be in
any way invalidated, empowered or affected.  There are no representations,
warranties or covenants other than those set forth herein.

(b)   The headings of this Subscription Agreement are for convenient reference
only and they shall not limit or otherwise affect the interpretation or effect
of any terms or provisions hereof.

(c)   This Subscription Agreement shall not be changed or terminated except as
set forth herein.  All of the terms and provisions of this Subscription
Agreement shall be binding upon and inure to the benefit of and be enforceable
by and against the successors and assigns of the Company and the heirs,
executors, administrators and assigns of the Subscriber.

(d)   A modification or waiver of any of the provisions of this Subscription
Agreement shall be effective only if made in writing and executed with the same
formality as this Subscription Agreement.  The failure of either the Company or
the Subscriber to insist upon strict performance of any of the provisions of
this Subscription Agreement shall not be construed as a waiver of any subsequent
default of the same or similar nature, or of any other nature or kind.

(e)   The various provisions of this Subscription Agreement are severable from
each other and from the other provisions of this Agreement, and in the event
that any provision in this Subscription Agreement shall be held invalid or
unenforceable by a court of competent jurisdiction, the remainder of this
Subscription Agreement shall be fully effective, operative and enforceable.

A-20

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(f)    Pronouns used herein are to be interpreted as referring to both the
masculine and feminine gender.

(g)   This Subscription Agreement shall be construed and interpreted in
accordance with the laws of the State of Nevada without reference to conflict of
laws principle.  The parties agree that in the event of a laws controversy
arising out of the interpretation, construction, performance or breach of this
Subscription Agreement, any and all claims arising out of, or relating to, this
Subscription Agreement shall be submitted by arbitration according to the
Commercial Arbitration Rules of the American Arbitration Association located in
New York City before a single arbitrator.  Notwithstanding the prior sentence,
any other action commenced by either party herein shall be venued in the
appropriate court of competent jurisdiction located in the county of New York,
State of New York.

(h)   This Subscription Agreement may be executed in one or more counterparts
each of which shall be deemed an original and all of which together shall be
deemed to be one and the same instrument.

THE SUBSCRIBER ACKNOWLEDGES THAT, EXCEPT AS SET FORTH IN THIS AGREEMENT OR THE
MEMORANDUM, NO REPRESENTATIONS OR WARRANTIES HAVE BEEN MADE TO IT, OR TO ITS
ADVISORS, BY THE COMPANY, OR BY ANY PERSON ACTING ON BEHALF OF THE COMPANY, WITH
RESPECT TO THE INTERESTS, THE PROPOSED BUSINESS OF THE COMPANY, THE
DEDUCTIBILITY OF ANY ITEM FOR TAX PURPOSES, AND/OR THE ECONOMIC, TAX, OR ANY
OTHER ASPECTS OR CONSEQUENCES OF A PURCHASE OF AN INTEREST AND/OR ANY INVESTMENT
IN THE COMPANY, AND THAT IT HAS NOT RELIED UPON ANY INFORMATION CONCERNING THE
OFFERING, WRITTEN OR ORAL, OTHER THAN THAT CONTAINED IN THIS AGREEMENT OR THE
MEMORANDUM.

 
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A-21

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SUBSCRIPTION AGREEMENT
 
ENTERCONNECT INC.
 

SIGNATURE PAGE

The Subscriber hereby offers to purchase and subscribe to _______Unit(s) and
encloses payment of $________ for an aggregate investment of $_________.

The Subscriber was referred, if at all, by the following Placement Agent:

Placement Agent:___________________

 
 
   
Signature of Subscriber
         
 
   
Name of Subscriber
         
 
   
Name and Title of Authorized Signatory
   
(If Applicable)
         
 
   
(Print) Street Address - Residence
         
 
   
(Print) City, State and Zip Code
         
 
   
Social Security/Taxpayer I.D. Number
 

AGREED TO AND ACCEPTED:

As of ___________, 2007

ENTERCONNECT INC.

By:
 
   
Sam Jankovich, Chief Executive Officer
 

 
A-22

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COMPLETE “SUBSCRIBER QUESTIONNAIRE” BELOW;
PROVIDE ADDITIONAL REQUISITE INFORMATION

EXHIBIT “B”
SUBSCRIBER QUESTIONNAIRE

PERSONAL DATA:

 
 
 
 
Full Name
 
Residence Telephone (Area Code Number)
         
 
 
 
 
Residence or Principal Address (Street/City/State/Zip Code)
 
Business Telephone (Area Code Number)
         
 
 
 
 
Mailing Address (if other than residence)
 
Mobile Telephone (Area Code Number)
         
 
 
 
 
Date of Birth
 
Social Security/Taxpayer I.D.  Number
         
 
 
 
 
Marital Status
 
Citizenship (U.S./Other)
         
 
 
 
 
Spouse’s Full Name
 
Email Address
         
 
 
 
 
Spouse’s Social Security Number
 
Facsimile Number (Area Code/Number)
 

ACCREDITED INVESTOR.  If Subscriber (or the entity on behalf of which Subscriber
is acting) is an “accredited investor” as that term is defined in Rule 501(a) of
Regulation D promulgated under the Act, and, as such, falls within at least one
of the following categories, then please INITIAL each applicable category.

______
(a)
A bank or savings and loan association or other institution (acting either in an
individual or fiduciary capacity), registered broker-dealer, insurance company,
registered investment company, or business development company, or licensed
“small business investment company,” or an employee benefit plan which either is
represented in a fiduciary capacity by a bank, savings and loan association,
insurance company or registered investment advisor, has total assets in excess
of $5,000,000 or is self-directed and the plan’s business investments are made
solely by accredited investors.

 
B-1

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______
(b)
A trust (i) with total assets in excess of $5,000,000, (ii) which was not formed
for the specific purpose of acquiring the subject securities, and (iii) whose
purchase is directed by a person who has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of the prospective investment.

______
(c)
An organization described in Section 501(c)(3) of the Internal Revenue Code,
corporation or similar business trust, or partnership, not formed for the
specific purpose of acquiring the subject securities, with total assets in
excess of $5,000,000.

______
(d)
An entity in which all of the equity owners are “accredited investors.”

______
(e)
A director or an executive officer of the Company.

______
(f)
A natural person whose individual net worth, or joint net worth with spouse (if
any), exceeds $1,000,000

______
(g)
A natural person whose income in each of the two most recent calendar years
exceeded $200,000 individually, or $300,000 jointly with spouse (if any), and
who reasonably expects to reach that income level in the current year.

 

--------------------------------------------------------------------------------

 

 
Signature of Subscriber
     
 
 
Name of Subscriber
     
 
 
Name and Title of Authorized Signatory
 
(If Applicable)
     
 
 
(Print) Street Address - Residence
     
 
 
(Print) City, State and Zip Code
     
 
 
Social Security/Taxpayer I.D. Number

 
B-2

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EXHIBIT “D”
ESCROW AGREEMENT

THIS ESCROW AGREEMENT (this “Agreement”) is made as of the 12th day of November,
2007, by and between ENTERCONNECT INC., a Nevada corporation (the
“Corporation”), and LEVY & BOONSHOFT, P.C., a New York professional corporation
(the “Escrow Agent”).
 
WITNESSETH
 
WHEREAS, the Corporation is desirous of conducting a private placement (the
“Offering”) of its securities (the “Units”) pursuant an exemption from
registration provided by Regulation D of the Securities Act of 1933, as amended
for a minimum, aggregate offering of ten (5) Units for a subscription amount of
Five Hundred Thousand Dollars ($500,000) (the “Minimum Offering”) and a maximum,
aggregate offering of fifty (20) Units for a subscription amount of Five Million
Dollars ($2,000,000) (the “Maximum Offering”); and
 
WHEREAS, the Escrow Agent will serve as an escrow agent for the proceeds of the
subscription; and
 
WHEREAS, the Offering will commence immediately upon the execution and delivery
of this Agreement and will continue until the earlier to occur of (i) the sale
of a number of Units to equal the Maximum Offering, or (ii) the termination of
the Offering on November 30, 2007 (the “Initial Closing Date”), unless such date
is extended by the Corporation in its sole discretion to a date that is in no
event later than December 31, 2007 (the “Termination Date”); the period from the
date hereof through the Termination Date is hereinafter called, the “Offering
Period”; and
 
WHEREAS, all subscription proceeds are proposed to held by the Escrow Agent
pursuant to this Agreement until subscription moneys from eligible investors
equal to the Minimum Offering are received at or prior to the Initial Closing
Date, at which date and time the Corporation will conduct a closing (the
“Closing”) on the sale of Units and the proceeds of the Offering will be
immediately thereafter disbursed in accordance with and subject to the terms and
conditions of this Agreement; and
 
D-1

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WHEREAS, any subsequent Closings may be held at the discretion of the
Corporation with respect to additional sales of Units up to the Maximum Offering
amount during the Offering Period; and
 
WHEREAS, subscriptions tendered for all Units shall be subject to acceptance by
the Corporation (each, a “Closing”), which subscriptions may be reduced in the
sole discretion of the Corporation or rejected should the subscriber not satisfy
the requirements of the Offering, or for any other reason in the sole discretion
of the Corporation; and
 
WHEREAS, proceeds from the sale of the Units shall be held in escrow by the
Escrow Agent in a non-interest bearing account pending a Closing and if no such
Closing is conducted, then such funds shall be returned to the subscribers, with
interest (to the extent obtained by the Corporation) after the Termination Date
or any earlier termination of the Offering;
 
NOW, THEREFORE, in consideration of the mutual promises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
 
1.           Appointment of Escrow Agent: The Corporation hereby appoints Levy &
Boonshoft, P.C. as Escrow Agent in accordance with the terms and conditions set
forth herein, and the Escrow Agent hereby accepts such appointment.
 
2.           Delivery of Subscription Proceeds: All checks, drafts or other
instruments received from subscribers for the Units will be delivered by the
Corporation to the Escrow Agent, made payable to “Levy & Boonshoft, P.C. as
Escrow Agent of EnterConnect” together with, as to each subscriber, his name,
address, social security number or employer identification number, number of
Shares subscribed for, and the amount paid in connection with such
subscription.  The Escrow Agent is hereby empowered, on behalf of the
Corporation, to endorse and collect all checks, drafts, wire transfers or other
instruments received on account of subscriptions for Units.  The Escrow Agent
hereby represents and warrants that it has not received any subscription
documents or subscription money from any person pursuant to that certain
Confidential Private Placement Memorandum of the Corporation dated as of October
17, 2007 under which the Escrow Agent previously served as an escrow agent.
 
D-2

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3.           Escrow Agent to Hold and Distribute Funds: The Escrow Agent will
hold and disburse all funds received by it (the “Escrow Funds”), as follows:
 
3.1 The Escrow Funds (or any portion thereof) shall be disbursed solely and
exclusively in accordance with this Agreement upon written instructions signed
by the undersigned officer on behalf of the Corporation;
 
3.2 All Escrow Funds shall be held in a non-interest bearing account held by the
Escrow Agent in a separate account with the Escrow Agent called the “Levy &
Boonshoft, P.C., as Escrow Agent of EnterConnect”;
 
3.3 Subject to the Escrow Agent receiving the aggregate Minimum Offering amount
by the Initial Closing Date (or the Termination Date if the Closing is extended
by written notice to Escrow Agent), in the event that the Escrow Agent has not
received written instructions from the Corporation for the disbursement of the
Escrow Funds, then the Escrow Agent shall, within ten (10) business days of
Termination Date, return to the subscribers for the Units the respective amounts
which such subscribers have paid, without deduction of any kind whatsoever;
 
D-3

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3.4 In the event that by the Initial Closing Date (or the Termination Date if
the Closing is extended), the Escrow Agent has not received subscriptions for
the Minimum Offering amount of Five Hundred Thousand Dollars ($500,000), then
the Escrow Agent shall, within five (5) business days after the Initial Closing
Date (or the Termination Date, as applicable) return to the subscribers for the
Units the respective amounts which such subscribers have paid, without deduction
of any kind whatsoever;
 
3.5 The Corporation will conduct a Closing upon receiving the Minimum Offering
amount.  At such time and any subsequent Closings, the Escrow Agent shall
disburse to: (i) each participating broker-dealer ten (10%) percent of the
aggregate Offering amount received until then by the Escrow Agent from
subscribers introduced by that participating broker-dealer. The following are
participating broker dealers: Sandgrain Securities, Inc.; and (ii) balance of
the Corporation. In no event any disbursement of any subscription money shall be
made to the Corporation without corresponding disbursement being made to the
participating broker that introduced the subscriber.  In the event of any doubt
as to the appropriate participating broker-dealer, the Escrow Agent shall
continue to hold the Escrow Fund.
 
3.6 The Escrow Agent shall not be required to pay any uncollected funds that are
not available for withdrawal.
 
 
4.
Exculpation and Indemnification of Escrow Agent:

 
4.1           The Escrow Agent shall have no duties or responsibilities other
than those expressly set forth herein. The Escrow Agent shall have no duty to
enforce any obligation of any person to make any payment or delivery, or to
direct or cause any payment or delivery to be made, or to enforce any obligation
of any person to perform any other act.  The Escrow Agent shall be under no
liability to the other parties hereto (other than the participating broker
dealers) or to anyone else by reason of any failure on the part of any party
hereto or any maker, guarantor, endorser or other signatory of any document or
any other person to perform such person’s obligations under any such
document.  Except for amendments to this Agreement referred to below, and except
for instructions given to the Escrow Agent in accordance with this Agreement by
the Corporation relating to the Escrow Funds, the Escrow Agent shall not be
obligated to recognize any agreement between any and all of the persons referred
to herein, notwithstanding that references thereto may be made herein and
whether or not it has knowledge thereof.
 
D-4

--------------------------------------------------------------------------------

 
4.2           The Escrow Agent shall not be liable to the Corporation or to
anyone else for any action taken or omitted by it, or any action suffered by it
to be taken or omitted, unless the Escrow Agent shall be adjudged to be liable
for gross negligence or willful misconduct.  The Escrow Agent may rely
conclusively and shall be protected in acting upon any order, notice, demand,
certificate, opinion or advice of counsel (including counsel chosen by the
Escrow Agent), statement instrument, report or other paper or document (not only
as to its due execution and the validity and effectiveness of its provisions,
but also as to the truth and acceptability of any information therein
contained), which is believed by the Escrow Agent to be genuine and to be signed
or presented by the proper person or persons.  The Escrow Agent shall not be
bound by any notice or demand, or any waiver, modification, termination or
rescission of this Agreement or any of the terms thereof, unless evidenced by a
writing delivered to the Escrow Agent signed by the proper party or parties and,
if the duties or rights of the Escrow Agent are affected, unless it shall give
its prior written consent thereto.  In addition, the Escrow Agent shall not be
required to ascertain whether any instructions received by the Escrow Agent have
been duly authorized or whether any signature is genuine. The names and true
signatures of each individual authorized to act singly on behalf of the
Corporation are stated in Schedule A, which is attached hereto and made a part
hereof.
 
4.3           The Escrow Agent shall not be responsible for the sufficiency or
accuracy of the form of, or the execution, validity or genuineness of, any
document or property received, held or delivered by it hereunder, or of any
signature or endorsement thereon, or for any lack of endorsement thereon, or for
any description therein; nor shall the Escrow Agent be responsible or liable to
the other parties hereto or to anyone else in any respect on account of the
indemnity, authority or rights of the persons executing or delivering or
purporting to execute or deliver any document or property on this
Agreement.  The Escrow Agent shall have no responsibility with respect to the
use or application of any funds or other property paid or delivered by the
Escrow Agent pursuant to the provisions hereof.  The Escrow Agent shall not be
liable to the Corporation or to anyone else for any loss which may be incurred
by reason of any investment of any monies which it holds hereunder provided the
Escrow Agent has complied with the provisions hereunder.
 
D-5

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4.4           The Escrow Agent shall have the right to assume in the absence of
written notice to the contrary from the proper person or persons that a fact or
an event by reason of which an action would or might be taken by the Escrow
Agent does not exist or has not occurred, without incurring liability to the
other parties hereto or to anyone else for any action taken or omitted, or any
action suffered by it to be taken or omitted, in good faith and in the exercise
of its own best judgment, in reliance upon such assumption.
 
4.5           The Escrow Agent shall be indemnified and held harmless by the
Corporation from and against any and all expenses, including reasonable counsel
fees and disbursements, or loss suffered by the Escrow Agent in connection with
any action, suit or other proceeding involving any claim, or in connection with
any claim or demand, which in any way, directly or indirectly, arises out of or
relates to this Agreement, the services of the Escrow Agent hereunder, the
monies or other property held by it hereunder or any income earned from
investment of such monies.  The Escrow Agent shall have a lien for the amount of
any such expenses or loss on the monies and other property held by it hereunder
and shall be entitled to reimburse itself from such monies and other property
held by it hereunder for the amount of any such expense or loss.  Promptly after
the receipt by the Escrow Agent or notice of any demand or claim or the
commencement of any action, suit or proceeding, the Escrow Agent shall, if a
claim in respect thereof is to be made against the Corporation, notify the
Corporation thereof in writing, but the failure by the Escrow Agent to give such
notice shall not relieve the Corporation from any liability which the
Corporation may have to the Escrow Agent hereunder.  Notwithstanding any
obligation to make payments and deliveries hereunder, the Escrow Agent may
retain and hold for such time as it deems necessary such amount of monies or
property as it shall, from time to time, in its sole discretion, deem sufficient
to indemnify itself for any such loss or expense and for any amounts due it
under Section 7.
 
D-6

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4.6           For the purposes hereof, the term “expense or loss” shall include
all amounts paid or payable to satisfy any claim, demand or liability, or in
settlement of any claim, demand, action, suit or proceeding settled with the
express written consent of the Escrow Agent, and all costs and expenses,
including, but not limited to, reasonable counsel fees and disbursements, paid
or incurred in investigating or defending against any such claim, demand,
action, suit or proceeding.
 
 
5.
Termination of Agreement and Registration of Escrow Agent.

 
5.1           This Escrow Agreement shall terminate on the final disposition of
the monies and property held in escrow hereunder, provided that the rights of
the Escrow Agent and the obligations of the other parties hereto under Sections
4 and 7 shall survive the termination hereof.
 
5.2           The Escrow Agent may resign at any time and be discharged from its
duties as Escrow Agent hereunder by giving the Corporation at least thirty (30)
days’ notice thereof.  As soon as practicable after its resignation, the Escrow
Agent shall turn over to a successor escrow agent appointed by the Corporation
all monies and property held hereunder (less such amount as the Escrow Agent is
entitled to retain pursuant to Section 7) upon presentation of the document
appointing the new escrow agent and its acceptance thereof.  If no new agent is
so appointed within the thirty (30) day period following such notice of
resignation, the Escrow Agent may deposit the aforesaid monies and property with
any court it deems appropriate.
 
D-7

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6.
Form of Payments by Escrow Agent

 
6.1           Any payments by the Escrow Agent to subscribers or to persons
other than the Corporation and the participating broker-dealers pursuant to the
terms of this Agreement shall be made by check or wire transfer with
instructions for same to be provided by the Corporation and the participating
broker-dealers upon each break from Escrow.  The wire instructions of Sandgrain
Securities Inc. are attached hereto as Exhibit A.
 
6.2           All amounts referred to herein are expressed in United States
Dollars and all payments by the Escrow Agent shall be made in such dollars.
 
7.           Compensation of Escrow Agent.  For services rendered, the Escrow
Agent shall also be entitled to reimbursement from the Corporation for all
expenses paid or incurred by it in the administration of its duties hereunder,
including, but not limited to all counsel, advisors’ and Escrow Agents’ fees and
disbursements and all reasonable taxes or other governmental charges.  It is
anticipated that such disbursement shall not exceed $500 barring any unforeseen
circumstances.
 
8.           Notices.  All notices, requests, demands and other communication
provided for herein shall be in writing, shall be delivered by hand or by
first-class mail, shall be deemed given when received and shall be addressed to
the parties hereto at their respective addresses listed below or to such other
persons or addresses as the relevant party shall designate as to itself from
time to time in writing delivered in like manner.
 
D-8

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If to the Corporation:

EnterConnect, Inc.
100 Century Center Court
Suite 650
San Jose, CA 95112
Attn:  Sam Jankovich, CEO
Tel:  (408) 441-5280
Fax: (408) 452-9040

With a copy to:

Sandgrain Securities, Inc.
1050 Franklin Avenue, Suite 300
Garden City, New York 11530
Tel: 516-750-7800
Fax: 516-741-0390
Attn.: Peter Grassel
 
If to Escrow Agent:

Levy & Boonshoft, P.C.
Attn: Peter Campitiello, Esq.
477 Madison Avenue - 14th Floor
New York, New York 10022
Tel: (212) 751-1414
Fax: (212) 751-6943
 
9.           Further Assurances.  From time to time on and after the date
hereof, the Corporation shall deliver to the Escrow Agent such further documents
and instruments and shall do and cause to be done such further acts as the
Escrow Agent shall reasonably request (it being understood that the Escrow Agent
shall have no obligation to make any such request) to carry out more effectively
the provisions and purposes of this Agreement, to evidence compliance herewith
or to assure itself that it is protected in acting hereunder.
 
10.           Consent to Service of Process.  The Corporation hereby irrevocably
consents to the jurisdiction of the courts of the Georgia and of any federal
court located in such State in connection with any action, suit or other
proceeding arising out of or relating to this Agreement or any action taken or
omitted hereunder, and waives personal service of any summons, complaint or
other process and agrees that the service thereof may be made by certified or
registered mail directed to the Corporation at its address for the purposes of
notices hereunder.
 
D-9

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11.           Miscellaneous.
 
11.1           If for any reason the Escrow Funds are not received by the Escrow
Agent as contemplated herein, the Corporation shall reimburse the Escrow Agent
for all expenses, including reasonable counsel fees and disbursements, paid or
incurred by it in making preparations for providing the services contemplated
hereby.
 
11.2           This Agreement shall be construed without regard to any
presumption or other rule requiring construction against the party causing such
instrument to be drafted.  The term “hereby”, “hereof”, “hereto”, “hereunder”
and any similar terms, as used in this Agreement, refer to the Agreement in its
entirety and not only to the particular portion of this Agreement where the term
is used.  The word “person” shall mean any natural person, partnership,
corporation, government or other form of business or legal entity.  All words or
terms used in this Agreement, regardless of the number or gender in which they
are used, shall be deemed to include any other number and any other gender as
the context may require.  This Agreement shall not be admissible in evidence to
construe the provisions of any prior agreement.  The rule of ejusdern generis
shall not be applicable herein to limit a general statement, which is followed
by or referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
 
11.3           This Agreement and the rights and obligations hereunder of the
Corporation may be assigned by the Corporation only to a successor to the
Corporation’s entire business.  This Agreement and the rights and obligations
hereunder of the Escrow Agent may be assigned by the Escrow Agent only to a
successor to its entire business.  This Agreement shall be binding upon and
insure to the benefit of each party’s respective successors, heirs and permitted
assigns.  No person, other than the participating broker-dealers, shall acquire
or have any rights under or by virtue of this Agreement.  This Agreement may not
be changed orally or modified, amended or supplemented without an express
written agreement executed by the Escrow Agent, the Corporation and each
participating broker-dealer.  Except as otherwise set forth herein, there are no
third-party beneficiaries.
 
D-10

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11.4           This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York.  The representations and
warranties contained in this Agreement shall survive the execution and delivery
hereof and any investigations made by any party.  The headings in this Agreement
are for purposes of reference only and shall not limit or otherwise affect any
of the terms hereof.
 
11.5           Each of the Recitals, exhibits and schedules attached hereto
shall be deemed a part of this Agreement.
 
12.             Execution in Counterparts.  This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument.  This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signature of all of the parties reflected hereon as the
signatures.
 
13.            Prior Agreement Superseded.   This Agreement supersedes in full
that certain Escrow Agreement between the Parties dated as of October 17,
2007.  This Agreement is full, final and exclusive agreement between the Parties
with respect to the subject matter hereof and all prior and contemporaneous
agreements or understandings, whether written or oral, are hereby merged into
this Agreement.
 
D-11

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13.
 
IN WITNESS WEREOF, the parties have executed and delivered this agreement on the
day and year first above written.
 

 
LEVY & BOONSHOFT, P.C.
           
By:
/s/ Peter Campitiello
     
Peter Campitiello, Partner
           
ENTERCONNECT, INC.
           
By:
/s/ Sam Jankovich
     
Name: Sam Jankovich
     
Title:    Chief Executive Officer
 

D-12

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Schedule A

 
The Escrow Agent is authorized to accept instructions signed or believed by the
Escrow Agent to be signed by any one of the following on behalf of EnterConnect,
Inc.

Name
True Signature
             
Sam Jankovich
/s/ Sam Jankovich
 
Title: Chief Executive Officer, President
   

D-13

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EXHIBIT-A

PARTICIPATING BROKER-DEALERS

Sandgrain Securities, Inc.
1050 Franklin Avenue, Suite 300
Garden City, New York 11530
Tel: 516-750-7800
Fax: 516-741-0390
Attn.: Peter Grassel

Wire transfer instructions

Bank:                         Chase Bank
Bank Address:         Stewart Avenue and Clinton Road, Garden City, NY 11530
ABA Number:          021000021
Beneficiary:              Sandgrain Securities, Inc.
Beneficiary Account Number:            6900823183
 
D-14

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EXHIBIT “E”
FINANCIALS

ENTERCONNECT INC.

INDEX TO FINANCIAL STATEMENTS
 
Contents
Page(s)
       
Balance Sheet as of June 30, 2007 (Unaudited)
E-2
   
Statements of Operations for the Period From November 13, 2006 (Inception)
through  June 30, 2007 (Unaudited) and for the Period From April 1, 2007 through
June 30, 2007 (Unaudited)
E-3
   
Statement of Stockholders’ Equity for the Period From November 13, 2006
(Inception) through June 30, 2007 (Unaudited)
E-4
   
Statements of Cash Flows for the Period From November 13, 2006 (Inception)
through  June 30, 2007 (Unaudited) and for the Period From April 1, 2007 through
June 30, 2007 (Unaudited)
E-5
   
Notes to Interim Financial Statements (Unaudited)
E-6
   
Report of Independent Registered Public Accounting Firm
E-8
   
Balance Sheet at March 31, 2007
E-9
   
Statement of Operations for the Period From November 13, 2006 (Inception)
through March 31, 2007
E-10
   
Statement of Stockholders’ Equity for the Period From November 13, 2006
(Inception) through March 31, 2007
E-11
   
Statement of Cash Flows for the Period From November 13, 2006 (Inception)
through March 31, 2007
E-12
   
Notes to the Financial Statements
E-13 to E-19

 
E-1

--------------------------------------------------------------------------------

 
ENTERCONNECT INC.
(A DEVELOPMENT STAGE COMPANY)
Balance Sheet
June 30, 2007
(Unaudited)

ASSETS

CURRENT ASSETS
     
Cash
  $
1,936
 
Accounts receivable
   
10,000
 
Prepaid expenses and other current assets
   
15,587
 
Total current assets
   
27,523
           
Equipment and software, net of accumulated depreciation of $8,576
   
46,688
 
Intangible assets, net of amortization of $100,000
   
900,000
 
Deposits
   
8,678
 
TOTAL ASSETS
  $
982,889
 

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     
Accounts payable
  $
219,473
 
Accrued expenses
   
139,600
 
Other current liabilities
   
71,000
 
Deferred revenue
   
20,000
 
Total current liabilities
   
450,073
           
STOCKHOLDERS' EQUITY
       
Preferred stock at $0.001 par value; 10,000,000 shares authorized; no shares
issued
   
-
 
Common stock at $0.001 par value; 100,000,000 shares authorized; 25,020,928
shares issued and outstanding
   
25,021
 
Additional Paid-in capital
   
4,144,176
 
Deferred Compensation
    (2,000,000 )
Accumulated deficit
    (1,636,381 )
Total Stockholders' Equity
   
532,816
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  $
982,889
 

See accompanying notes to the financial statements.
 
E-2

--------------------------------------------------------------------------------

 
ENTERCONNECT INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Operations
 (Unaudited)

   
Period From Inception (November 13, 2006) through June 30, 2007
   
Three Months Ended June 30, 2007
               
Revenue
  $
25,000
    $
25,000
                   
Cost of revenue
   
-
     
-
                   
Gross Margin
   
25,000
     
25,000
                   
Operating Expenses:
               
Selling and marketing
   
285,422
     
113,304
 
General and administrative
   
678,991
     
275,157
 
Research and development
   
487,791
     
256,149
 
Total Operating Expenses
   
1,452,204
     
644,610
                   
Operating loss
    (1,427,204 )     (619,610 )                  
Other Expenses:
               
Interest
   
209,177
     
-
 
Total Other Expenses
   
209,177
     
-
                   
Loss from operations before income taxes
    (1,636,381 )     (619,610 )                  
Income taxes
   
-
     
-
 
Net loss
  $ (1,636,381 )   $ (619,610 )
Loss per common share - basic and diluted
  $ (0.09 )   $ (0.03 )                  
Weighted average number of common shares outstanding - basic and diluted
   
18,947,791
     
20,711,514
 

See accompanying notes to the financial statements.
 
E-3

--------------------------------------------------------------------------------

 
ENTERCONNECT INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Stockholders’ Equity
For the Period From November 13, 2006 (Inception) through June 30, 2007
(Unaudited)
 

   
Common
Shares
   
Amount
   
Additional
Paid-in
Capital
   
Retained
Earnings
   
Total
                                                                 
Balance, November 13, 2006 (Inception)
   
-
    $
-
    $
-
    $
-
    $
-
                                                                               
     
Issuance of common stock for services
   
18,000,000
     
18,000
     
-
     
-
     
18,000
                                                                               
     
Issuance of warrants in connection with convertible notes
   
-
     
-
     
56,115
     
-
     
56,115
                                                                               
     
Issuance of common stock from conversion of notes (net of costs of $262,548)
   
2,266,112
     
2,266
     
1,987,160
     
-
     
1,989,426
                                           
Net loss
   
-
     
-
     
-
      (1,016,771 )     (1,016,771 )                                          
Balance, March 31, 2007
   
20,266,112
    $
20,266
    $
2,043,275
    $ (1,016,771 )   $
1,046,770
                                           
Issuance of common stock for services
   
4,754,816
     
4,755
     
2,100,901
     
-
     
2,105,656
                                           
Net loss
                            (619,610 )     (619,610 )                          
               
Balance, June 30, 2007
   
25,020,928
    $
25,021
    $
4,144,176
    $ (1,636,381 )   $
2,532,816
 

 
See accompanying notes to the financial statements.
 
E-4

--------------------------------------------------------------------------------

 
ENTERCONNECT INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Cash Flows
 (Unaudited)
 

   
Period From Inception (November 13, 2006) through June 30, 2007
   
Three Months Ended June 30, 2007
               
CASH FLOW FROM OPERATING ACTIVITIES:
           
Net loss
  $ (1,636,381 )   $ (619,610 )
Adjustments to reconcile net loss to net cash used in operating activities:
                                 
Depreciation and amortization
   
108,577
     
54,531
 
Non-cash interest expense
   
209,176
     
-
 
Non-cash compensation expense
   
123,655
     
105,655
 
Changes in assets and liabilities:
               
Increase in accounts receivable
    (10,000 )     (10,000 )
Increase in prepaid expenses
    (15,587 )    
25,616
 
Increase in deposits
    (8,678 )    
-
 
Increase in accounts payable
   
219,472
     
141,119
 
Increase in accrued expenses
   
139,600
     
99,379
 
Increase in deferred revenue
   
20,000
     
20,000
 
Net Cash Used in Operating Activities
    (850,166 )     (183,310 )                  
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Purchase of computer equipment
    (55,264 )    
-
 
Acquired Technology
    (1,000,000 )    
-
 
Net Cash Used in Investing Activities
    (1,055,264 )    
-
                   
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from issuance of convertible notes
   
1,836,366
     
-
 
Proceeds/(repayments) from short-term notes
   
71,000
     
71,000
 
Net Cash Provided by Financing Activities
   
1,907,366
     
71,000
                   
INCREASE IN CASH
   
1,936
      (112,310 )                  
CASH AT BEGINNING OF PERIOD
   
-
     
114,246
 
CASH AT END OF PERIOD
  $
1,936
    $
1,936
                   
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES:
               
Noncash financing and investing activities:
               
Issuance of Common Stock for deferred compensation
          $
2,000,000
 

 
See accompanying notes to the financial statements.
 
E-5

--------------------------------------------------------------------------------

 
ENTERCONNECT INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM NOVEMBER 13, 2006 (INCEPTION)
THROUGH JUNE 30, 2007
 
NOTE 1 -
NATURE OF OPERATIONS

 
 
Priority Software, Inc. was incorporated on November 13, 2006 under the laws of
the State of Nevada. On January 4, 2007, the stockholders approved an amendment
to the Certificate of Incorporation to change the name to EnterConnect Inc. (a
development stage company) (“EnterConnect”, or the “Company”).  The Company is
the developer of “EnterConnect,” a ‘business-ready’, enterprise-level
intranet/extranet solution that includes document management, web
content management, collaboration, search and security. EnterConnect is an
intranet/extranet tool enabling companies to deploy internal employee, division,
department, team portals and external customer, partner, and investor
portals while leveraging a scalable portal infrastructure to accomplish present
as well as future organizational requirements, initiatives and projects.

 
NOTE 2 -
BASIS OF PRESENTATION

 
The accompanying interim financial statements for the three month periods ended
June 30, 2007 and the period from November 13, 2006 (Inception) through June 30,
2007 are unaudited and include all adjustments (consisting of normal recurring
adjustments) considered necessary by management for a fair presentation.  The
results of operations realized during an interim period are not necessarily
indicative of results to be expected for a full year. These financial statements
should be read in conjunction with the information filed as part of the
Company’s Registration Statement on Form SB2, of which this Prospectus is a
part.

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements as well as the reported amount of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
 
NOTE 9 -
STOCKHOLDERS’ EQUITY

 
The Company is currently authorized to issue 100,000,000 shares of $0.001 par
value common stock and 10,000,000 shares of $0.001 par value preferred stock.

Common Stock
 
On June 19, 2007, the Company entered into a Memorandum of Understanding with
Global Media Fund, Inc. (“Global”) whereby Global agreed to distribute newspaper
features, radio features and other marketing media with an agreed-upon value of
$2,000,000 for 1,000,000 shares of the Company’s Common Stock.  The Company
agreed that if the market value of these shares is below $700,000, the Company
must issue Global an additional number of shares to equal $1,000,000 or Global
has the right to terminate the Agreement.
On June 29, 2007, the Company entered into Release and Settlement Agreements
with five of its key employees. The Company issued 3,375,816 shares of Common
Stock in consideration of the employees releasing the Company from any and all
claims, contracts, liabilities and suits.  The issuance of these shares was
exempt from registration pursuant to Section 4(2) of the Securities Act.
 
E-6

--------------------------------------------------------------------------------

 
NOTE 10 -
SUBSEQUENT EVENT

 
On July 31, 2007, the Company conducted a private placement of its securities
solely to accredited investors.  The offering was exempt from registration
pursuant to Regulation D of the Securities Act of 1933.  Subscriptions were for
units at a purchase price of $25,000 comprised of a 14% Debenture and 50,000
shares of the Company's Common Stock.  The Company executed subscriptions for
investments of $585,500 and issued a total of 1,171,000 shares of common stock
from 19 accredited investors.
 
E-7

--------------------------------------------------------------------------------

 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
EnterConnect Inc.
(A development stage company)
San Jose, California

We have audited the accompanying balance sheet of EnterConnect Inc. (a
development stage company) (“EnterConnect” or the "Company") as of March 31,
2007 and the related statements of operations, stockholders' equity and cash
flows for the period from November 13, 2006 (Inception) through March 31, 2007.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. An audit includes consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, based on our audit and the report of the other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of EnterConnect as of March 31, 2007, and the results of
its operations and its cash flows for the year period from November 13, 2006
(Inception) through March 31, 2007 in conformity with accounting principles
generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company had an accumulated deficit of $1,016,771 and
had a net loss and cash used in operations of $1,016,771 and $819,917 for the
period from November 13, 2006 (Inception) through March 31, 2007, respectively,
with no revenues. These conditions raise substantial doubt about its ability to
continue as a going concern. Management's plans in regards to these matters are
also described in Note 3. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

Skillman, New Jersey
May 23, 2007
 
E-8

--------------------------------------------------------------------------------

 
ENTERCONNECT INC.
(A DEVELOPMENT STAGE COMPANY)
Balance Sheet
March 31, 2007

ASSETS

CURRENT ASSETS
     
Cash
  $
114,246
 
Prepaid expenses and other current assets
   
41,203
 
Total Current Assets
   
155,449
           
Equipment and software, net of accumulated depreciation and  amortization of
$54,046
   
1,001,218
           
Deposits
   
8,678
 
TOTAL ASSETS
  $
1,165,345
 

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
     
Accounts payable
  $
78,353
 
Accrued expenses
   
40,221
 
Total Current Liabilities
   
118,574
           
STOCKHOLDERS’ EQUITY
       
Preferred stock at $0.001 par value; 10,000,000 shares authorized; no shares
issued or outstanding
   

-
 
Common stock at $0.001 par value; 100,000,000 shares authorized; 20,266,112
shares issued and outstanding
   

20,266
 
Additional Paid-in Capital
   
2,043,276
 
Accumulated deficit
    (1,016,771 )
Total Stockholders’ Equity
   
1,046,771
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  $
1,165,345
 

See accompanying notes to the financial statements.
 
E-9

--------------------------------------------------------------------------------

 
ENTERCONNECT INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Operations
For the Period from November 13, 2006 (Inception) Through March 31, 2007
 
Operating Expenses:
     
Selling and marketing
  $
172,118
 
General and administrative
   
403,834
 
Research and development
   
231,642
 
Total Operating Expenses
   
807,594
           
Operating loss
    (807,594 )          
Other Expenses:
       
Interest
   
209,177
 
Total Other Expense
   
209,177
 
Loss from operations before income taxes
    (1,016,771 )
Income taxes
   
-
 
Net loss
  $ (1,016,771 )
Loss per common share – basic and diluted
  $ (0.06 )          
Weighted average number of common shares outstanding – basic and diluted
   

18,016,303
 

 
See accompanying notes to the financial statements.

E-10

--------------------------------------------------------------------------------

 
ENTERCONNECT INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Stockholders’ Equity
For the Period from November 13, 2006 (Inception) Through March 31, 2007

   

Common Shares
   

Amount
   

Additional Paid-in Capital
   

Retained Earnings
   

Total
                                 
Balance, November 13, 2006 (Inception)
   
-
    $
-
    $
-
    $
-
    $
-
                                           
Issuance of common stock for services
   
18,000,000
     
18,000
     
-
     
-
     
18,000
 
Issuance of warrants in connection with convertible notes
   
-
     
-
     
56,115
     
-
     
56,115
 
Issuance of common stock from conversion of notes (net of costs of $262,548)
   
2,266,112
     
2,266
     
1,987,161
     
-
     
1,989,427
                                           
Net loss
   
-
     
-
     
-
      (1,016,771 )     (1,016,771 )                                          
Balance, March 31, 2007
   
20,266,112
    $
20,266
    $
2,043,276
    $ (1,016,771 )   $
1,046,771
 

 
See accompanying notes to the financial statements.
 
E-11

--------------------------------------------------------------------------------

 
ENTERCONNECT INC.
(A DEVELOPMENT STAGE COMPANY)
Statement of Cash Flows
 For the Period from November 13, 2006 (Inception) Through March 31, 2007
 
CASH FLOWS FROM OPERATING ACTIVITIES:
     
Net loss
  $ (1,016,771 )
Adjustments to reconcile net loss to net cash used in operating activities:
       
Depreciation
   
54,046
 
Common stock issued for services
   
18,000
 
Warrants issued for interest expense
   
56,115
 
Changes in assets and liabilities:
       
Increase in prepaid expenses
    (41,203 )
Increase in deposits
    (8,678 )
Increase in accounts payable
   
78,353
 
Increase in accrued expenses
   
40,221
 
Net Cash Used in Operating Activities
    (819,917 )          
CASH FLOWS FROM INVESTING ACTIVITIES:
       
Purchase of computer equipment
    (55,264 )
Acquired technology
    (1,000,000 )
Net Cash Used in Investing Activities
    (1,055,264 )          
CASH FLOWS FROM FINANCING ACTIVITIES
       
Proceeds from convertible debt, net of costs of $262,548
   
1,989,427
 
Net Cash Provided by Financing Activities
   
1,989,427
           
INCREASE IN CASH
   
114,246
           
CASH AT BEGINNING OF PERIOD
   
-
 
CASH AT END OF PERIOD
  $
114,246
           
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES:
       
Cash Paid For:
       
Income taxes
  $
-
           
Non-Cash Transaction
       
Common stock issued for convertible debt
  $
1,989,427
 

 
See accompanying notes to the financial statements.
 
E-12

--------------------------------------------------------------------------------

 
ENTERCONNECT INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD FROM NOVEMBER 13, 2006 (INCEPTION)
THROUGH MARCH 31, 2007
 
NOTE 1  -
NATURE OF OPERATIONS

 
Priority Software, Inc. was incorporated on November 13, 2006 under the laws of
the State of Nevada. On January 4, 2007, the stockholders approved an amendment
to the Certificate of Incorporation to change the name to EnterConnect Inc. (a
development stage company) (“EnterConnect”, or the “Company”).  The Company is
the developer of “EnterConnect,” a ‘business-ready’, enterprise-level
intranet/extranet solution that includes document management, web
content management, collaboration, search and security. EnterConnect is an
intranet/extranet tool enabling companies to deploy internal employee, division,
department, team portals and external customer, partner, and investor
portals while leveraging a scalable portal infrastructure to accomplish present
as well as future organizational requirements, initiatives and projects.

NOTE 2  -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 
a)        Development stage company
 
The Company is a development stage company as defined by Statement of Financial
Accounting Standards (“SFAS”) No. 7, Accounting and Reporting by Development
Stage Enterprises. All losses accumulated since inception have been considered
as part of the Company's development stage activities.
 
b)        Use of estimates
 
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reporting amounts of revenues and expenses during the reported period.
Significant estimates include the estimated useful lives of property and
equipment. Actual results could differ from those estimates.
 
c)         Cash and cash equivalents
 
The Company considers all highly liquid investments with maturities of three
months or less at the time of purchase to be cash equivalents.
 
d)        Computer equipment and software
 
Computer equipment and acquired software are recorded at cost.  Expenditures for
major additions and betterments are capitalized.  Maintenance and repairs are
charged to operations as incurred. Depreciation of computer equipment and
amortization of software are computed by the straight-line method (after taking
into account their respective estimated residual values) over the assets
estimated useful lives of three and five years, respectively. Upon sale or
retirement of computer equipment and software, the related cost and accumulated
depreciation are removed from the accounts and any gain or loss is reflected in
operations.
 
E-13

--------------------------------------------------------------------------------

 
e)        Impairment of long-lived assets
 
Long-lived assets, which include property and acquired technology, are reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of assets may not be recoverable or the useful life is shorter
than originally estimated.
 
The Company assesses the recoverability of its assets by comparing the projected
undiscounted net cash flows associated with the related asset or group of assets
over their remaining lives against their respective carrying amounts.
Impairment, if any, is based on the excess of the carrying amount over the fair
value of those assets. Fair value is generally determined using the asset’s
expected future discounted cash flows or market value, if readily determinable.
If assets are determined to be recoverable, but the useful lives are shorter
than originally estimated, the net book value of the assets is depreciated over
the newly determined remaining useful lives. At December 31, 2006, the Company
determined that there was no impairment based on management’s evaluation.
 
f)         Fair value of financial instruments
 
The fair value of a financial instrument is the amount at which the instrument
could be exchanged in a current transaction between willing parties.  The
carrying amounts of financial assets and liabilities, such as cash, prepayments,
accounts payable, and accrued expenses approximate their fair values because of
the short maturity of these instruments and market rates of interest.
 
g)        Income taxes
 
The Company follows Statement of Financial Accounting Standards No. 109 -
Accounting for Income Taxes, which requires recognition of deferred tax assets
and liabilities for the expected future tax consequences of events that have
been included in the financial statements or tax returns. Under this method,
deferred tax assets and liabilities are based on the differences between the
financial statement and tax bases of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to reverse.
Deferred tax assets are reduced by a valuation allowance to the extent
management concludes it is more likely than not that the assets will not be
realized. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in the
consolidated statements of operations in the period that includes the enactment
date.
 
h)        Net loss per common share
 
Net loss per common share is computed pursuant to SFAS No. 128, “Earnings Per
Share”.  Basic loss per share is computed by taking net loss divided by the
weighted average number of common shares outstanding for the period.  Diluted
loss per share is computed by dividing net loss by the weighted average number
of shares of common stock and potentially outstanding shares of common stock
during each period to reflect the potential dilution that could occur from
common shares issuable through stock options, warrants, and convertible debt. As
of March 31, 2007, 1,267,640 warrants were excluded from the diluted loss per
share computation, as their effect would be anti-dilutive.
 
E-14

--------------------------------------------------------------------------------

 
 i)        New accounting pronouncements
 
In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of
Financial Assets—an amendment of FASB Statement No. 140 (“SFAS No. 156”), that
provides guidance on accounting for separately recognized servicing assets and
servicing liabilities. In accordance with the provisions of SFAS No. 156,
separately recognized servicing assets and servicing liabilities must be
initially measured at fair value, if practicable. Subsequent to initial
recognition, the Company may use either the amortization method or the fair
value measurement method to account for servicing assets and servicing
liabilities within the scope of this Statement. The Company does not anticipate
that the adoption of this Statement to have a material effect on the Company’s
financial condition and results of operations.

In July 2006, the FASB issued FASB Interpretation Number 48, Accounting for
Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109 (“FIN
48”). FIN 48 prescribes a recognition threshold and measurement attribute for
the financial statement recognition and measurement of a tax position taken in a
tax return. The Company must determine whether it is “more-likely-than-not” that
a tax position will be sustained upon examination, including resolution of any
related appeals or litigation processes, based on the technical merits of the
position. Once it is determined that a position meets the more-likely-than-not
recognition threshold, the position is measured to determine the amount of
benefit to recognize in the financial statements. FIN 48 applies to all tax
positions related to income taxes subject to FASB Statement No. 109, Accounting
for Income Taxes. The interpretation clearly scopes out income tax positions
related to FASB Statement No. 5, Accounting for Contingencies. The Company will
adopt the provisions of this statement on July 1, 2007. The cumulative effect of
applying the provisions of FIN 48, if any, will be reported as an adjustment to
the opening balance of retained earnings on July 1, 2007. The Company does not
anticipate that the adoption of this statement will have a material effect on
the Company’s financial condition and results of operations.

On September 15, 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
("SFAS 157").  SFAS 157 defines fair value, establishes a framework for
measuring fair value and expands disclosures about fair value
measurements.  SFAS 157 is effective as of the beginning of the first fiscal
year beginning after November 15, 2007.  The Company does not anticipate that
the adoption of this statement will have a material effect on the Company’s
financial condition and results of operations.

In September 2006, FASB issued SFAS No. 158, Employers' Accounting for Defined
Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements
No 87, 88, 106 and 132(R)  (SFAS 158) .  SFAS 158 requires the recognition of
the overfunded or underfunded status of a defined benefit postretirement plan as
an asset or liability in the statement of financial position and the recognition
of changes in that funded status in the year in which the changes occur through
comprehensive income. SFAS 158 also requires the measurement of the funded
status of a plan as of the date of the year-end statement of financial position.
The Company does not anticipate that the adoption of this statement will have a
material effect on the Company’s financial condition and results of operations.
 
E-15

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On February 15, 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities: Including an amendment of FASB
Statement No. 115 (SFAS 159). SFAS 159 permits all entities to elect to measure
many financial instruments and certain other items at fair value with changes in
fair value reported in earnings. SFAS 159 is effective as of the beginning of
the first fiscal year that begins after November 15, 2007, with earlier adoption
permitted. The Company does not anticipate that the adoption of this statement
will have a material effect on the Company’s financial condition and results of
operations.

Management does not believe that any other recently issued, but not yet
effective accounting pronouncements, if adopted, would have a material effect on
the accompanying financial statements.
 
NOTE 3  -
DEVELOPMENT STAGE ACTIVITIES AND GOING CONCERN

 
The Company is currently in the development stage. The Company intends to enter
the enterprise-level intranet/extranet portal market by offering a value added
product and software-as-a-service.  Its activities as of March 31, 2007 have
been organizational and developmental.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates continuity of
operations, realization of assets, and liquidation of liabilities in the normal
course of business.  As reflected in the accompanying financial statements, the
Company had an accumulated deficit of $1,016,771, a net loss and net cash used
in operations of $1,016,771 and $819,917 for the period from November 13, 2006
(Inception) through March 31, 2007, respectively, with no revenues. These
conditions raise substantial doubt about its ability to continue as a going
concern.

While the Company is attempting to produce sufficient sales, the Company’s cash
position may not been sufficient to support the Company’s daily
operations.  Management intends to attempt to raise additional funds by way of a
public or private offering.  While the Company believes in the viability of its
strategy to produce sales volume and in its ability to raise additional funds,
there can be no assurances to that effect.        The ability of the Company to
continue as a going concern is dependent upon the Company’s ability to further
implement its business plan and generate sufficient revenues. The financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.  Management believes that the actions
presently being taken to further implement its business plan and generate
revenues provide the opportunity for the Company to continue as a going concern.
 
E-16

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NOTE 4  -
PREPAID EXPENSES AND OTHER CURRENT ASSETS

 
At March 31, 2007, prepaid expenses and other current assets consisted of the
following:

Prepaid expenses
 
$
34,203
 
Other receivables
   
7,000
 
Total
 
$
41,203
 

NOTE 5  -
EQUIPMENT AND SOFTWARE

 
At March 31, 2007, equipment and software consisted of the following:

Computer equipment
 
$
49,624
 
Software
   
1,005,640
       
1,055,264
 
Less: accumulated depreciation and amortization
   
(54,046
)
   
$
1,001,218
 

Depreciation and amortization expense for the period from November 13, 2006
(inception) through March 31, 2007 amounted to $54,046.
 
NOTE 6  -
CONVERTIBLE NOTES PAYABLE

 
From December 20, 2006, through February 28, 2007 the Company executed 10%
convertible debentures aggregating approximately $2,113,000 with forty-four (44)
individuals.  The holders are entitled, at their option, to convert the
debentures, plus accrued interest, into shares of the Company’s common stock at
$1.00 per share.  If not converted, the entire principal amount shall be due to
the holder on the five year anniversary of the debenture with interest to be
paid quarterly in cash or shares. In connection with the convertible debentures,
the Company issued to these individuals an aggregate of 1,267,641 warrants with
exercise prices of $2.00 per share on the first 422,547 warrants, $3.00 per
share on the second 422,547 warrants, and $4.00 per share on the final 422,546
warrants.  These warrants are exercisable for a period of three years from the
date of issuance. The fair value of the warrants issued using the Black-Scholes
Option Pricing Model was $36,960.  The Black-Scholes Option Pricing Model had
the following assumptions: Risk-free interest of 5.00%; Dividend yield 0.00%;
Volatility of 265.73% and a warrant life of five (5) years. At March 31, 2007
all convertible note holders converted their debentures plus accrued and bonus
interest into 2,266,112 shares of the Company’s common stock.
 
NOTE 7  -
INCOME TAXES

 
As of March 31, 2007, the Company had deferred tax assets of approximately
$340,000, resulting from temporary differences and net operating loss (“NOL”)
carry-forwards of approximately $1,000,000, which are available to offset future
taxable income, if any, through 2027. As utilization of the net operating loss
carry-forwards and temporary difference is not assured, the deferred tax asset
has been fully offset by a valuation allowance.
 
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The tax effects of temporary differences, loss carry-forwards and the valuation
allowance that give rise to deferred income tax assets at March 31, 2007 are as
follows:
 
Temporary differences:
 
 
 
 
Net operating losses and deferred expenses
 
$
340,000
 
Less valuation allowance
 
 
(340,000
)
Deferred tax assets
 
$
-
 
         
The reconciliation of the effective income tax rate to the federal statutory
rate for the period ended March 31, 2007 is as follows:
 
 
 
 
Federal income tax rate
 
 
34.0
%
Change in valuation allowance on net operating
 
 
 
 
loss carry-forwards
 
 
(34.0
)%
Effective income tax rate
 
 
0.0
%

 
NOTE 8  -
STOCKHOLDERS’ EQUITY

 
 
The Company is currently authorized to issue 100,000,000 shares of $0.001 par
value common stock and 10,000,000 shares of $0.001 par value preferred stock.

Common Stock
 
On November 13, 2006, the Company issued 9,000,000 shares of common stock to
each of its founders, Sam Jankovich and Private Capital Group, LLC.
(“PCG”)  These shares were recorded at their par value of $0.001 or $18,000.

The holders of the common stock are entitled to equal dividends and
distributions per share with respect to the common stock, when and if declared
by the Board of Directors, from funds legally available. No holder of any shares
of common stock has a preemptive right to subscribe for any shares of any class
of Company stock. Upon liquidation, dissolution or winding up, and after payment
to creditors and preferred stockholders, if any, assets will be divided pro-rata
on a share-for-share basis among the holders of the shares of common stock. Each
share of common stock is entitled to one vote with respect to the election of
any director or any other matter upon which stockholders are required or
permitted to vote. Holders of our common stock do not have cumulative voting
rights.

Preferred Stock
 
The Company’s Articles of Incorporation authorize the Board of Directors to
issue 10,000,000 shares of preferred stock from time to time in one or more
series. The Board of Directors is authorized to determine, prior to issuing any
such series of preferred stock and without any vote or action by the
shareholders, the rights, preferences, privileges and restrictions of the shares
of such series, including dividend rights, voting rights, terms of redemption,
the provisions of any purchase, retirement or sinking fund to be provided for
the shares of any series, conversion and exchange rights, the preferences upon
any distribution of the assets of the Company, including in the event of
voluntary or involuntary liquidation, dissolution or winding up of the Company,
and the preferences and relative rights among each series of preferred stock. At
September 17, 2007, the Company had no shares of preferred stock issued and
outstanding.
 
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Warrants
 
The Company has outstanding warrants to purchase 3,379,062 shares of its common
stock.  1,267,641 warrants are exercisable immediately to purchase 422,547
shares of Common Stock, at a price per share of $2.00, 422,547 shares of Common
Stock at a price per share of $3.00 and 422,547 shares of Common Stock at a
price per share of $4.00 and expire on the third anniversary of the date of
issuance.  Additional warrants to purchase 2,111,421 shares of Common Stock are
outstanding exercisable at $1.00 per share and expiring on the third anniversary
after issuance.
 
NOTE 9  -
COMMITMENTS

 
The Company has a non-cancelable lease for executive and general office space
through August 31, 2010, requiring minimum annual lease payments of
approximately $83,000, plus increases after September 1, 2008. In addition to
the minimum lease payments the Company is responsible for their share of
operating expenses, liability insurance and property insurance.

Future minimum payments required under non-cancelable lease agreement that have
initial or remaining service terms in excess of one year at March 31, 2007 were
as follows:

 
2008
$82,975
   
2009
$84,427
   
2010
$86,960
   
2011
$36,679
 

Rent expense for the period from November 13, 2006 (inception) through March 31,
2007 was approximately $13,000.
 
 
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