**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





________________________________








**FORM
      10-KSB**





**Annual
      Report Pursuant to Section 13 or 15(d) of**


**The
      Securities Exchange Act of 1934**





**For
                the Year Ended November 30, 2005**
            **Commission
                File No. 333-64244**





_____________________________





**The
                Macreport.net, Inc.**


(Exact
      Name of Registrant as Specified in Its Charter)





Delaware
            
            11-3584538(State
                of Incorporation)
            
            (I.R.S.
                Employer Identification No.)150
                Broadhollow Road, Suite PH11, Melville, New York
            
            11747(Address
                of principal executive offices)
              (631)
                423-4222
              Registrant’s
                Telephone Number
            
            (Zip
                Code)Securities
                registered pursuant to Section 12(b) of the Act:
              Common
                Stock, $0.0001 par value per share(Title
                of Class)





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months and (2) has been subject to such filing requirements for
      the
      past 90 days.   Yes  x  No   ̈




Indicate by check
      mark if disclosure of delinquent filers pursuant to Item 405 of Regulation
      S-K
      is not contained herein, and will not be contained, to the best of the
      registrant's knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-KSB or any amendment
      to
      this Form 10-KSB.   ̈




The
      aggregate market value of the voting stock held by non-affiliates of the
      Registrant as of February 15, 2006 was $1,313,921 using the closing bid price
      of
      $0.44 on February 15, 2006.




The
      number of shares of Common Stock outstanding as of February 15, 2006 was
      17,949,165.













**DOCUMENTS
      INCORPORATED BY REFERENCE:**






None.




A
      list of
      Exhibits to this Annual Report on Form 10-KSB begins on page __.














-1
          -


**THE
      MACREPORT.NET, INC.**


**2004
      FORM 10-KSB REPORT**





**TABLE
      OF CONTENTS**


PART
                I
            
            PageItem
                1
            Description
                of the Business
            2Item
                2
            Description
                of Property
            9Item
                3
            Legal
                Proceedings
            9Item
                4
            Submission
                of Matters to a Vote of Security Holders
            9PART
                IIItem
                5
            Market
                for Registrant's Common Equity and Related Stockholder Matters
            10Item
                6
            Management's
                Discussion and Analysis of Financial Condition and Results of
                Operations
            12Item
                7
            Financial
                Statements
            16Item
                8
            Changes
                in and Disagreements with Accountants on Accounting and Financial
                Disclosure
            16Item
                8A
            Controls
                and Procedures
            16Item
                8B
            Other
                Information
            16PART
                IIIItem
                9.
            Directors,
                Executive Officers, Promoters and Control Persons of the Registrant;
                Compliance with Section 16(a) of the Exchange Act
            17Item
                10.
            Executive
                Compensation
            18Item
                11.
            Security
                Ownership of Certain Beneficial Owners And Management and Related
                Stockholder Matters
            22Item
                12.
            Certain
                Relationships and Related Transactions
            23Item
                13.
            Exhibits
                and Reports On Form 8-K
            24Item
                14.
            Principal
                Accountant Fees and Services
            26




____________________




**Forward-Looking
      Statements**





Certain
      statements under the caption "Management's Discussion and Analysis of Financial
      Condition and Results of Operations" and elsewhere in this Annual Report
      constitute "forward-looking statements" within the meaning of the Private
      Securities Litigation Reform Act of 1995. Such forward-looking -2
            -
  statements
        involve known and unknown risks, uncertainties and other factors which may
        cause
        the actual results, performance or achievements of the Company, or industry
        results, to be materially different from any future results, performance,
        or
        achievements expressed or implied by such forward-looking statements. Such
        factors include, among others, the Company's ability to attract customers,
        general economic and business conditions with respect to the Internet and
        online
        commerce, its ability to generate revenues, changes in government regulations,
        competition and the ability of the Company to implement its business strategy
        and other risks discussed in this Form 10-KSB.




Forward-looking
      statements speak only as of the date of this Form 10-KSB. Moreover, whether
      or
      not stated in connection with a forward-looking statement, the Company
      undertakes no obligation to correct or update a forward-looking statement should
      the Company later become aware that it is not likely to be achieved. If the
      Company were to update or correct a forward-looking statement, investors and
      others should not conclude that the Company will make additional updates or
      corrections thereafter.




**PART
      I**




**ITEM
      1.**  **DESCRIPTION
      OF THE BUSINESS**




**Overview**




The
      MacReport.Net, Inc. was incorporated as a Delaware corporation in December
      2000.
      We commenced operations at such time. The Company is an internet information
      and
      media company formed to allow publicly and privately held companies to
      communicate relevant corporate information directly with the investing public.
      This is done through the use of a web site that provides the user with key
      information via management interviews, press releases, and other
      information.




Prior
      to
      the fourth quarter of fiscal 2004, our activities have been primarily devoted
      to
      business development, proof of concept activities, recruiting personnel and
      other start-up activities, however, recently, our revenues have grown
      substantially through sales of our services and products and the Company's
      focus
      has shifted to growing its customer base.




**General**




**The
      Macreport.net, Inc.**




We
      are an
      information and media company that provides a Web-based forum for public and
      private issuers to communicate corporate audio news content to the business,
      financial and investing community through our Web site, located at
      www.macreport.net. We have built a user friendly, highly effective Web site
      that
      aggregates and disseminates information from multiple sources.




Through
      content partnerships, we also provide Web-based financial information to
      professionals who need quick access to reliable corporate, industry and market
      intelligence. By visiting our website, users are able to access comprehensive
      and up-to-the minute business and financial information on public and private
      companies from several information providers drawing upon multiple sources
      of
      content. Our services enable timely, online access to a wide array of
      proprietary and partner content. These sources include both textual information,
      such as news, trade press, SEC filings, executive biographies and analyst
      reports, and numeric information, such as company financial results, stock
      quotes and industry statistics.




We
      expect
      that visitors to our Web site use our information for their professional
      endeavors, including financial and competitive research, as well as for their
      personal activities. We believe that we provide advertisers with a large,
      demographically desirable business audience. -3
            -




We
      market
      and sell package services to public and private companies. The packages range
      from merely exposure on our web site to a comprehensive service package,
      including press release services as well as client exposure on our website.
      Also, the Company purchases advertising pages from "Institutional Investor"
      magazine and, within these pages, highlights its clients and information
      regarding such client' business. The press release services can range from
      a set
      amount of client press releases per month to unlimited.




**Industry
      Background**




Providing
      information, tools and the opportunity to purchase products and services to
      financial professionals and business decision makers over the Internet
      represents a large and growing market opportunity. Increased Internet usage
      and
      the desire for information by financial professionals and the companies for
      which they work are driving growth in the market.




Recent
      industry growth has been driven by corporations and other enterprises
      recognizing that productivity and competitiveness depend on extensive knowledge
      of external information, including information about industries, customers,
      competitors, prospects, business trends, breaking news and market data. These
      organizations have already invested heavily in Internet connectivity and
      networked computing infrastructures to manage internal information. These
      organizations seek to leverage these infrastructures to access and manage
      external information. While the financial markets have been negatively affected
      over the past few years, we believe that these growth trends will not reverse.




The
      task
      of finding and using external information is often difficult and cumbersome.
      Traditional, textual sources such as newspapers and directories can require
      hours to search. A centralized library can be costly to establish and maintain
      and can be an inefficient and incomplete information source. While the emergence
      of the Web has greatly increased access to information, finding comprehensive,
      precise, up-to-date, relevant and reliable information on the Web can still
      be
      time-consuming and difficult. While other on-line services can be useful
      research tools in certain circumstances, most of these services currently focus
      on specific areas of content, such as financial data or news. They do not
      provide the full range of data required by professionals. In addition, most
      on-line services charge a fee for each search performed.




We
      believe that traditional sources, the Web and existing on-line services do
      not
      adequately meet the information needs of many professionals who want to compete
      effectively in today’s fast-paced, global, customer-focused marketplace. These
      professionals and their organizations demand external information that
      is:




easily
      accessible in a user-friendly format


comprehensive
      and includes both textual and numeric information


derived
      from multiple, high quality sources


integrated
      at a single site


delivered
      on a platform that allows interpretation, manipulation and analysis


delivered
      in a product easily implemented and supported on a corporate
      network




Additionally,
      we believe that many companies are looking for alternative service providers
      for
      such tasks as disseminating press releases. With our products, we offer a range
      of press release packages from a set amount of client press releases per month
      to unlimited for a monthly fee. We believe that many companies may benefit
      from
      this service as it is a fee per month and not a variable cost.




We
      remain
      very excited about the productization of our services. We believe that a market
      exists for these services and the bundling of such services as we keep the
      costs
      lower that our competitors. -4
            -
  **Strategy**




Our
      core
      strategy is to be a leading Web portal for financial professionals and business
      decision makers and worldwide provider of multimedia production and distribution
      services to corporations and other organizations. The key components of our
      growth strategy include:




*Grow
      Our Customer Base* .
      During
      the initial stages of our operation, we have focused on selling our streaming
      audio interviews, joint marketing ventures, and public relations and consulting
      services to public companies with securities trading on the Nasdaq SmallCap
      Market, the electronic over-the-counter bulletin board and Pink Sheets. We
      believe there is an opportunity for the packaging of our services into products
      which range from merely exposure on our web site to a comprehensive service
      package, including press release services as well as client exposure in
      "Institutional Investor" magazine. Furthermore, we believe that we can introduce
      other services into our products and offer client companies a full service
      line
      of services from press releases, edgar conversions, printing to financial and
      investor exposure.




Generally,
      our clients are charged a monthly fee for the service package that they request.
      These services may include:




posting
      of content relating to the client that is in addition to the posting of content
      that we typically offer without charge, which may include: statistics, financial
      information, reports, editorials, stories and/or articles relating to the client
      and prepared by the client or by third parties;


links
      to
      the client’s Web site and to a page or pages of our Web site dedicated to
      providing information about the client;


preparing
      and making available to our issuer clients one audio interview per year with
      representatives of the client and, at the option of our management, additional
      audios providing current newsworthy information about the client;


dissemination
      of press releases; and


coverage
      in our advertising pages within "Institutional Investor" magazine.




We
      also
      produce streaming audio and video profile presentations and textual profiles
      of
      corporations for free. These profiles and presentations are accessible through
      our Web site. We believe that by continually adding new companies and additional
      sources of information, we will be positioned to become the premier destination
      for CEO interviews.




*Grow
      Our Audience* .
      We
      believe that increasing our brand awareness and our exposure within the business
      community will contribute to our future success. To date, we have successfully
      built a brand name but plan on continuing to grow our audience by focusing
      on
      online and direct response advertising as well as public relations to raise
      awareness of our company and our services. Furthermore, we plan to partner
      with
      high-volume business and consumer Web sites.




*Increase
      Usage By Our Audience* .
      To
      increase usage, we plan to expand our content offering in the area of additional
      companies, industries, people and products during the upcoming fiscal year.
      Moreover, we have developed and are developing offline partnerships that will
      help to drive brand exposure and traffic to our site.




*Maximize
      Revenues From Users of our Website* .
      We plan
      to add e-commerce opportunities to our Web site in an effort to generate
      revenues from users of our Web site. More e-commerce partners will provide
      more
      buying opportunities on the site and we plan to integrate these in the search
      results and within other tools and content on the site. We also plan to increase
      the advertising revenue per user through customer-targeting capabilities on
      the
      site. -5
            -
  *Pursue
        Acquisitions and Strategic Alliances* .
        To
        further meet the needs of financial professionals and business decision makers
        worldwide, we intend to pursue acquisitions of, and strategic relationships
        with, companies with complementary services and technologies and to expand
        our
        information and services to cover more business organizations in international
        markets.




*Increase
      our Sales Staff* .
      As more
      companies look for online services to enhance productivity, we plan to increase
      our sales staff to gain a greater share of this growing market.




*Technology
      Advancement.* We
      plan
      to continuously advance and develop new technologies that will enhance the
      user
      experience. We intend to expand our technology services through ongoing
      investment, integration of new technologies, and through targeted acquisitions.




**Sales
      and Marketing**




Subscribers




Subscribers
      for our service packages will primarily be corporations that are publicly traded
      that require services such as press release and are concerned about exposure
      to
      the financial and investor community. We plan to attract additional subscribers
      through direct marketing efforts, media advertising and referrals.




Advertising
      and e-Commerce




We
      plan
      to offer a variety of advertising options that may be purchased individually
      or
      in packages. This may include banners and button advertisements on our site,
      which can be rotated on a run-of-site basis or targeted to a particular
      audience. Run-of-site advertisements appeal to advertisers seeking general
      brand
      recognition across our online audience. Banners and buttons are generally sold
      under short-term insertion orders based on a price per thousand impressions
      served.






We
      plan
      to generate e-commerce revenues from advertisers or sponsors that pay either
      a
      fee per transaction or a percentage of sales directly generated by their
      placement on our Web site. These fees can originate from buttons, banners or
      in-context text links within our site.




Licensing
      and Syndication




We
      plan
      to license and syndicate portions of our proprietary information and certain
      tools to third parties for redistribution. We believe potential customers will
      range from traditional online service providers to other Web sites. We plan
      to
      provide our customers with either a customized data feed of our proprietary
      company information, or a co-branded set of Web pages designed for the customer.
      License and syndication fees will be based upon variables, such as the amount
      of
      information and number of tools, the number of seats, the number of capsules
      viewed or the number of terminals.




Marketing
      Relationships




We
      plan
      to develop relationships with frequently visited and well-known Web sites in
      order to expand our audience. We plan to build customized versions of our
      company profiles to be co-branded and integrated into partners’ Web sites. A
      customized, co-branded company profile may feature links to portions of the
      other Web site as well as links back to our Web site for additional information.
      By incorporating links back to our Web site, we can introduce our information
      to
      a broader audience while displaying our free advertising-supported company
      information within the context of the other Web site.






Our
      marketing relationships will be important for increasing our brand awareness
      and
      attracting new visitors to our Web site. We will pursue relationships that
      increase the value of our brand name and introduce new audiences to our
      information. -6
            -
  **Competition**




Many
      Web
      sites compete for the attention and spending of financial professionals, and
      advertisers, particularly in the business information area. We expect this
      competition to continue to increase. We compete for subscribers, visitors,
      advertisers and content providers with many types of companies, such
      as:




large,
      well-established business and financial information providers such as Dow Jones,
      Dialog, Lexis-Nexis, Pearson, Reuters, Thomson, Primark and
      McGraw-Hill;


providers
      of company information, such as Dun & Bradstreet, MarketGuide, a division of
      Multex, and Standard & Poor’s;


on-line
      information services or Web sites targeted to specific markets or applications,
      such as NewsEdge, Factset and Bloomberg;


Web
      retrieval, Web “portal” companies and other free or low-cost mass market on-line
      services such as Excite, Infoseek, Lycos, Yahoo! and AOL/Netscape;


Web
      sites
      focused on subscription business models, such as The Wall Street Journal
      Interactive Edition;


free
      or
      low-cost specialized business and financial information Web sites such as
      Hoovers.com, Marketwatch.com, Multex.com, CEOcast.com and TheStreet.com;
      and


other
      Web
      sites with a business orientation or a business channel, such as Office.com
      and
      Business.com.




Our
      ability to compete depends on many factors, including:




the
      originality, timeliness, comprehensiveness and trustworthiness of our content
      and that of our competitors;


the
      cost
      of our services compared to our competitors;


the
      ease
      of use of services developed either by us or our competitors;


the
      usefulness of our tools;


the
      attractiveness of the demographic characteristics of our audience;
      and


the
      effectiveness of our sales and marketing efforts.





Subsidiaries


The
      Company incorporated Macnetworks, Inc., a Delaware corporation that is
      wholly-owned by the Company. In February 2004, Macnetworks was appointed as
      a
      General Partner for Van Pfeiffer, L.P., a New York limited partnership and
      hedge
      fund that primarily invests in private investments in public companies. For
      its
      services, Macnetworks will receive 1.5% of the net assets and 20% of profits,
      if
      any, of Van Pfeiffer. Macnetworks has not, as of November 30, 2005, received
      any
      compensation from Van Pfeiffer. Macnetworks has waived any fees that would
      otherwise be due from Van Pfeiffer for the last two fiscal years.





In
      2004,
      the Company incorporated The Marcellus Group, LLC, a New York limited liability
      company. As of November 20, 2005, The Marcellus Group purchased eight commercial
      building properties in Marcellus, New York for the purposes of office space
      for
      the Company. The buildings are currently being renovated for use by the Company.
      A certain portion of the property will be rented for retail commercial use.





In
      2004,
      the Company incorporated SpringBay Oil Company, Inc., a New York corporation.
      SpringBay Oil Company was formed in 2004 to develop a product that can be used
      in the production monitoring of oil wells. I n
      June
      2005, the Company formed Monolith Athletic Club, LLC, a New York limited
      liability company. -7
            -
   Monolith
        was formed to purchase a franchise and operate a professional soccer team
        in the
        Syracuse, New York area. Monolith has not as of the date of this report entered
        into an agreement in furtherance of its business plans. On June 29, 2005,
        Springbay Oil Company, Inc. merged with Monolith Athletic Club, LLC to form
        a
        new corporation, Monolith Athletic Club, Inc. The Company owns 71% of all
        of the
        issued and outstanding shares of Monolith Athletic Club, Inc





In
      February 2005, the Company
      incorporated JA Spa, LLC., a New York limited liability company. JA Spa, LLC
      was
      formed to develop a health spa concept within one of the properties owned by
      the
      Company in Marcellus, New York. The business plans for JA Spa, LLC are currently
      being prepared.





In
      February 2005, the Company sold 1,000,000 shares of its common stock to one
      individual for two million dollars ($2,000,000). The shares of common stock
      are
      restricted. The issuance of the securities in the transaction were deemed to
      be
      exempt from registration under the Securities Act of 1933, as amended, in
      reliance on Section 4(2) of the Securities Act and Regulation D promulgated
      thereunder as transactions by an issuer not involving any public
      offering.





In
      January 2005, the Company moved from one of its offices at 200 Broadhollow,
      Melville, New York to 150 Broadhollow, Suite PH11, Melville, New York. The
      Company leases its Melville office space pursuant to a lease expiring November
      2006, with minimum monthly rent of approximately $1,700, plus annual escalations
      of approximately 3%. The Company now has three (3) offices located at Melville,
      New York, Marcellus, New York and New York, New York.





**Registration
      Under the Investment Advisors Act**




To
      engage
      in certain components of our planned operations, we are required to register
      with the Securities and Exchange Commission as an investment advisor under
      the
      Investment Advisors Act of 1940, as amended. As an investment adviser, we will
      be subject to restrictions against engaging in fraudulent, deceptive or
      manipulative acts or practices. We will be subject to remedial sanctions,
      including censure, limitations on our operations, suspension for a period not
      exceeding 12 months, and revocation for, among other things, willfully violating
      or aiding or abetting a violation of the Securities Act, the Exchange Act,
      the
      Investment Company Act, the Investment Advisers Act or any rule or regulation
      adopted pursuant to any of such acts.




We
      have
      filed with NASD Regulation entitlement forms for access to the Investment
      Advisor Registration Depository (IARD) and have established an IARD User
      Account. We have delayed the filing of Form ADV as our business model has been
      modified and the components of our plans that require registration have not
      been
      implemented and are not an integral part of our operations. However, until
      such
      time as we file Form ADV, we will not be able to commence certain of our planned
      operations. The requirement to register as an investment advisor with the
      Securities and Exchange Commission will cause us to incur additional costs
      and
      expenses, will result in delays in certain operations and the execution of
      certain plans.




**Government
      Regulation**




We
      are
      subject, both directly and indirectly, to various laws and governmental
      regulations relating to our business. There are currently few laws or
      regulations directly applicable to commercial online services or the Internet.
      However, due to increasing popularity and use of commercial online services
      and
      the Internet, it is possible that a number of laws and regulations may be
      adopted with respect to commercial online services and the Internet. These
      laws
      and regulations may cover issues including, for example, user privacy, pricing
      and characteristics, and quality of products and services. Moreover, the
      applicability to commercial online services and the Internet of existing laws
      governing issues including, for example, property ownership, libel and personal
      privacy, is uncertain and could expose us to substantial liability. Any new
      legislation or regulation or the application of existing laws and regulations
      to
      the Internet could have a material and adverse effect on our business, results
      or operations and financial condition. In certain states, legislation has been
      introduced to tax the sales of goods over the Internet the same as sales of
      personal property through traditional channels. -8
            -
  As
        our
        services are available over the Internet anywhere in the world, multiple
        jurisdictions may claim that we are required to qualify to do business as
        a
        foreign corporation in each of those jurisdictions. Our failure to qualify
        as a
        foreign corporation in a jurisdiction where we are required to do so could
        subject us to taxes and penalties for the failure to qualify. It is possible
        that state and foreign governments might also attempt to regulate our
        transmissions of content on our Web site or on the Web sites of others or
        prosecute us for violations of their laws. We cannot assure you that violations
        of local laws will not be alleged or charged by state or foreign governments,
        that we might not unintentionally violate these laws or that these laws will
        not
        be modified, or new laws enacted, in the future.




We
      are
      aware of the sensitive regulatory climate in which we plan to operate. In March
      2000, the Securities and Exchange Commission announced that it had a special
      operation to target fraudulent and manipulative practices relating to the
      promotion of securities on the Internet. We are also aware that Regulation
      F-D,
      adopted by the Securities and Exchange Commission during 2000, somewhat
      restricts the ability to obtain information from issuers.




Part
      of
      our business will include posting profiles of private and public issuers. We
      may
      be subject to liability under the Securities Act of 1933 and/or the Securities
      Exchange Act of 1934, each as amended, in the event that these issuers commence
      a public or private offering of their securities. In particular, with respect
      to
      private issuers relying on certain exemptions from the registration requirements
      of the Securities Act, the information we post on our Web site about issuers
      that engage in a private offering may be deemed to be a public offer of
      securities. Similarly, with respect to issuers that intend to commence a public
      offering of their securities, information that we post on our Web site about
      these issuers may be deemed to be a prospectus. To avoid making public offerings
      of securities that are intended to be privately placed and to avoid information
      about public issuers posted on our Web site being deemed a “prospectus” with
      respect to issuers that are engaging in a public offering, before engaging
      our
      services, issuers will be required to represent to us in their engagement
      agreement with us that, prior to engaging in any public or private offering,
      they will advise us of such intention. Further, such issuer will acknowledge
      in
      the engagement agreement that any information regarding an issuer will be
      removed from the Company’s Web site prior to such issuer commencing any
      offering.




Management
      expects to observe regulatory/compliance standards, however, we cannot assure
      you that we will avoid regulatory inquiries, the costs of responding to
      regulatory inquiries, or the imposition of sanctions, fines or other penalties
      which it may incur.




**Intellectual
      Property**




Our
      proprietary database of company information is copyrighted. To protect our
      rights to intellectual property, we rely on a combination of copyright law,
      trademark, trade secret protection, confidentiality agreements and other
      contractual arrangements with our customers and strategic partners. The
      protective steps we have taken may be inadequate to deter misappropriation
      of
      our proprietary information. We may be unable to detect the unauthorized use
      of,
      or take appropriate steps to enforce, our intellectual property rights. We
      have
      registered a number of our trademarks in the United States, and we have pending
      U.S. applications for other trademarks. Effective trademark, copyright and
      trade
      secret protection may not be available in every country in which we offer or
      intend to offer our services. In addition, although we believe that our
      proprietary rights do not infringe on the intellectual property rights of
      others, other parties may assert infringement claims against us or claim that
      we
      have violated a patent or infringed a copyright, trademark or other proprietary
      right belonging to them. These claims, even if not meritorious, could result
      in
      the expenditure of significant financial and managerial resources on our part,
      which could materially and adversely affect our business, results of operations
      and financial condition. We incorporate licensed third-party technology in
      some
      of our services. In these license agreements, the licensors have generally
      agreed to defend, indemnify and hold us harmless with respect to any claim
      by a
      third party that the licensed software infringes any patent or other proprietary
      right. We cannot assure you that these provisions will be adequate to protect
      us
      from infringement claims. The loss or inability to obtain or maintain any of
      these technology licenses could result in delays in the introduction of new
      services. -9
            -
  **Employees**




As
      of the
      date of this Form 10KSB, we have 20 full time employees and 20 part time
      employees. All employees are retained pursuant to agreements that can be
      terminated by us at-will. As we continue to grow and execute our strategic
      plan,
      we expect to hire additional personnel, particularly in the areas of sales
      and
      marketing, product development and technology. None of our staff is represented
      by a labor union. We believe that our relationship with our employees is good.
      Competition for qualified personnel in our industry is intense.




**ITEM
      2.**  **DESCRIPTION
      OF PROPERTY**




Our
      corporate headquarters are located in an approximately 1600 square foot
      rented facility in Melville, New York, under a lease expiring November 2006,
      with minimum monthly rent of approximately $1,700, plus annual escalations
      of
      approximately 3%. We also lease an approximately 2,200 square foot office
      and executive residential facility in New York, New York under a month
      to month lease with minimum monthly rent of $5,800.





We
      believe our present office space is suitable for our current operations. Total
      rental expense approximated
      $113,000 and $184,000 for the years ended November 30, 2005 and 2004,
      respectively.




As
      of
      November 30, 2005, The Marcellus Group has purchased eight commercial building
      properties in Marcellus, New York. The Company uses these buildings for office,
      as well as for retail commercial use. Renovations are currently taking place
      on
      several of the buildings.





**ITEM
      3.**  **LEGAL
      PROCEEDINGS**




The
      Company is involved in various legal proceedings and claims incident to the
      normal conduct of its business. The Company believes that such legal proceedings
      and claims, individually and in the aggregate, are not likely to have a material
      adverse effect on its financial position or results of operations.





**ITEM
      4.**  **SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS**




During
      the fourth quarter of the year ended November 30, 2005, no matters were
      submitted by the Company to a vote of its stockholders. -10
            -
  **PART
        II**




**ITEM
      5.**  **MARKET
      FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS**




The
      Company’s Common Stock currently trades under the symbol “MRPT.”




As
      of
      November 30, 2005, there were 17,949,165 s hares
      of
      common stock issued and outstanding and no shares of preferred stock issued
      or
      outstanding.





Since
      July 2, 2002, the Company's Common Stock has traded on the over-the-counter
      electronic bulletin board. The price ranges presented below represent the
      highest and lowest quoted bid prices during each quarter for 2004 and 2003
      reported by Nasdaq. The quotes represent prices between dealers and do not
      reflect mark-ups, markdowns or commissions and therefore may not necessarily
      represent actual transactions.




**Common
      Stock**




Year
              
              Period
              Bid
                  InformationHigh
              Low2005
              1stQuarter
              $1.00
              $0.372ndQuarter
              $1.05
              $0.303rdQuarter
              $0.75
              $0.354thQuarter
              $0.70
              $0.402004
              1stQuarter
              $0.65
              $0.312ndQuarter
              $0.65
              $0.323rdQuarter
              $1.01
              $0.374thQuarter
              $0.90
              $0.55







As
      reported by the Nasdaq OTC Bulletin Board, on February 15, 2006 the closing
      bid
      price of the Common Stock was $0.44 per share.




Holders


As
      of
      February 15, 2006, there were approximately 320 holders of record of the
      Company's common stock as determined from the Company’s transfer agent’s list.
      Such list does not include beneficial owners of securities whose shares are
      held
      in the names of various dealers and clearing agencies.


-11
            -
  Dividends


The
      Company has never declared nor paid any cash dividends on its common stock
      and
      does not anticipate paying dividends in respect of its common stock in the
      foreseeable future. Any payment of cash dividends in the future will be at
      the
      discretion of the Company’s Board of Directors and will depend upon, among other
      things, its earnings (if any), financial condition, cash flows, capital
      requirements and other relevant considerations, including applicable contractual
      restrictions and governmental regulations with respect to the payment of
      dividends.





Conversions
      - Settlement of Convertible Promissory Notes





In
      November 2005, the Company converted a convertible promissory note with a
      maturity date of May 30, 2004 into 656,124 shares of common stock of the Company
      pursuant to a conversion agreement wherein the holder of the note agreed to:
      (i)
      convert the notes into shares of common stock of the Company at a conversion
      price which is $1.00 less than the conversion price set forth in the respective
      notes ($2.50); and (ii) not sell or transfer the shares received in conversion
      of the notes for a period of one (1) year from the date of such
      conversion.





In
      November 2004, the Company converted five (5) convertible promissory notes
      dated
      October 2002 - April 2003 (aggregate principal amount of $45,000) into 16,213
      shares of common stock of the Company pursuant to a conversion agreement wherein
      the holders of such notes have agreed to: (i) convert the notes into shares
      of
      common stock of the Company at a conversion price which is $0.05 less than
      the
      conversion price set forth in the respective notes ($2.50 - $3.50); and (ii)
      not
      sell or transfer the shares received in conversion of the notes for a period
      of
      one (1) year from the date of such conversion.


In
      October 2004, the Company entered into a settlement agreement with respect
      to
      one (1) convertible promissory note dated April 2003 (principal amount of
      $10,000) to an employee of the Company wherein the Company paid $10,000 to
      the
      employee - noteholder in complete satisfaction of the Company's obligations
      with
      respect to such convertible promissory note.





**Recent
      Sales of Unregistered Securities**





In
      February 2005, the Company sold 1,000,000 shares of its common stock to one
      individual for two million dollars ($2,000,000). The shares of common stock
      are
      restricted. The issuance of the securities in the transaction were deemed to
      be
      exempt from registration under the Securities Act of 1933, as amended, in
      reliance on Section 4(2) of the Securities Act and Regulation D promulgated
      thereunder as transactions by an issuer not involving any public
      offering.


In
      November 2004, the Company converted five (5) convertible promissory notes
      dated
      October 2002 - April 2003 (aggregate principal amount of $45,000) into 16,213
      shares of common stock of the Company pursuant to a conversion agreement wherein
      the holders of such notes have agreed to: (i) convert the notes into shares
      of
      common stock of the Company at a conversion price which is $0.05 less than
      the
      conversion price set forth in the respective notes ($2.50 - $3.50); and (ii)
      not
      sell or transfer the shares received in conversion of the notes for a period
      of
      one (1) year from the date of such conversion.


The
      issuance of the securities in the transactions described above were deemed
      to be
      exempt from registration under the Securities Act of 1933, as amended, in
      reliance on Section 4(2) of the Securities Act and Regulation D promulgated
      thereunder as transactions by an issuer not involving any public
      offering.


-12
            -


**Debt**




In
      October 2004, Marcellus Group, LLC, the Company's wholly owned subsidiary,
      borrowed one million dollars ($1,000,000) from Crown Mill Restoration
      Development LLC, a New York limited liability company wholly owned by V. William
      Lucchetti, Jr., the Company's Chief Executive Officer, Chairman of the Board
      of
      Directors and 92% shareholder of the Company, whereby Marcellus Group, LLC
      pursuant to a promissory note. The terms of the promissory note provide that
      interest accrues at a rate of eight percent (8%) and the principal and interest
      is payable as follows: (i) monthly installments of $25,946.98
      (representing accrued interest and $500,000 of principal) up to and including November
      1, 2006; and (ii) $500,000 payment due on November 1, 2006.





Convertible
      notes payable


During
      March, April and May 2003, pursuant to a loan restructuring of the $100,000
      February 28, 2003 six month promissory note, the $100,000 January 14, 2002
      120-day promissory note (as amended), the $100,000 November 16, 2001 60-day
      promissory note (as amended), and other notes (as included below) with an
      aggregate principal amount of $97,997, the Company received an additional
      $355,000 from the holder of the notes who is also a shareholder of the Company.
      Pursuant to the restructuring, the Company issued this shareholder (the holder
      of the notes) a convertible promissory note with an aggregate principal amount
      of $752,997 plus interest accrued pursuant to the terminated notes. In addition,
      pursuant to the loan restructuring, the holder of the note is entitled to be
      issued warrants to purchase common stock of the Company in an amount to be
      agreed upon between the Company and such holder. The convertible note bears
      interest at a rate of 8% per annum with a maturity date of May 30, 2004.
      Pursuant to the terms of the convertible note, prior to May 30, 2004, we may
      convert the balance due together with accrued interest into shares of common
      stock. The conversion ratio is 2.50. Each of the prior notes, the $100,000
      February 28, 2003 six month promissory note, the $100,000 January 14, 2002
      10-day promissory note (as amended), the $100,000 November 16, 2001 60-day
      promissory note (as amended), and the other notes with an aggregate principal
      amount of $97,997, have been cancelled. As
      of
      November 30, 2005, the note was converted into shares of common stock of the
      Company.





Convertible
      promissory notes totaling $119,980 bear interest at a rate of 8% per annum
      with
      maturity dates that have expired. Pursuant to the terms of the convertible
      notes, if the Company does not prepay the notes prior to their expiration,
      on
      the expiration date, the Company may convert the balance due together with
      accrued interest into shares of the Company's common stock. The conversion
      ratio
      for these notes is the greater of : (i) the amount that is equal to the product
      of the closing bid price per share for the Common Stock, as reported on the
      over-the-counter electronic bulletin board, or such other public market that
      the
      Company’s Common Stock is then traded and seventy-five percent (75%); and (ii)
      3.50. The Company is currently in negotiations with these note holders with
      respect to the conversion of notes into common stock and expects to convert
      the
      notes within 30 days.









**ITEM
      6**  **MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATION**




The
      following discussion should be read in conjunction with the financial statements
      contained in Item 8 of Part IV of this Form 10-KSB.


-13
            -
  **Introduction
        and Nature of Business**




Our
      core
      strategy is to be a leading Web portal for financial professionals and business
      decision makers and worldwide provider of multimedia production and distribution
      services to corporations and other organizations. Our revenues have been
      generated from the sale of package services to public and private companies.
      The
      packages range from merely exposure on our web site to a comprehensive service
      package, including press release services and in certain cases, client exposure
      in "Institutional Investor" magazine.


**Selected
      Financial Data**


Year
      Ended November 30,


RESULTS
      OF OPERATIONS:  2005  2004





RESULTS
        OF OPERATIONS:  2005  2004
 
 Total
                  revenues
              $1,639,027
              $2,122,069Net
                  (loss) income
              $
                  (1,831,265)
              $
                  1,244,997Net
                  (loss) income attributable to common stockholders
                
                Basic
                  (loss) income per common share
                Diluted
                  (loss) income per common share
              $
                  (1,831,265)
                
                $(0.11)
                $(0.11)
              $
                  1,244,997
                
                $0.08
                $0.07Weighted
                  average common shares outstanding, Basic
                Weighted
                  average common shares outstanding, Diluted
              17,159,379
                17,159,379
              16,285,948
                16,646,362YEAR-END
                  FINANCIAL POSITION:Working
                  capital deficit
              $
                  1,115,165Total
                  assets
              $
                  3,061,838Total
                  liabilities
              $
                  2,147,093Stockholders’
                  equity
              $ 914,745







**Year
      Ended November 30, 2005, as compared to the year ended November 30,
      2004**




*Overall
      Financial Situation* .
      The
      Company had revenues of $1,639,027 for the fiscal year ended November 30, 2005,
      a decrease of $483,012 or 23% from the fiscal year ended November 30, 2004.
      The
      Company's revenues consisted mainly of the selling of the packages of its
      services. The Company has cost of revenues of $555,114 for the fiscal year
      ended
      November 30, 2005, an increase of $224,953 or 68% from the fiscal year ended
      November 30, 2004. The Company's cost of revenues includes the costs and
      expenses of its vendors and subcontractors that provide services on behalf
      of
      the Company in connection with its packages of services. The Company had a
      stockholders' equity at November 30, 2005 in the amount of $914,745, an increase
      of $1,118,076 from the stockholders' deficiency at November 30, 2004 of
      $(203,331). This change is primarily due to the sale of stock in the amount
      of
      $2,000,000 for the fiscal year ended November 30, 2005. Selling general and
      administrative expenses increased from the fiscal year ended November 30, 2004
      by $748,919 or 67% resulting in loss from operations of $(1,831,265) for the
      fiscal year ended November 30, 2005. These expenses consist primarily of
      employee salaries, professional fees and other corporate expenses, including
      business development and general legal activities. Interest expense increased
      by
      $47,938 for the fiscal year ended November 30, 2005 from $95,988 for the fiscal
      year ended November 30, 2004 primarily due to loans incurred in the acquisitions
      of properties. The Company had an unrealized gain on marketable securities
      of
      $125,891 for the fiscal year ended November 30, 2005. This gain is primarily
      a
      result of the Company's receipt of restricted stock in lieu of payment in cash
      for certain of its services. The Company had a net rental loss of ($635,510) for
      the
      fiscal year ended November 30, 2005 . **** The
      net
      rental loss is primarily due to the gross salaries of the employees of Marcellus
      Group of $422,000. A significant portion of this payroll is for employees
      involved in the renovation of the company's buildings.


-14
            -
  **Summary
        of Critical Accounting Policies; Significant Judgments and
        Estimates**




Our
      discussion and analysis of our financial condition and results of operations
      are
      based upon our Consolidated Financial Statements, which have been prepared
      in
      accordance with accounting principles generally accepted in the United States.
      The preparation of these financial statements requires us to make
      significant estimates and judgments that affect the reported amounts of assets,
      liabilities, revenues and expenses, and related disclosure of contingent assets
      and liabilities. These items are regularly monitored and analyzed by management
      for changes in facts and circumstances, and material changes in these estimates
      could occur in the future. Changes in estimates are recorded in the period
      in
      which they become known. We base our estimates on historical experience and
      various other assumptions that we believe to be reasonable under the
      circumstances. Actual results may differ from our estimates if past experience
      or other assumptions do not turn out to be substantially accurate.




A
      summary
      of those accounting policies that we believe are most critical to fully
      understanding and evaluating our financial results is set forth below. This
      summary should be read in conjunction with our Consolidated Financial Statements
      and the related Notes included elsewhere in this Annual Report.





*Revenue
      Recognition and Allowance for Doubtful Accounts.* Revenues
      from fee-based contracts with terms greater than one month are recognized
      ratably over the life of the contract. Advertising revenues are recognized
      over
      the period of the related ad.





If
      we do
      not accurately estimate the resources required or the scope of work to be
      performed for a contract or we do not manage the project properly within the
      planned time period, then we may recognize a loss on the contract. Provisions
      for estimated losses on uncompleted contracts are made on a contract-by-contract
      basis and are recognized in the period in which such losses are determined.
      We
      have committed unanticipated additional resources to complete projects in the
      past, which has resulted in lower than anticipated profitability or losses
      on
      those contracts. We expect that we will experience similar situations in the
      future. In addition, we may fix the price for some projects at an early stage
      of
      the process, which could result in a fixed price that turns out to be too low
      and, therefore, could adversely affect our business, financial condition and
      results of operations.





In
      some
      instances, we provided services to clients in exchange for equity instruments
      of
      the client. We measure the fair value of the equity instrument on the date
      the
      parties come to a mutual understanding of the terms of the arrangement and
      a
      commitment for performance by us to earn the equity instruments is reached,
      or
      when the equity is earned, whichever occurs earlier. -15
            -
  **Liquidity
        and Capital Resources**




In
      February 2005, the Company sold 1,000,000 shares of its common stock to one
      individual for two million dollars ($2,000,000). The shares of common stock
      are
      restricted. The issuance of the securities in the transaction were deemed to
      be
      exempt from registration under the Securities Act of 1933, as amended, in
      reliance on Section 4(2) of the Securities Act and Regulation D promulgated
      thereunder as transactions by an issuer not involving any public
      offering.





In
      October 2004, Marcellus Group, LLC, the Company's wholly owned subsidiary,
      borrowed one million dollars ($1,000,000) from Crown Mill Restoration
      Development LLC, a New York limited liability company wholly owned by V. William
      Lucchetti, Jr., the Company's Chief Executive Officer, Chairman of the Board
      of
      Directors and 92% shareholder of the Company, whereby Marcellus Group, LLC
      pursuant to a promissory note. The terms of the promissory note provide that
      interest accrues at a rate of eight percent (8%) and the principal and interest
      is payable as follows: (i) monthly installments of $25,946.98
      (representing accrued interest and $500,000 of principal) up to and including November
      1, 2006; and (ii) $500,000 payment due on November 1, 2006.





During
      March, April and May 2003, pursuant to a loan restructuring of the $100,000
      February 28, 2003 six month promissory note, the $100,000 January 14, 2002
      120-day promissory note (as amended), the $100,000 November 16, 2001 60-day
      promissory note (as amended), and other notes (as included below) with an
      aggregate principal amount of $97,997, the Company received an additional
      $355,000 from the holder of the notes who is also a shareholder of the Company.
      Pursuant to the restructuring, the Company issued this shareholder (the holder
      of the notes) a convertible promissory note with an aggregate principal amount
      of $752,997 plus interest accrued pursuant to the terminated notes. In addition,
      pursuant to the loan restructuring, the holder of the note is entitled to be
      issued warrants to purchase common stock of the Company in an amount to be
      agreed upon between the Company and such holder. The convertible note bears
      interest at a rate of 8% per annum with a maturity date of May 30, 2004.
      Pursuant to the terms of the convertible note, prior to May 30, 2004, we may
      convert the balance due together with accrued interest into shares of common
      stock. The conversion ratio is 2.50. Each of the prior notes, the $100,000
      February 28, 2003 six month promissory note, the $100,000 January 14, 2002
      10-day promissory note (as amended), the $100,000 November 16, 2001 60-day
      promissory n ote
      (as
      amended), and the other notes with an aggregate principal amount of $97,997,
      have been cancelled. As of November 30, 2005, the note was converted into shares
      of common stock of the Company.





Convertible
      promissory notes totaling $119,980 bear interest at a rate of 8% per annum
      with
      maturity dates that have expired. Pursuant to the terms of the convertible
      notes, if the Company does not prepay the notes prior to their expiration,
      the
      Company may convert the balance due together with accrued interest into shares
      of the Company's common stock. The conversion ratio for these notes is the
      greater of : (i) the amount that is equal to the product of the closing bid
      price per share for the Common Stock, as reported on the over-the-counter
      electronic bulletin board, or such other public market that the Company’s Common
      Stock is then traded and seventy-five percent (75%); and (ii) 3.50. The Company
      is currently in negotiations with these note holders with respect to the
      conversion of notes into common stock and expects to convert the notes within
      90
      days.





As
      of
      November 30, 2005, we
      had
      $32,694 in cash and cash equivalents.


-16
            -
  **Current
        and Future Financing Needs**




We
      have
      spent, and expect to continue to spend, substantial amounts in connection with
      growing our customer base. We have 20 full time employees and 20 part time
      employees. We do not engage any consultants.




Based
      on
      our current plans, we believe that our cash and cash equivalents and cash flows
      (from increasing revenues) will be sufficient to enable us to meet our planned
      operating needs. However, the actual amount of funds we may need to operate
      is
      subject to many factors, some of which are beyond our control.




These
      factors include the following:




costs
      associated with any acquisitions targets;


costs
      associated with marketing our services; and


our
      ability to grow our customer base and retain our current customers.


We
      have
      based our belief of not requiring any additional funds on assumptions that
      may
      prove to be wrong.




**Inflation**




Since
      the
      inception of the Company in December 2000, the rate of inflation has remained
      low and the cost of the Company's operations has not been significantly affected
      by inflationary trends in the economy.




**ITEM
      7.**  **FINANCIAL
      STATEMENTS**




The
      report of the Company's Independent Auditors, the Company’s financial statements
      and notes to financial statements appear herein commencing on
      Page F-1.




**ITEM
      8.**  **CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
      FINANCIAL**




None





ITEM
      8A.  **CONTROLS
      AND PROCEDURES**





(a)  Evaluation
      of disclosure controls and procedures.





As
      of the
      end of the period covered by this report, the Macreport carried out an
      evaluation, under the supervision and with the participation of the its Chief
      Executive Officer/Chief Financial Officer, of the effectiveness of the
      Macreport’s disclosure controls and procedures. Disclosure controls and
      procedures are designed to ensure that information required to be disclosed
      in
      the periodic reports filed or submitted under the Securities and Exchange Act
      of
      1934 is recorded, processed, summarized and reported within the time periods
      specified in the Securities and Exchange Commission’s rules and forms. Based
      upon that evaluation, the Chief Executive Officer/Chief Financial Officer
      concluded that the Macreport’s disclosure controls and procedures are effective
      in alerting them on a timely basis to material information relating to the
      Macreport.net required to be included in the Macreport’s reports filed or
      submitted under the Exchange Act.




(b)  Changes
      in internal controls. -17
            -
  There
        were no significant changes in the Macreport's internal controls or in other
        factors that could significantly affect these controls subsequent to the
        date of
        their evaluation, including any corrective actions with regard to significant
        deficiencies and material weaknesses.





In
      accordance with the requirements of Section 13 or 15(d) of the Exchange Act,
      the
      registrant has caused this report to be signed on its behalf by the undersigned,
      thereunto duly authorized.





ITEM
      8B.  OTHER
      INFORMATION





N one









-18
          -


**PART
      III**




**ITEM
      9.**  **DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF THE REGISTRANT; AND
      MANAGEMENT AND RELATED STOCKHOLDER MATTERS**




The
      following table sets forth information, as of December 31, 2005, concerning
      each director and executive officer of the Company.




Name
            Age
            Positions
                with
              the
                Company
            Position
                Held SinceV.
                William Lucchetti, Jr.
            40
            Chairman
                of the Board of Directors, Chief Executive Officer and
                President
            2000Adam
                J. Reznikoff
            34
            Vice
                President-North American Sales and Director
            2000Kenneth
                T. Hutchinson
            54
            Director
            2003





The
      business address for each of our officers and directors is 150 Broadhollow
      Road,
      Suite PH11, Melville, New York 11747.




The
      following sets forth the business experience of each director, executive
      officer, including principal occupations, at present and for at least the past
      five years.




*V.
      William Lucchetti, Jr.* Mr.
      Lucchetti has been our Chairman, Chief Executive Officer and President since
      our
      inception in December 2000. Also, since August 1999, Mr. Lucchetti has served
      as
      the Chief Executive Officer, President and a director of Michael Adams
      Consulting, Inc. From August 1998 to April 1999, Mr. Lucchetti served as the
      Vice President-Sales, Recruiting and Training of Kirlin Securities, Inc.




*Adam
      J. Reznikoff* Mr.
      Reznikoff has been our Vice President-North American Sales and a director since
      our inception in December 2000. From May 2000 to November 2000, Mr. Reznikoff
      served as the Vice President Marketing and Sales for Michael Adams Consulting,
      Inc. From August 1998 to May 2000, Mr. Reznikoff was an Account Executive at
      Kirlin Securities, Inc.




*Kenneth
      T. Hutchinson* Mr.
      Hutchinson has been a director since July 2003. Mr. Hutchinson is a Vice
      President of Finance at National Australia Bank (since June 2003). Mr.
      Hutchinson also was employed by National Australia Bank as an Associate Vice
      President of Finance & Compliance from March 1997 to June 2001. From
      February 2003 to May 2003, Mr. Hutchinson was President of TH Consulting Group,
      Inc., a financial consulting concern. From July 2001 to February 2002, Mr.
      Hutchinson was a Senior Banking Consultant with Temenos USA Inc.





The
      Company's directors are elected for a period of one year and until their
      successors are duly elected and qualified. There are currently three members
      of
      the Board of Directors. During July 2003, James Favia resigned as a member
      of
      the Board of Directors due to personal reasons. On July 16, 2003, the Company
      appointed Kenneth T. Hutchinson to serve as a non-executive member of the board
      of directors of Company and chairman of the audit committee.


-19
            -
  To
        the
        knowledge of management of the Company, except as set forth above, no director
        of the Company holds any directorship in any other company with a class of
        securities registered pursuant to Section 12, or subject to the requirements
        of
        Section 15(d), of the Securities Exchange Act of 1934 or in any company
        registered as an investment company under the Investment Company Act of
        1940.




**Compliance
      with Section 16(a) of the Securities Exchange Act of 1934**




Section
      16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s
      executive officers, directors and persons who own more than ten percent of
      a
      registered class of the Company’s equity securities to file certain reports
      regarding ownership of, and transactions in, the Company’s securities with the
      Securities and Exchange Commission (the “SEC”). These officers, directors and
      stockholders are also required by SEC rules to furnish the Company with copies
      of all Section 16(a) reports that are filed with the SEC. Based solely on a
      review of copies of such forms received by the Company, and written
      representations received by the Company from certain reporting persons, the
      Company believes that for the year ended November 30, 2005 all Section 16(a)
      reports required to be filed by the Company’s executive officers, directors and
      10% stockholders were filed on a timely basis.




**ITEM
      10.**  **EXECUTIVE
      COMPENSATION**




The
      following table summarizes all compensation earned by or paid to the Company's
      Chief Executive Officer for services rendered in all capacities to the Company
      for the period beginning on December 13, 2000 (Inception) to November 30,
      2005 and all officers who earned over $100,000 (the “Named Executive Officers”).
      One of our executive officers was compensated in excess of $100,000 when
      advances of expenses are included as set forth below.


-20
            -
  **SUMMARY
        COMPENSATION TABLE**






**Annual
                  Compensation**
              
              **Long-Term**
                **Compensation****Name
                  and Principal Position**
              **Year**
              **Salary
                  ($)**
              **Bonus
                  ($)**
              **Other
                  Annual**
                **Compensation
                  ($)**
              
              **Securities**
                **Underlying**
                **Options/SARs(#)**V.
                  Willam Lucchetti, Jr.
                Chairman,
                  President, Chief Executive and Operating Officer and
                  Treasurer
              2005
                2004
                2003
                2002
                2001
              $21,808
                —
                $35,534
                $31,846
                __
              —
                —
                —
                —
                —
              $261,5441
                $234,8341
                $155,7571
                $68,3002
                —
              
              —
                —
                —
                —
                —Adam
                  J. Reznikoff
                Secretary
                  and
                Director
              2005
                2004
                2003
                2002
                2001
              $75,000
                $78,130
                $39,594
                $17,423
                $28,770
              —
                —
                __
                __
                __
              $19,0101
                —
                —
                —
                __
              
              —
                —
                __
                __
                __


__________________


1 Advance
      of expenses of Officers paid by the Company.


2 Compensation
      paid to Michael Adam Consulting, Inc. which is wholly owned by Mr.
      Lucchetti.





We
      have
      not granted any stock options to the named executive officer. None of our
      employees are employed pursuant to employment agreements.





**Director’s
      Compensation**




Directors
      who are not employees of the Company are compensated at a rate of $1,000 for
      each meeting of the full Board of Directors which they attend in person, up
      to a
      maximum of $5,000 in any one year, plus expenses for attending such meetings.
      Officers are appointed annually by the Board of Directors and serve at the
      discretion of the Board.




**OPTIONS/SAR
      GRANTS IN 2004**




There
      were no option grants 2005.




**AGGREGATE
      OPTION EXERCISES IN 2004 AND**


**2004
      FISCAL YEAR-END OPTION VALUES**




There
      were no option exercises in 2005.




**Compensation
      Committee Interlocks and Insider Participation**




The
      Board
      of Directors of the Company does not have a compensation committee or audit
      committee. The Board of Directors determines executive compensation, based
      on
      corporate performance and market conditions. -21
            -


**Employment
      Agreements**




The
      Company has employment agreements with each employee of the Company that sets
      forth confidentiality obligations and intellectual property ownership. Pursuant
      to each of the employment agreements, each employee is an employee at will
      which
      may be terminated by the Company at any time for any reason.




**Stock
      Option Plan**




In
      April
      2001, we adopted the 2001 Stock Option Plan, referred to as the 2001 Plan.
      The
      2001 Plan will expire in April 2011, unless terminated earlier by our board
      of
      directors at their discretion. The 2001 Plan provides for the grant of options
      to purchase shares of our common stock, including:




incentive
      stock options, as defined by Section 422 of the Internal Revenue Code, that
      may
      be granted solely to employees, including officers,


non-qualified
      stock options, being stock options other than incentive stock options, that
      may
      be granted to employees, including officers, and


non-employee
      directors and individuals with whom we have consulting agreements.




*Share
      Reserve* .
      We
      authorized the issuance of 1,000,000 shares of our common stock pursuant to
      the
      2001 Plan. As of November 30, 2005, we have not granted any options under the
      2001 Plan. Shares subject to awards under the 2001 Plan that have expired or
      otherwise terminated without having been exercised in full again become
      available for the grant of awards under the 2001 Plan. Shares issued under
      the
      2001 Plan may be previously unissued shares or reacquired shares of common
      stock.




*Awards* .
      Stock
      options may be granted under the 2001 Plan to our employees, non-employee
      directors and individuals with whom we have consulting agreements. The stock
      options granted will be either incentive stock options or non-qualified stock
      options.




An
      incentive stock option is a stock option that has met the requirements of
      Section 422 of the Internal Revenue Code and, except as set forth below, must
      be
      granted with an exercise price of at least 100% of the fair market value at
      the
      date of grant.




No
      incentive stock option, and, prior to our stock being publicly traded, no
      non-qualified stock option, may be granted to any person, who, at the time
      of
      the grant, owns or is deemed to own stock possessing more than 10% of the total
      combined voting power of our company or any affiliate, unless the following
      conditions are satisfied:




the
      option exercise price must be at least 110% of the fair market value of the
      stock subject to the option on the date of grant; and


the
      term
      of any incentive stock option award must not exceed five years from the date
      of
      grant.




*Plan
      Administration* .
      The
      2001 Plan is administered by our board of directors. Our board of directors
      interprets all questions relating to the 2001 Plan and its decisions are final
      and binding on all participants. Any determination by a majority of the members
      of the board of directors at any meeting, or by written consent in lieu of
      a
      meeting, shall be deemed to have been made by the whole board of directors.
      Under the 2001 Plan, the board of directors may, at any time or from time to
      time, appoint a committee of at least two members of the board of directors
      and
      delegate to the committee the authority of the board of directors to administer
      the 2001 Plan. Upon such appointment and delegation, such committee shall have
      all the powers, privileges and duties of the board of directors, and shall
      be
      substituted for the board of directors, in the administration of the 2001 Plan,
      subject to certain limitations. -22
            -
  *Term
        of Awards* .
        In
        general, the term of stock options granted under the 2001 Plan is ten years.
        In
        the event an awardee’s service relationship with us ends, other than upon the
        awardee’s death or disability, the award may be exercised within a period of 90
        days following termination, provided that the award has already vested. If
        the
        awardee’s termination of service is for cause, such period will not exceed
        thirty days. Any award not already vested, or not exercised within these
        periods
        shall terminate. If the awardee dies, any vested award may be exercised within
        the time period specified in the award agreement, being at least six months,
        or
        if no time is specified, twelvemonths.




*Payment
      of Exercise Price* .
      Awardees may pay the exercise price of their awards, if any, as determined
      by
      the compensation committee, and acceptable consideration includes cash, checks,
      and promissory notes. Generally, an option holder may not transfer a stock
      option to any entity other than a spouse or descendants or to a trust, or other
      entity owned by such a trust, for the primary benefit of the option holder,
      his
      spouse and/or his descendants.




*Option
      Adjustments* .
      The
      aggregate number and class of shares as to which options may be granted under
      the 2001 Plan, the number and class shares covered by each outstanding option
      and the exercise price per share of each outstanding option, but not the total
      price, and all such options, shall each be proportionately adjusted for any
      increase decrease in the number of issued common stock resulting from split-up,
      spin-off or consolidation of shares or any like capital adjustment or the
      payment of any stock dividend. Generally, any option granted shall terminate
      in
      the event of a merger, consolidation, acquisition of property or stock,
      separation, reorganization or liquidation. However, the optionee shall have
      the
      right immediately prior to any such transaction to exercise his or her option
      in
      whole or in part.




*Additional
      Provisions* .
      The
      board of directors may, in their sole discretion, include additional provisions
      in any option or award granted or made under the 2001 Plan that are not
      inconsistent with the 2001 Plan or applicable law. The board of directors may
      also, in its sole discretion, accelerate or extend the date or dates on which
      all or any particular award or awards granted under the 2001 Plan may be
      exercised.




**Limitation
      of Liability and Indemnification Matters**




Article
      eighth of our certificate of incorporation provides that the personal liability
      of our directors will be eliminated to the fullest extent permitted by the
      provisions of paragraph (7) of subsection (b) of § 102 of the
      General Corporation Law of the State of Delaware, as the same may be amended
      and
      supplemented. Article sixth of our certificate of incorporation provides that
      we
      will, to the fullest extent permitted by the provisions of the General
      Corporation Law of the State of Delaware, indemnify all persons whom we may
      indemnify under such provisions. The indemnification provided by this section
      shall not limit or exclude any rights, indemnities or limitations of liability
      to which any person may be entitled, whether as a matter of law, under our
      bylaws, by agreement, vote of our stockholders or disinterested directors,
      or
      otherwise. Except as specifically required by the General Corporation Law of
      the
      State of Delaware, as the same exists or may be amended, none of our directors
      of will be liable to us or our stockholders for monetary damages for breach
      of
      his or her fiduciary duty as a director. No amendment to or repeal of this
      provision of our certificate of incorporation will apply to or have any effect
      on the liability or alleged liability of any director for or with respect to
      any
      acts or omissions of that director occurring prior to the amendment or
      repeal.




Under
      Section 145 of the Delaware General Corporation Law, we have the power, under
      certain circumstances, to indemnify any person who was or is a party or is
      threatened to be made a party to any threatened, pending or contemplated action,
      suit or proceeding, whether civil, criminal, administrative or investigative,
      by
      reason of the fact that he is or was a director, officer, employee or agent
      of
      ours, or is or was serving at our request as a director, officer, employee
      or
      agent of another corporation, partnership, joint venture, trust or other
      enterprise against expenses, including attorneys’ fees, and judgments against,
      fines and amounts paid in settlement actually and reasonably incurred by him
      in
      connection with the action, suit or proceeding. -23
            -
  Insofar
        as indemnification for liabilities arising under the Securities Act of 1933
        may
        be permitted to directors, officers, or persons controlling us pursuant to
        the
        foregoing provisions, we have been informed that, in the opinion of the SEC,
        that type of indemnification is against public policy as expressed in the
        Act
        and is therefore unenforceable.




There
      is
      no pending litigation or proceeding involving any of our directors or officers
      as to which indemnification is being sought, nor are we aware of any pending
      or
      threatened litigation that may result in claims for indemnification by any
      director or officer.




**ITEM
      11.**  **SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND**




**MANAGEMENT
      AND RELATED STOCKHOLDER MATTERS**




The
      following table sets forth certain information known to us with respect to
      the
      beneficial ownership of our common stock as of November 30, 2005 by:





all
      persons who are beneficial owners of five percent (5%) or more of our common
      stock;


each
      of
      our directors;


each
      of
      our executive officers; and


all
      current directors and executive officers as a group.




Except
      as
      otherwise indicated, and subject to applicable community property laws, the
      persons named in the table below have sole voting and investment power with
      respect to all shares of common stock held by them.




Applicable
      percentage ownership in the following ta ble
      is
      based on 17,949,165 shares
      of
      common stock outstanding as of November 30, 2005. -24
            -
  Beneficial
        ownership is determined in accordance with the rules of the SEC. No shares
        of
        common stock of the Company are subject to options held by any
        persons.




**Name
                and Address of Beneficial Holder**
            **Number
                of Shares**
            **Approximate****Percentage
                of Class**V.
                William Lucchetti, Jr.
              c/o
                The Macreport.net, Inc.
              150
                Broadhollow Road
              Melville,
                New York 11747
            14,962,980
            83%Adam
                J. Reznikoff
              c/o
                The Macreport.net, Inc.
              150
                Broadhollow Road
              Melville,
                New York 11747
            3⁄4
            3⁄4Kenneth
                T. Hutchinson
              c/o
                The Macreport.net, Inc.
              150
                Broadhollow Road
              Melville,
                New York 11747
            3⁄4
            3⁄4All
                executive officers and directors as a group (3 persons)
            14,962,980
            83%


________________________




**ITEM
      12.**  **CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS**




In
      October 2004, Marcellus Group, LLC, the Company's wholly owned subsidiary,
      borrowed one million dollars ($1,000,000) from Crown Mill Restoration
      Development LLC, a New York limited liability company wholly owned by V. William
      Lucchetti, Jr., the Company's Chief Executive Officer, Chairman of the Board
      of
      Directors and 92% shareholder of the Company, whereby Marcellus Group, LLC
      pursuant to a promissory note. The terms of the promissory note provide that
      interest accrues at a rate of eight percent (8%) and the principal and interest
      is payable as follows: (i) monthly installments of $25,946.98
      (representing accrued interest and $500,000 of principal) up to and including November
      1, 2006; and (ii) $500,000 payment due on November 1, 2006.




We
      lease
      an executive residence and office facility for $5,800 in monthly rent. The
      lease
      is on a month-to-month term. Mr. Lucchetti has the exclusive personal use
      of the executive residence facility at no cost. The lease cost associated with
      the executive residence is not included as compensation to Mr.
      Lucchetti.




We
      believe that all of the transactions discussed above were made on terms no
      less
      favorable to us than could have been obtained from unaffiliated third parties.




-25
          -


**ITEM
      13. EXHIBITS AND REPORTS ON FORM 8-K**




:
              The
                  following exhibits of the Company are filed herewith, unless otherwise
                  indicated**Exhibit**
              
              
              **Incorporated
                  by****Number**
              **Description**
              **Filed
                  Herewith**
              **Reference
                  to**3.1
              Certificate
                  of Incorporation
              
              The
                  Registrant’s Registration Statement on Form SB-2 (No.
                  333-64244)3.2
              By-laws
              
              The
                  Registrant’s Registration Statement on Form SB-2 (No.
                  333-64244)4.1
              Specimen
                  common stock certificate
              
              The
                  Registrant’s Registration Statement on Form SB-2 (No.
                  333-64244)4.2
              2001
                  Stock Option Plan
              
              The
                  Registrant’s Registration Statement on Form SB-2 (No.
                  333-64244)5.1
              Opinion
                  of Stephen J. Czarnik, Esq.
              
              The
                  Registrant’s Registration Statement on Form SB-2 (No.
                  333-64244)10.1
              Consulting
                  Agreement, dated January 1, 2001, between Michael Adams Consulting,
                  Inc.
              
              The
                  Registrant’s Registration Statement on Form SB-2 (No.
                  333-64244)10.2
              Office
                  Service Agreement, dated July 7, 2000, with VANTAS Long Island,
                  LLC
              
              The
                  Registrant’s Registration Statement on Form SB-2 (No.
                  333-64244)10.3
              Lease,
                  dated March 30, 2001, with 25 Broad Street LLC
              
              The
                  Registrant’s Registration Statement on Form SB-2 (No.
                  333-64244)10.4
              Form
                  of Subscription Agreement executed by investors in the private
                  offering or
                  our common stock that closed on May 15, 2001
              
              The
                  Registrant’s Registration Statement on Form SB-2 (No.
                  333-64244)10.5
              Promissory
                  Note issued to Sherman Winski November 16, 2001
              
              The
                  Registrant’s Registration Statement on Form SB-2 (No.
                  333-64244)10.6
              Amended
                  and Restated Promissory Note issued to Sherman Winski January 8,
                  2002
              
              The
                  Registrant’s Registration Statement on Form SB-2 (No.
                  333-64244)
  -26
            -
  
 10.7
                Promissory
                    Note issued to Sherman Winski dated January 14, 2002
                
                The
                    Registrant’s Registration Statement on Form SB-2 (No.
                    333-64244)10.8
                Form
                    of Convertible Promissory Note (May 2002)
                
                The
                    Registrant’s Quarterly Report on Form 10-QSB for the quarter ended May 31,
                    200210.9
                Office
                    Service Agreement, dated as of January 1, 2003, with HQ Global
                    Workplaces
                
                The
                    Registrant’s Annual Report on Form 10-KSB for the year ended November 30,
                    200210.10
                Form
                    of Convertible Promissory Note (September - November 2002)
                
                The
                    Registrant’s Annual Report on Form 10-KSB for the year ended November 30,
                    200210.11
                Form
                    of Convertible Promissory Note (November 2002)
                
                The
                    Registrant’s Annual Report on Form 10-KSB for the year ended November 30,
                    200210.12
                Form
                    of Convertible Promissory Note (July 2002)
                
                The
                    Registrant’s Annual Report on Form 10-KSB for the year ended November 30,
                    200210.13
                Form
                    of Convertible Promissory Note (June 2002)
                
                The
                    Registrant’s Annual Report on Form 10-KSB for the year ended November 30,
                    200210.14
                Amendment
                    No. 1 to the Amended and Restated Promissory Note issued to Sherman
                    Winski
                    dated March 9, 2002
                
                The
                    Registrant’s Annual Report on Form 10-KSB for the year ended November 30,
                    200210.15
                Amendment
                    No. 2 to the Amended and Restated Promissory Note issued to Sherman
                    Winski
                    dated September 9, 2002
                
                The
                    Registrant’s Annual Report on Form 10-KSB for the year ended November 30,
                    200210.16
                Amendment
                    No. 3 to the Amended and Restated Promissory Note issued to Sherman
                    Winski
                    dated November 14, 2002
                
                The
                    Registrant’s Annual Report on Form 10-KSB for the year ended November 30,
                    200210.17
                Amendment
                    No. 1 to the Promissory Note issued to Sherman Winski dated April
                    10,
                    2002
                
                The
                    Registrant’s Annual Report on Form 10-KSB for the year ended November 30,
                    200210.18
                Amendment
                    No. 2 to the Promissory Note issued to Sherman Winski dated September
                    9,
                    2002
                
                The
                    Registrant’s Annual Report on Form 10-KSB for the year ended November 30,
                    200210.19
                Amendment
                    No. 3 to the Promissory Note issued to Sherman Winski dated January
                    10,
                    2003
                
                The
                    Registrant’s Annual Report on Form 10-KSB for the year ended November 30,
                    200210.20
                Promissory
                    Note issued to Crown Mill Development LLC
                
                The
                    Registrant’s Annual Report on Form 10-KSB for the year ended November 30,
                    2004
  -27
            -
 
 14.1
                Code
                    of Ethics
                
                The
                    Registrant’s Annual Report on Form 10-KSB for the year ended November 30,
                    200316.1
                Letter
                    from Capraro Centofranchi Kramer & Co.
                
                The
                    Registrant’s Current Report on Form 8-KA dated January 21,
                    200321.1
                Subsidiaries
                *23.1
                Consent
                    of Capraro Centofranchi Kramer & Co., P.C.
                
                The
                    Registrant’s Registration Statement on Form SB-2 (No.
                    333-64244)23.2
                Consent
                    of Stephen J. Czarnik, Esq. (included in Exhibit 5.1
                    hereof)
                
                The
                    Registrant’s Registration Statement on Form SB-2 (No.
                    333-64244)24.1
                Power
                    of attorney
                
                The
                    Registrant’s Registration Statement on Form SB-2 (No.
                    333-64244)31.1.
                Certification
                    of V. William Lucchetti pursuant to Rule 13-14(a) and Item 307
                    of
                    Regulation SB
                *32.1
                Certification
                    by V. William Lucchetti Pursuant to the 18 U.S.C. Section 1350,
                    as Adopted
                    Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                *




_______________________


*Filed
      herewith.





**ITEM
      14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**





Aggregate
      fees for professional services rendered for us by Holtz Rubens tein
      Reminick, LLP, for fiscal years ended November 30, 2005 and 2004, are set forth
      below. The aggr egate
      fees included in the Audit category are fees billed for the fiscal years for
      the
      audit of our annual financial statements and review of financial statements
      and
      statutory and regulatory filings or engagements. The aggregate fees included
      in
      each of the other categories are billed in the fiscal years.





FISCAL
                YEAR 2005
            
            FISCAL
                YEAR 2004AUDIT
                FEES
            
            $
            $50,000
            
            $
            $45,000AUDIT-RELATED
                FEES
            
            $
            -
            
            $
            -TAX
                FEES
            
            $
            -
            
            $
            -ALL
                OTHER FEES
            
            $
            -
            
            $
            -TOTAL
            
            $
            $50,000
            
            $
            $45,000





Audit
      fees for the fiscal years ended November 30, 2005 and 2004, were for
      professional services rendered for the audits of the consolidated financial
      statements of the Company, quarterly review of the financial statements included
      in Quarterly Reports on Form 10-QSB, and other assistance required to complete
      the year end audit of the consolidated financial statements.





As
      we do
      not have a formal audit committee (see end of Item 9 above), the services
      described above were not approved by the audit committee under the de minimus
      exception provided by Rule 2-01(c)(7)(i)(C) under Regulation S-X. Further,
      as we
      do not have a formal audit committee, we do not have audit committee
      pre-approval policies and procedures.


-28
          -


**SIGNATURES**




In
      accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
      the
      Registrant has duly caused this report to be signed on its behalf by the
      undersigned, thereunto duly authorized, on March 17, 2006.




**THE
                MACREPORT.NET, INC.**
              
              
              By:/s/
                V. William Lucchetti, Jr.
              V.
                William Lucchetti, Jr.
              Chairman,
                Chief Executive Officer and
              President










In
      accordance with the requirements of the Securities Act of 1933, this
      registration statement was signed by the following persons in the capacities
      and
      on the dates stated.




/s/
                V. William Lucchetti, Jr.
              
              
              V.
                William Lucchetti, Jr.
            Chairman,
                Chief Executive Officer and President
              
              
              (Principal
                Executive Officer and Principal Accounting and Financial
                Officer)
            March
                17, 2006/s/
                Adam J. Reznikoff
              
              Adam
                J. Reznikoff
            Vice
                President-North American Sales and Director
            March
                17, 2006/s/Kenneth
                T. Hutchinson
              
              Kenneth
                T. Hutchinson
            Director
            March
                17, 2006





-29
            -




**Index
      to Consolidated Financial Statements**








PageA.
                Report of Independent Registered Public Accounting
            F-1B.
                Consolidated Balance Sheet for the year ended November 30,
                2005
            F-2C.
                Consolidated Statements of Operations for the years ended November
                30,
                2005 and 2004
            F-3D.
                Consolidated Statement of Stockholders’ Equity for the year ended
                November 30, 2005
            F-4E.
                Consolidated Statements of Cash Flows for the years ended November
                30,
                2005 and 2004
            F-5F.
                Notes to Consolidated Financial Statements
            F-6
                to F-__





-30
          -


Report
      of Independent Registered Public Accounting Firm








To
      the
      Board of Directors and Stockholders of


The
      Macreport.Net, Inc.


Melville,
      New York





We
      have
      audited the accompanying consolidated balance sheet of The Macreport.Net, Inc.
      and Subsidiaries, as of November 30, 2005, and the related consolidated
      statements of operations, stockholders' deficiency and cash flows for the years
      ended November 30, 2005 and 2004. These consolidated financial statements are
      the responsibility of the Company's management. Our responsibility is to express
      an opinion on these consolidated financial statements based on our
      audit.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States of America.) Those standards require
      that we plan and perform the audits to obtain reasonable assurance about whether
      the financial statements are free of material misstatement. 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
      audits provide a reasonable basis for our opinion.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the financial position of The Macreport.Net, Inc.
      and
      Subsidiaries as of November 30, 2005 and the results of their operations and
      their cash flows for the years ended November 30, 2005 and 2004 in conformity
      with accounting principles generally accepted in the United States of
      America.





The
      accompanying consolidated financial statements have been prepared assuming
      that
      the Company will continue as a going concern. As discussed in Note 1 to the
      financial statements, the Company's ability to continue in the normal course
      of
      business is dependent upon its ability to generate revenue and raise capital
      through the issuance of equity and/or debt securities, which raises substantial
      doubt about its ability to continue as a going concern. Management's plans
      regarding this matter are also described in Note 1. The financial statements
      do
      not include any adjustments that might result from the outcome of this
      uncertainty.














/s/
      HOLTZ
      RUBENSTEIN REMINICK LLP














Melville,
      New York


March
      16,
      2006





F-1
          -





**THE
                  MACREPORT.NET, INC. AND SUBSIDIARIES****CONSOLIDATED
                  BALANCE SHEET****November
                  30, 2005**ASSETSCURRENT
                  ASSETS:Cash
                  and cash equivalents
              
              $
              32,694Marketable
                  securities
              
              
              666,470Accounts
                  receivable
              
              
              39,750Other
                  current assets
              
              
              6,400Total
                  current assets
              
              
              
              
              
              745,314FIXED
                  ASSETS, net
              
              
              
              
              
              2,232,552OTHER
                  ASSETSDeposits
                  on machinery
              
              
              76,401Security
                  deposits
              
              
              7,571Total
                  other assets
              
              
              
              
              
              83,972Total
                  assets
              
              
              
              
              $
              3,061,838LIABILITIES
                  AND STOCKHOLDERS' EQUITYCURRENT
                  LIABILITIES:Cash
                  overdraft
              
              $
              106,435Accounts
                  payable and accrued expenses
              
              
              353,575Notes
                  payable - current portion
              
              
              127,203Note
                  payable - related party
              
              
              963,044Due
                  to related party
              
              
              123,000Deferred
                  revenue
              
              
              187,222Total
                  current liabilities
              
              
              
              
              
              1,860,479OTHER
                  LIABILITIES:Notes
                  payable - less current portion
              
              
              
              
              
              286,614Total
                  liabilities
              
              
              
              
              
              2,147,093COMMITMENTSSTOCKHOLDERS'
                  EQUITY:Preferred
                  stock $.0001 par value, authorized 5,000,000shares,
                  no shares issued
              
              
              -Common
                  stock $.0001 par value, authorized 25,000,000shares,
                  17,949,165 shares issued and outstanding
              
              
              1,795Additional
                  paid-in-capital
              
              
              4,681,148Deficit
              
              
              (3,768,198
              )Total
                  stockholders' equity
              
              
              
              
              
              914,745Total
                  liabilities and stockholders' equity
              
              
              
              
              $
              3,061,838


F-2
            -


**THE
                  MACREPORT.NET, INC. AND SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF OPERATIONS**Year   
                  Ended
              
              
              Year      EndedNovember
                  30,
              
              
              November 
                  30,2005
              
              
              2004REVENUES
              
              $
              1,639,027
              
              $
              2,122,069COST
                  OF REVENUES
              
              
              555,114
              
              
              330,161GROSS
                  PROFIT
              
              
              1,083,913
              
              
              1,791,908SELLING,
                  GENERAL ANDADMINISTRATIVE
                  EXPENSES
              
              
              1,868,840
              
              
              1,119,921(LOSS)
                  INCOME BEFORE OTHER INCOME (EXPENSE)
              
              
              (784,927
              )
              
              671,987OTHER
                  INCOME (EXPENSE):Net
                  rental loss
              
              
              (635,510
              )
              
              **-**Unrealized
                  gain on marketable securities
              
              
              125,891
              
              
              646,064(Loss)
                  gain on sale of marketable securities
              
              
              (394,197
              )
              
              21,047Interest
                  expense
              
              
              (143,926
              )
              
              (95,988
              )Interest
                  income
              
              
              1,529
              
              
              1,887(1,046,213
              )
              
              573,010Income
                  Taxes
              
              
              125
              
              
              -NET
                  (LOSS) INCOME
              
              $
              (1,831,265
              )
              $
              1,244,997(LOSS)
                  INCOME PER COMMON SHARE:BASIC
              
              $
              (0.11
              )
              $
              0.08DILUTED
              
              
              (0.11
              )
              $
              0.07WEIGHTED
                  AVERAGE NUMBER OFSHARES
                  OUTSTANDING:BASIC
              
              
              17,159,379
              
              
              16,285,948DILUTED
              
              
              17,159,379
              
              
              16,646,362
  F-3
            -
  
 **THE
                    MACREPORT.NET, INC. AND SUBSIDIARIES****STATEMENT
                    OF STOCKHOLDERS' EQUITY****FOR
                    THE TWO YEARS ENDED NOVEMBER 30, 2005**AdditionalCommon
                    Stock
                
                Paid-inShares
                
                
                Amount
                
                
                Capital
                
                
                Deficit
                
                
                TotalBalance,
                    December 1, 2003
                
                
                16,272,942
                
                $
                1,627
                
                $
                1,680,784
                
                $
                (3,181,930
                )
                $
                (1,499,519
                )Stock
                    issued for conversion of convertiblepromissory
                    notes
                
                
                20,099
                
                
                2
                
                
                51,189
                
                
                -
                
                
                51,191Net
                    income for the year
                
                
                -
                
                
                -
                
                
                -
                
                
                1,244,997
                
                
                1,244,997Balance,
                    November 30, 2004
                
                
                16,293,041
                
                
                1,629
                
                
                1,731,973
                
                
                (1,936,933
                )
                
                (203,331
                )Sale
                    of stock
                
                
                1,000,000
                
                
                100
                
                
                1,994,900
                
                
                
                
                
                1,995,000Stock
                    issued for conversion of convertiblepromissory
                    notes
                
                
                656,124
                
                
                66
                
                
                954,275
                
                
                
                
                
                954,341Net
                    loss for the year
                
                
                
                
                
                
                
                
                
                
                
                (1,831,265
                )
                
                (1,831,265
                )Balance,
                    November 30, 2005
                
                
                17,949,165
                
                $
                1,795
                
                $
                4,681,148
                
                $
                (3,768,198
                )
                $
                914,745
   F-4
              -


**THE
                  MACREPORT.NET, INC. AND SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF CASH FLOWS**Year
                  Ended
              
              Year
                  EndedNovember
                  30,
              
              
              November 
                  30,2005
              
              
              2004CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  (loss) income
              
              $
              (1,831,265
              )
              $
              1,244,997Adjustments
                  to reconcile net(loss) income to net cash(used
                  in) provided by operating activities:Depreciation
                  and amortization
              
              
              63,013
              
              
              12,638Unrealized
                  gain on securities
              
              
              (125,891
              )
              
              (646,064
              )Changes
                  in operating assets and liabilities:(Increase)
                  decrease in assets:Trading
                  securities, including unrealized
              
              
              628,435
              
              
              (502,450
              )Accounts
                  receivable
              
              
              (25,042
              )
              
              (14,708
              )Other
                  current assets
              
              
              (2,400
              )
              
              (2,000
              )Increase
                  (decrease) in liabilities:Accounts
                  payable and accrued expenses
              
              
              277,940
              
              
              (262,130
              )Deferred
                  revenue
              
              
              (176,811
              )
              
              327,930Total
                  adjustments
              
              
              639,244
              
              
              (1,086,784
              )Net
                  cash (used in) provided by operating activities
              
              
              (1,192,021
              )
              
              158,213CASH
                  FLOWS FROM INVESTING ACTIVITIES:Deposits
                  on machinery
              
              
              (76,401
              )
              
              -Purchase
                  of property and equipment
              
              
              (1,569,898
              )
              
              (406,304
              )Net
                  cash used in investing activities
              
              
              (1,646,299
              )
              
              (406,304
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Cash
                  overdraft
              
              
              106,435
              
              
              -Proceeds
                  of notes payable
              
              
              124,983
              
              
              1,120,000Repayments
                  of notes payable
              
              
              (60,242
              )
              
              (22,743
              )Repayments
                  of loan payable - related party
              
              
              (269,196
              )
              
              -Advances
                  to related party
              
              
              (170,000
              )
              
              -Advances
                  from related party
              
              
              293,000
              
              
              -Proceeds
                  from sale of stock
              
              
              1,995,000
              
              
              -Net
                  cash provided by financing activities
              
              
              2,019,980
              
              
              1,097,257Net
                  (decrease) increase in cash and cash equivalents
              
              
              (818,340
              )
              
              849,166Cash
                  and cash equivalents at beginning of year
              
              
              851,034
              
              
              1,868Cash
                  and cash equivalents at end of year
              
              $
              32,694
              
              $
              851,034


F-5
            -


**THE
      MACREPORT.NET, INC.AND SUBSIDIARIES**







**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**YEARS
      ENDED NOVEMBER 30, 2005 AND 2004**





**1.**  **Organization\Description
      of Business** **:**





The
      MacReport.Net, Inc. (the "Company") was incorporated in 2000 under the laws
      of
      the State of Delaware. The Company is an internet information and media company
      formed to allow publicly and privately held companies to communicate relevant
      corporate information directly with the investing public. This is done through
      the use of a web site that provides the user with key information via management
      interviews, press releases, video conferencing and other information. The
      Company has its headquarters in Melville, NY, and satellite locations in New
      York City and Marcellus, New York.





Going
      Concern :


The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. As shown in the financial statements, the
      Company incurred a net loss of $1,831,265 for the year ended November 30, 2005.
      At November 30, 2005 current liabilities exceed current assets by $1,115,165.
      These factors raise substantial doubt about the Company’s ability to continue as
      a going concern. Management of the Company intends to increase sales and profit
      margin to generate income and positive cash flow. The financial statements
      do
      not include any adjustments relating to the recoverability and classification
      of
      recorded assets, or the amounts and classification of liabilities that might
      be
      necessary in the event the Company cannot continue in existence.








**2.**  **Summary
      of Significant Accounting Policies** **:**





a.  Principles
      of consolidation and basis of presentation





The
      consolidated financial statements include the accounts of the Company and four
      subsidiaries. All significant intercompany transactions have been eliminated
      in
      consolidation. The subsidiaries are as follows:





The
      Marcellus Group, LLC - A
      company owned 100% by the MacReport.Net that was formed in 2004 to acquire,
      renovate, and lease out commercial properties. As of November 30, 2005, the
      Marcellus Group LLC owned eight buildings in the town of Marcellus, New
      York.





MacNetworks
      Inc. - A
      company owned 100% by the MacReport.Net that was formed in 2004. As of November
      30, 2005, there has been no material activity in this corporation.





JA
      Spa, LLC - A
      company owned 100% by the MacReport.Net that was formed in 2005 to develop
      and
      operate a health spa. As of November 30, 2005, the spa was not yet operating. F-6
            -


Monolith
      Athletic Club, Inc. - A
      company owned 71% by the MacReport.Net that is the result of a merger in June
      2005 of Monolith Athletic Club. LLC, a newly formed company, and Springbay
      Oil
      Company, Inc., a company that was 71% owned by the MacReport.Net Inc. Monolith
      Athletic Club. Inc. was formed to purchase a franchise and operate a
      professional soccer team in the Syracuse, New York area. As of November 30,
      2005, this company had not entered into any agreements in furtherance of its
      business plans.





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 reported amounts
      of
      revenues and expenses during the reporting period. Actual results could differ
      from those estimates.





**2.**  **Summary
      of Significant Accounting Policies** **:** (Cont'd)





c.  Revenue
      recognition





Revenues
      from fee-based contracts with terms greater than one month are recognized
      ratably over the life of the contract. Advertising revenues are recognized
      over
      the period of the related ad.





Certain
      agreements with customers provide for payment in the form of restricted equity
      securities of publicly traded companies. In accordance with Financial Accounting
      Standards Board Statement No. 123(R), "Accounting for Stock Based Compensation",
      revenue recognized from these transactions is based on the value of similar
      services rendered to other customers for whom the Company receives payment
      in
      cash.





d.  Cash
      and cash equivalents





For
      purposes of the statement of cash flows, the Company includes cash on deposit,
      money market funds and amounts held by brokers in cash accounts to be cash
      equivalents.





e.  Marketable
      securities





The
      Company reports its investment in marketable securities under the provisions
      of
      Financial Accounting Standards Board Statement No. 115 "Accounting for Certain
      Investments in Debt and Equity Securities." In accordance with this standard,
      securities which are classified as "trading securities" are recorded in the
      Company's balance sheet at fair market value, with the resulting unrealized
      gain
      or loss reflected in the Company's statement of operations in the current
      period. Securities which are classified as "available for sale" are also
      reported at fair market value, however, the unrealized gain or loss on these
      securities is listed as a separate component of stockholders'
      deficiency.





f.  Allowance
      for doubtful accounts




Management
      must make estimates of the uncollectibility of accounts receivable. Management
      specifically analyzes accounts receivable and analyzes historical bad debts,
      customer concentrations, customer credit-worthiness, current economic trends
      and
      changes in customer payment terms when evaluating the adequacy of the allowance
      for doubtful accounts. Balances in accounts receivable that are deemed
      uncollectible due to termination of a contract prior to services being performed
      are charged against revenue. F-7
            -
  g.  Equipment
        and depreciation




Equipment
      is
      stated at cost. Major expenditures for property and those which substantially
      increase useful lives are capitalized. Maintenance, repairs, and minor renewals
      are expensed as incurred. When assets are retired or otherwise disposed of,
      their costs and related accumulated depreciation are removed from the accounts
      and resulting gains or losses are included in income. Depreciation is provided
      by both straight-line and accelerated methods over the estimated useful lives
      of
      the assets. Differences attributable to using accelerated methods are not
      considered material.




**2.**  **Summary
      of Significant Accounting Policies** **:** (Cont'd)


h.  Concentration
      of risk




The
      Company
      invests its excess cash in deposits and money market accounts with major
      financial institutions with strong credit ratings. From time to time, the
      Company's cash accounts may exceed the Federal Depository Insurance Coverage
      Limit. Cash and cash equivalents approximated $33,000 and $850,000 at November
      30, 2005 and 2004, respectively. Generally, the investments mature within ninety
      days, and therefore, are subject to little risk. The Company has not experienced
      losses related to these investments.




i.  Net
      income (loss) per common share and per common share equivalent
      share





The
      reconciliations for the years ended November 30, 2005 and 2004 are as
      follows:





*Year
                Ended November 30, 2005*
            
            Loss
            
            Shares
            
            Per
                ShareBasic
                EPS
            
            
            
            
            $
            (1,831,265
            )
            
            17,159,379
            
            $
            (.11
            )Effect
                of Dilutive Securities
            
            
            
            
            
            -
            
            
            -Diluted
                EPS
            
            
            
            
            $
            (1,831,265
            )
            
            17,159,379
            
            $
            (.11
            )





*Year
                Ended November 30, 2004*
            
            Income
            
            Shares
            
            Per
                ShareBasic
                EPS
            
            
            
            
            $
            1,244,997
            
            
            16,285,948
            
            $
            .08Effect
                of Dilutive Securities
            
            
            
            
            
            -
            
            
            360,414
            
            
            -Diluted
                EPS
            
            
            
            
            $
            1,244,997
            
            
            16,646,362
            
            $
            .07


F-8
            -


j.  Income
      taxes




Deferred
      tax
      assets and liabilities are determined based on differences between financial
      reporting and tax bases of assets and liabilities, and are measured using the
      enacted tax rates and laws that will be in effect when the differences are
      expected to reverse.




k.  Advertising
      costs




All
      costs
      relating to marketing and advertising are expensed in the period incurred.
      Advertising expense for the years ended November 30, 2005 and 2004 approximated
      $492,000 and $266,000, respectively.




l. New
      Accounting pronouncements




In
      December
      2004, the FASB issued SFAS No. 123(R), "Accounting for Stock-Based Compensation"
      ("SFAS No. 123(R)"). SFAS No. 123(R) establishes standards for the accounting
      for transactions in which an entity exchanges its equity instruments for goods
      or services. This statement focuses primarily on accounting for transactions
      in
      which an entity obtains employee services in share-based payment transactions.
      SFAS No. 123(R) requires that the fair value of such equity instruments be
      recognized as an expense in the historical financial statements as services
      are
      performed. Prior to SFAS No. 123(R), only certain pro forma disclosures of
      fair
      value were required. The provisions of this statement are effective for small
      business filers the first interim reporting period that begins after December
      15, 2005. The Company has not issued stock options since its
      inception.




On
      December
      16, 2004, the FASB issued SFAS No. 153, "Exchange of Non-monetary Assets",
      an
      amendment of Accounting Principles Board ("APB") Opinion No. 29, which differed
      from the International Accounting Standards Board's ("IASB") method of
      accounting for exchanges of similar productive assets. Statement No. 153
      replaces the exception from fair value measurement in APB No. 29, with a general
      exception from fair value measurement for exchanges of non-monetary assets
      that
      do not have commercial substance. The statement is to be applied prospectively
      and is effective for non-monetary asset exchanges occurring in fiscal periods
      beginning after June 15, 2005. The Company does not believe that SFAS No. 153
      will have a material impact on its results of operations or cash
      flows.




In
      May
      2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections.
      This statement applies to all voluntary changes in accounting principle and
      requires retrospective application to prior periods’ financial statements of
      changes in accounting principles, unless this would be impracticable. The
      statement also makes a distinction between “retrospective application” of an
      accounting principle and the “restatement” of financial statements to reflect
      the correction of an error. This statement is effective for accounting changes
      and corrections of errors made in fiscal years beginning after December 15,
      2005.




m.
            Comprehensive
                Income





Other
      comprehensive income refers to revenues, expenses, gains and losses that under
      generally accepted accounting principles are included in comprehensive income
      but are excluded from net income as these amounts are recorded directly as
      an
      adjustment to stockholders' equity. Comprehensive income approximated net income
      for all periods presented.


F-9
            -
  **3.**  **Supplemental
        Cash Flow Information** **:**





Years
                EndedNovember
                30,2005
            
            
            2004Cash
                paid for:Interest
            
            $
            90,705
            
            $
            18,657Income
                taxes
            
            $
            125
            
            $
            0





For
      the
      years ended November 30, 2005 and 2004, the Company had a non-cash operating
      and
      financing activity when it issued shares of its common stock for the conversion
      of convertible promissory notes totaling $954,341 and $51,191,
      respectively.





For
      the
      year ending November 30, 2005, the Company had a non-cash investing and
      financing activity when it purchased a building and financed it with a mortgage
      of $300,000.





**4.
      M arketable Securities** **:**





Following
      is a comparison of the cost and market value of trading securities included
      in
      current assets at November 30, 2005:




Cost
            
            $540,579Unrealized
                gain
            
            
            125,891Market
                Value
            
            $
            666,470





****


**5.**  ****Property
      and Equipment**** **:**





Major
      classes of equipment consist of the following at November 30, 2005:





EstimatedUseful
                LifeYearsLand
              Buildings
                and improvements
            
            
            -
              40
            
            $
            253,354
              1,701,448Furniture
                and fixtures
              Trucks
                and autos
            
            
            5
              5
            
            
            52,271
              121,216Equipment
            
            
            5
            
            
            208,4302,336,719Less
                accumulated depreciation
            
            
            
            
            
            104,167Net
                Property and equipment
            
            
            
            
            $
            2,232,552





Depreciation
      expense was $63,013 and $12,638 for the years ended November 30, 2005 and 2004,
      respectively.







F-10
            -








**6.**  **Notes
      Payable** **:**




Notes
      payable consist of the following at November 30, 2005:







Loan
                payable on building purchase, due in monthlyinstallments
                of $2,418. The note bears interest at 7.5% (a)
            
            $
            293,837Promissory
                notes, principal and interest due at various dates through July 15,
                2006.
                The notes bear interest at a rate of 6% per annum. (b)
            
            
            244,983Convertible
                notes payable (c)
            
            
            119,980Note
                payable - related party (d)
            
            
            718,061$
            1,376,861







(a)
            The
                Company purchased a building in December 2004 subject to a mortgage
                in the
                amount of $300,000. The note bears interest at 7.5% and is due in
                monthly
                installments through December 2024.





(b)
            The
                Company has entered into several loan agreements with a hedge fund.
                A
                wholly owned subsidiary of the Company was appointed as a General
                Partner
                of this hedge fund in February 2004. Accrued interest on the outstanding
                principal amount of these notes together with the principal amount
                is due
                and payable on the maturity date. As of November 30, 2005, one of
                these
                notes in the amount of $120,000 was past due.





(c)
      Convertible promissory notes totaling $119,980 bear interest at a rate of
      9% per annum with maturity dates that have expired. Pursuant to the terms of
      the
      convertible notes, if the Company does not prepay the notes prior to their
      expiration, the Company may convert the balance due, together with accrued
      interest, into shares of the Company's common stock. The conversion ratio for
      these notes is the greater of : (i) the amount that is equal to the product
      of
      the closing bid price per share for the Common Stock, as reported on the
      over-the-counter electronic bulletin board, or such other public market that
      the
      Company’s Common Stock is then traded and seventy-five percent (75%); and (ii)
      3.50. The Company is currently in negotiations with these note holders with
      respect to the conversion of notes into common stock and expects to convert
      the
      notes within thirty days. As of November 30, 2005, two of these note holders
      are
      commencing legal action against the Company to collect on their respective
      notes.




(d)
      In
      October of 2004, a company that is 100% owned by the majority stockholder and
      CEO of the Company loaned The Marcellus Group LLC $1,000,000. The note bears
      interest at 8% and is being repaid in monthly installments of $25,947, with
      a
      final balloon payment of approximately $500,000 due November 1, 2006. As of
      November 30, 2005, the Company was in default of this note due to several missed
      payments of monthly installments during the year.





Long-term
      debt matures as follows: F-11
            -


Years
                  EndingNovember
                  30,
              
              Amount2006
              
              $
              1,092,0802007
              
              
              7,7842008
              
              
              8,3882009
              
              
              9,0392010
              
              
              9,741Thereafter
              
              
              251,662$
              1,376,861




**7.**  **Commitments** **:**


a.  Leases




The
      Company leases its Melville office space under a three year lease expiring
      November 2006, with minimum monthly rent of approximately $1,700, plus annual
      escalations of approximately 3%.




Minimum
      future rental commitments for the remainder of the lease term are as
      follows:




Years
                EndingNovember
                30,
            
            Amount2006
            
            $
            30,000




The
      Company
      also leases an apartment in New York City for the personal use of its CEO under
      a month to month lease with minimum monthly rent of $4,600.




Total
      rental
      expense approximated $113,000 and $184,000 for the years ended November 30,
      2005
      and 2004, respectively.







b.
            Litigation





The
      Company is involved in various legal proceedings and claims incident to the
      normal conduct of its business. The Company believes that such legal proceedings
      and claims, individually and in the aggregate, are not likely to have a material
      adverse effect on its financial position or results of
      operations. F-12
            -
  **8.**  **Related
        Party Transactions** **:**





Fees
      for
      management, executive, and administrative services paid to stockholders for
      the
      year ended November 30, 2005 and 2004 were $280,000 and $235,000,
      respectively.





The
      Company leases an executive residence and office facility for $4,600 in monthly
      rent on a month-to-month basis. The Company's CEO has the exclusive personal
      use
      of the executive residence facility at no cost. The lease cost associated with
      the executive residence is not included as compensation to the CEO.





From
      time
      to time, the Company may advance and receive funds from a company that is 100%
      owned by the majority stockholder and CEO of the Company. As of November 30,
      2005, the Company owed $123,000 to this related party.  These notes are due
      on demand and are not interest bearing.








**9.**  **Stockholders’
      Equity** **:**





(a)
      The
      Company has authorized 25,000,000 shares, par value $0.0001, of common stock.
      The common stock has one vote per share, with no cumulative voting. There are
      no
      pre-emptive rights, conversion rights, preferences, redemption provision,
      sinking fund provisions or any liability for further calls or assessments.
      There
      are no stated liquidation rights other than those that may exist under Delaware
      law.





(b)
      The
      Company has authorized 5,000,000 shares, par value $0.0001, of preferred stock.
      Shares of preferred stock may be issued in such classes or series, and may
      have
      such voting powers, and such designations, preferences and other special rights
      and qualifications, or restrictions thereof, as determined by the Board of
      Directors.





(c) Stock option plan




In
      2001, the
      Company adopted a plan (the "2001 Stock Option Plan" or the "Plan") pursuant
      to
      which the Board of Directors is authorized to award options to purchase up
      to
      1,000,000 shares of Common Stock to selected officers, employees, agents,
      consultants and other persons who render services to the Company. The options
      may be issued on such terms and conditions as determined by the Board or
      Committee, and may be issued so as to qualify as incentive stock options under
      Internal Revenue Code Section 422A. Reserved shares under the Plan at November
      30, 2005 are 1,000,000. As of November 30, 2005, there were no options granted
      under this Plan. F-13
            -


**10.**  **Income
        Taxes** **:**





The
                components of the net deferred tax assets at November 30, 2005 are
                as
                follows:





Deferred
                Tax Assets:Tax
                loss carryforwards
            
            $
            1,427,000Valuation
                Allowance
            
            
            (1,427,000
            )Net
                Deferred Income Taxes
            
            $
            -





A
                reconciliation of the federal statutory rate to the Company's effective
                tax rate is as follows:





Years
                EndedNovember
                30,2005
            2004Tax
                (Benefit) Provision U.S. Federal Statutory Income Rate
            (34%)
            34%State
                Income Tax, net of federal tax benefits
            (7%)
            7%Increase
                (Reduction) in Valuation Allowance
            41%
            (41%)0%
            0%





No
      provision for income taxes was recorded during the year ended November 30,
      2005
      due to net losses being incurred. At November 30, 2005, the Company had net
      operating and capital loss carryforwards for tax purposes of approximately
      $3,600,000, which expire through 2025.





At
      November 30, 2005 and 2004, the Company provided a full valuation allowance
      against the gross deferred tax asset since, in management’s judgment, it is more
      likely than not, such benefits will not be realized.











**11.**  **Fair
      Value of Financial Instruments** **:**





The
      methods and assumptions used to estimate the fair value of the following classes
      of financial instruments for:




*Current
      Assets and Current Liabilities:* The
      carrying amount of cash, and payables approximate their fair value. The fair
      value of marketable securities was derived from quotes listed by national stock
      exchanges. The fair value of the Company's notes payable was estimated using
      a
      discounted cash flow analysis, based on the Company's assumed incremental
      borrowing rates for similar types of borrowing arrangements. The carrying amount
      of fixed rate debt at November 30, 2005 approximates fair value.








**12.**  **Major
      Suppliers** **:**





During
      the year ended November 30, 2005, approximately 85% of the Company’s advertising
      expense was paid to two suppliers.