##### Table of Contents



U.S. SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM
10-KSB/A
 
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934,
 For The Fiscal Year Ended June 30, 2006
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934.
 For The Transition Period From            To
 Commission File Number: 000-33197
 
 HALO TECHNOLOGY HOLDINGS, INC.
 (Name of small business issuer in its charter)
 
 NEVADA
(State or other jurisdiction of 
incorporation or organization)
    
    88-0467845
(I.R.S. Employer
Identification No.)200 Railroad Avenue, 3rd Floor, 
Greenwich, Connecticut
    
    06830(Address of principal executive offices)
    
    (Zip Code)
 (203) 422-2950
(Issuers telephone number)
 
 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None
 SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
 Common Stock, Par Value $0.00001 Per Share
(Title of Class)
 
 þ o
 o
 o þ




---



TABLE OF CONTENTS  PART IITEM 1. DESCRIPTION OF BUSINESSITEM 2. PROPERTIESITEM 3. LEGAL PROCEEDINGSITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSPART IIITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIESITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONSITEM 7. FINANCIAL STATEMENTSITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREITEM 8A. CONTROLS AND PROCEDURESITEM 8B. OTHER INFORMATIONPART IIIITEMS 9, 10, 11, 12, and 14ITEM 13. EXHIBITSSIGNATURESEXHIBIT INDEXEX-21.1: SUBSIDIARIES OF THE COMPANYEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATION    Table of Contents  EXPLANATORY NOTE
   DOCUMENTS INCORPORATED BY REFERENCE
  o þ
 
 PART I
 
 ITEM 1. DESCRIPTION OF BUSINESS.
 Forward-Looking Information
  Historical Background
  The Acquisition of WARP Solutions, Inc.
   The Upstream Merger and Name Change
  2




---



##### Table of Contents



The Acquisition of Spider Software, Inc.
  Acquisition of Gupta Technologies, LLC
    Acquisition of Kenosia Corporation
  Acquisition of Five Enterprise Software Companies
   3




---



##### Table of Contents



4




---



##### Table of Contents



Acquisition of Empagio
   Acquisition of ECI
  Foresight Sale
  Business of the Company
  Empagio Business
  5




---



##### Table of Contents



Gupta Business
     6




---



##### Table of Contents



Process Business
  DAVID Business
  Kenosia Business
  ProfitKey Business
  Warp Solutions Business
    Sales and Marketing
  7




---



##### Table of Contents



Software Product Development
  Intellectual Property and Proprietary Rights
      8




---



##### Table of Contents



Competition
  
    
    product functionality, technology, integration, performance and price;
    
    industry-specific products and industry-expert service;
    
    ease of use and installation;
    
    cost benefits;
    
    sales and marketing efforts;
    
    support efforts; and
    
    new products.
  
    
    Gupta-Guptas primary competitors are Oracle, Microsoft, Sybase, Borland, and MySQL.
    
    Warp Solutions- Warp Solutions primary competitor is Cisco.
    
    Kenosia (including RevCast)- Kenosias primary competitors are Interactive Edge,
Vision Chain, Bentonville Software, Decisions Made Easy, Proclarity and Verisync.
    
    DAVID -DAVIDs primary competitors are Valley Oak Systems, GENSOURCE, Insurworx, Tropics,
    
    CSC RiskMaster and ATS.
    
    Process (including Tenebril)- Processs primary competitor is HP.
    
    Empagio (including the former Tesseract and ECI)- Empagios primary competitors are
Ultimate Software, Hewitt, Accenture, ADP and Ceridian.
    
    ProfitKey- ProfitKeys primary competitors are Epicor, Global Shop, Made 2 Manage and
Intuitive.
   9




---



##### Table of Contents



Raw Materials
  Dependence on Major Customers
    Research and Development
  Personnel
  10




---



##### Table of Contents



Risk Factors
   Risks Related to Halos Business
 We have a limited operating history which may make it difficult to predict future results of
operations.
  We have a history of losses and negative working capital and may need additional financing in the
near future in order to continue operations.
   We may not be able to borrow funds, which in turn could impair our ability to carry out our
business plan.
  11




---



##### Table of Contents



If we fail to meet our obligations under our debt agreements our secured lender could foreclose on
our assets.
    A failure to adapt to rapidly changing markets and develop new technologies could harm our
business.
  
    
    rapidly changing technologies;
    
    evolving and competing industry standards;
    
    changing customer needs;
    
    frequent new product introductions and enhancements;
    
    increased integration with other functions; and
    
    rapid product obsolescence.
   12




---



##### Table of Contents



Failure to timely develop new products which achieve market acceptance could interfere with Halos
customer relationships and adversely affect Halos business, financial condition and results of
operations.
  A failure by us to manage our growth and expansion could have a material adverse effect on our
business.
  We do not anticipate declaring any cash dividends in the foreseeable future which could reduce the
liquidity of your investment.
  Our obligations to indemnify our officers and directors may divert funds from our business
operations.
  Our common stock is subject to penny stock restrictions under federal securities laws which
could reduce the liquidity of our common stock.
   13




---



##### Table of Contents



Risk Factors Related to Halos Acquisition Strategy
 Failure to manage the risks associated with our growth and acquisition strategy could have a
material adverse effect on Halos operations and financial condition.
   We may be required to recognize impairment charges which could negatively impact our earnings.
   14




---



##### Table of Contents



Failure to finance future acquisitions could limit our ability to implement our business plan.
  Additional Risk Factors Related to the Business of Halos Operating Subsidiaries
 Financial results may vary significantly from quarter to quarter which could affect our ability to
sustain our operations.
   
    
    fluctuations in demand for Halos products, upgrades to Halos products, or
services;
    
    fluctuations in demand for Halos products due to the potential deteriorating
economic conditions of Halos customer base;
    
    seasonality of purchases and the timing of product sales and shipments;
    
    unexpected delays in introducing new products and services or improvements to
existing products and services;
    
    new product releases, licensing models or pricing policies by Halos competitors;
    
    acquisitions or mergers involving Halos competitors or customers;
    
    impact of changes to Halos product distribution strategy and pricing policies;
    
    lack of order backlog;
    
    loss of a significant customer or distributor;
    
    changes in purchasing and/or payment practices by Halos distributors or other customers;
    
    a reduction in the number of independent software vendors
(ISVs), who embed
Halos products, or value-added resellers (or VARs), who sell and deploy Halos
products;
    
    changes in the mix of domestic and international sales;
    
    impact of changes to Halos geographic investment levels and business models;
    
    gains or losses associated with discontinued operations; and
    
    changes in Halos business plan or strategy.
   15




---



##### Table of Contents



Seasonality may contribute to fluctuations in Halos quarterly operating results.
  Halo currently operates without a backlog which can affect our periodic results.
  Our efforts to develop and maintain brand awareness of Halo products may not be successful. A lack
of brand awareness could adversely affect Halos sales.
  Halo may face problems in connection with product line expansion which could affect its future
operations and limit its growth opportunities.
  A small number of distributors account for a significant percentage of Halos billings. The loss of
one or more of such distributors could significantly reduce Halos revenue, cash flow and earnings.
  Halo depends on an indirect sales channel. A failure to grow its indirect sales or the loss of
indirect channel partners could significantly reduce Halos revenue, cash flow and earnings.
  16




---



##### Table of Contents




    
    the emergence of a new platform resulting in the failure of independent software
vendors to develop and the failure of value-added resellers to sell Halos products
based on Halos supported platforms;
    
    pressures placed on the sales channel to sell competing products;
    
    Halos failure to adequately support the sales channel;
    
    consolidation of certain of Halos indirect channel partners;
    
    competing product lines offered by certain of Halos indirect channel partners; and
    
    business model or licensing model changes of Halos channel partners or their competitors.
  Halo may not be able to develop the strategic relationships necessary to succeed in its operations.
  The failure of Halo to maintain or obtain third-party software licenses could harm our business,
operating results and financial condition due to loss of customer revenue.
  Halo may become subject to product or professional services liability claims which could divert a
significant amount of our revenues from operations.
  Halo competes with Microsoft while simultaneously supporting Microsoft technologies. Our business
maybe harmed if Microsofts technology becomes more directly competitive with Halo.
  17




---



##### Table of Contents



A failure to remain competitive in our industry could have a material adverse effect on our sales.
    18




---



##### Table of Contents



Halo is susceptible to a shift in the market for client/server applications toward server based
thin client
or web-based applications.
  Halos dependence on international sales and operations subjects it to risks associated with
foreign laws,
staffing and currency.
  
    
    foreign laws and business practices favoring local competition;
    
    dependence on local channel partners;
    
    compliance with multiple, conflicting and changing government laws and regulations;
    
    longer sales cycles;
    
    greater difficulty or delay in collecting payments from customers;
    
    difficulties in staffing and managing foreign operations;
    
    foreign currency exchange rate fluctuations and the associated effects on product
demand and timing of payment;
    
    increased tax rates in certain foreign countries;
    
    difficulties with financial reporting in foreign countries;
    
    foreign protectionist laws and business practices that favor local competition;
    
    failure of local laws to provide the same degree of protection against infringement
of our intellectual property;
    
    quality control of certain development, translation or localization activities; and
    
    political and economic instability.
   19




---



##### Table of Contents



Fluctuations in the relative value of foreign currencies can reduce our revenues or increase our
costs.
  
 ITEM 2. PROPERTIES.
    
 ITEM 3. LEGAL PROCEEDINGS.
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  20




---



##### Table of Contents



PART II
 
 ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER
PURCHASES OF EQUITY SECURITIES.
   Bid PriceFiscal Year
    
    Quarter Ended
    
    Low
    
    High2005
    
    September 30, 2004
    
    3.00
    
    8.00December 31, 2004
    
    1.50
    
    5.00March 31, 2005
    
    1.51
    
    5.00June 30, 2005
    
    1.60
    
    4.002006
    
    September 30, 2005
    
    .92
    
    2.85December 31, 2005
    
    1.10
    
    1.75March 31, 2006
    
    1.20
    
    1.80June 30, 2006
    
    .80
    
    1.30
  Holders
   Dividends
   21




---



##### Table of Contents



Securities Authorized for Issuance Under Equity Compensation Plans.
  Equity Compensation Plan Information
 Number of
    
    
    
    
    
    Number ofsecurities
    
    
    Weighted-
    
    
    securitiesto be issued
    
    
    average
    
    
    remainingupon
    
    
    exercise
    
    
    available forexercise of
    
    
    price of
    
    
    futureoutstanding
    
    
    outstanding
    
    
    issuanceoptions,
    
    
    options,
    
    
    under equitywarrants
    
    
    warrants
    
    
    compensationand rights
    
    
    and rights
    
    
    plansEquity compensation plans approved by security holders
    
    
    3,643,500
    
    
    $
    1.17
    
    
    
    4,756,500Equity compensation plans not approved by security holders
    
    
    570,077
    
    
    $
    5.38
    
    
    
    206,534Total
    
    
    4,213,577
    
    
    $
    1.74
    
    
    
    4,963,034
    22




---



##### Table of Contents



Recent Sales of Unregistered Securities
  Section 15(g) of the Exchange Act
       
 ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
  Results of Operations
 Year Ended June 30,2006
    
    2005% of
    
    
    
    
    
    % of(in 000s)
    
    Revenue
    
    (in 000s)
    
    RevenueRevenues
    
    
    25,209
    
    
    
    100
    %
    
    
    5,124
    
    
    
    100
    %Cost of revenues
    
    
    5,365
    
    
    
    21
    %
    
    
    846
    
    
    
    17
    %Gross margin
    
    
    19,844
    
    
    
    79
    %
    
    
    4,278
    
    
    
    83
    %Product development
    
    
    6,145
    
    
    
    24
    %
    
    
    1,589
    
    
    
    31
    %Sales, marketing and business development
    
    
    7,508
    
    
    
    30
    %
    
    
    3,652
    
    
    
    71
    %General and administrative
    
    
    15,128
    
    
    
    60
    %
    
    
    4,691
    
    
    
    92
    %Late filing penalty
    
    
    (1,034
    )
    
    
    -4
    %
    
    
    1,034
    
    
    
    20
    %Goodwill impairment
    
    
    5,200
    
    
    
    21
    %
    
    
    3,893
    
    
    
    76
    %Fair value gain (loss) on warrants
    
    
    41,962
    
    
    
    166
    %
    
    
    (32,012
    )
    
    
    -625
    %Interest expense
    
    
    9,303
    
    
    
    37
    %
    
    
    8,506
    
    
    
    166
    %
 Revenue
  23




---



##### Table of Contents



Cost of Revenue
     Operating Expenses
 Research and Development
  24




---



##### Table of Contents



Sales and Marketing
  General and Administrative
  Late filing penalty
    Goodwill impairment
  25




---



##### Table of Contents



Fair Value Gain (Loss) on Warrants Revaluation
  Interest Expense
  Net Operating Loss Carryforwards
  Liquidity and Capital Resources
      26




---



##### Table of Contents



27




---



##### Table of Contents



28




---



##### Table of Contents



Series E Notes and Series E Subscription Agreements
  January 2006 Subscription Agreements
 Series E Subscription Agreement
   29




---



##### Table of Contents



January
2006 Subscription Agreements
 January 2006 Convertible Promissory Notes
   January 2006 Subscription Agreements
  30




---



##### Table of Contents




    
    the holder of the $500,000 principal amount September 2005 Note;
    
    the holder of the $500,000 principal amount October 2005 Note that is still outstanding;
    
    the holders of the $700,000 principal amount of Series E Notes;
    
    David Howitt, who made a $150,000 short term loan to Halo;
    
    the investor who had agreed to convert $67,500 in certain advisory fees due from Halo into a
Series E Subscription Agreement.
 Subsequent
Events  Issuance of Common Stock and Warrants
 Investing Activities and Current Debt
  31




---



##### Table of Contents



Subsequent Events Issuance of Common Stock and Warrants
  Termination Agreement with InfoNow
    Subsequent Events
 Issuance of Common Stock and Warrants
  32




---



##### Table of Contents



Agreement and Plan of Merger with Tenebril, Inc.
        Amendment to Current Report on Form 8-K Regarding Third Quarter Earnings
  33




---



##### Table of Contents



Restatements of Periodic Reports
     12 months Ended June 30, 2005As Previously
    
    
    Restatement
    
    
    AdjustedReported
    
    
    Adjustments
    
    
    FinancialsRevenue
    
    $
    5,123,922
    
    
    $
    
    
    
    $
    5,123,922Net (loss)
    
    
    (15,372,939
    )
    
    
    (35,885,911
    )
    
    
    (51,258,850
    )Beneficial conversion and preferred dividends
    
    
    (7,510,590
    )
    
    
    (13,993,088
    )
    
    
    (21,503,678
    )Loss attributable to common stockholders
    
    $
    (22,883,529
    )
    
    $
    (49,878,999
    )
    
    $
    (72,762,528
    )Loss per share  basic
    
    $
    (11.97
    )
    
    
    
    
    
    $
    (38.06
    )Loss per share  diluted
    
    $
    (11.97
    )
    
    
    
    
    
    $
    (38.06
    )Weighted-average number of common shares  basic
    
    
    1,912,033
    
    
    
    
    
    
    
    1,912,033Weighted-average number of common shares  diluted
    
    
    1,912,033
    
    
    
    
    
    
    
    1,912,033
 34




---



##### Table of Contents



9 months Ended March 31, 2006As Previously
    
    
    Restatement
    
    
    AdjustedReported
    
    
    Adjustments
    
    
    FinancialsRevenue
    
    $
    16,786,583
    
    
    $
    
    
    
    $
    16,786,583Net income (loss)
    
    
    (12,692,855
    )
    
    
    34,052,427
    
    
    
    21,359,572Beneficial conversion and preferred dividends
    
    
    (1,069,162
    )
    
    
    
    
    
    
    (1,069,162
    )Income (loss) attributable to common stockholders
    
    $
    (13,762,017
    )
    
    $
    34,052,427
    
    
    $
    20,290,410Income (loss) per share  basic
    
    $
    (2.97
    )
    
    
    
    
    
    $
    4.38Income (loss) per share  diluted
    
    $
    (2.97
    )
    
    
    
    
    
    $
    0.77Weighted-average number of common shares  basic
    
    
    4,637,578
    
    
    
    
    
    
    
    4,637,578Weighted-average number of common shares  diluted
    
    
    4,637,578
    
    
    
    
    
    
    
    27,860,277
 Purchase and Exchange Agreement with Unify
       35




---



##### Table of Contents



Termination Agreement with Unify
    Equity Purchase Agreement with RevCast, Inc.
     Subordinated Debt Financing
    Regulation D
 Registrable Shares
        Amendment No. 2 to Fortress Credit Agreement
       Working Capital Requirements
  36




---



##### Table of Contents




    
    Funding the continued development of our products;
    
    Sales and marketing efforts;
    
    improving and extending our services and the technologies used to deliver these services to our customers;
    
    pursuing other strategic acquisitions and alliances; and
    
    making possible investments in businesses, products and technologies.
  Critical Accounting Policies
    Revenue Recognition
   37




---



##### Table of Contents



Business Combinations and Deferred Revenue
    Product Development Costs
  38




---



##### Table of Contents



Intangible assets and Goodwill
  
    
    Significant underperformance relative to expected historical or projected future operating results;
    
    Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and
    
    Significant negative industry or economic trends.
   Stock-Based Compensation
  
 ITEM 7. FINANCIAL STATEMENTS.
  
 ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
  
 ITEM 8A. CONTROLS AND PROCEDURES.
  39




---



##### Table of Contents



Accounting for Derivative Financial Instruments
Indexed to, and Potentially Settled in, a Companys Own Stock
  40




---



##### Table of Contents



ITEM 8B. OTHER INFORMATION.
  41




---



##### Table of Contents



PART III
 
 ITEMS 9, 10, 11, 12, and 14.
  
 ITEM 13. EXHIBITS
 Exhibit No.
    
    Description of Exhibit3.1 (1)
    
    Articles of Incorporation of WARP Technology Holdings, Inc.3.2 (1)
    
    Bylaws of WARP Technology Holdings, Inc.3.3 (2)
    
    Form of the Articles of Merger of Abbott Mines Limited and WARP Technology Holdings, Inc.3.4 (6)
    
    Form of Certificate of Amendment to Articles of Incorporation of WARP Technology Holdings,
Inc. filed with the Secretary of State of the State of Nevada on September 12, 2003.3.6 (7)
    
    Form of Certificate Of Designations, Preferences And Rights Of Series A 8% Cumulative
Convertible Preferred Stock Of Warp Technology Holdings, Inc. as filed with the Secretary of
State of the State of Nevada on October 1, 2003.3.7 (7)
    
    Form of Certificate Of Designations, Preferences And Rights Of Series B 10% Cumulative
Convertible Preferred Stock Of Warp Technology Holdings, Inc. as filed with the Secretary of
State of the State of Nevada on October 1, 2003.3.8 (10)
    
    Certificate of Designations, Preferences, and Rights of Series B-2 Preferred Stock, as filed
with the Secretary of State of the State of Nevada on August 4, 2004.3.9 (12)
    
    Certificate of Change Pursuant to Nevada Revised Statutes Sec. 78.209, effecting 100 for 1
reverse split effective November 18, 2004, as filed with the Secretary of State of the State
of Nevada on November 8, 2004.3.10 (16)
    
    Certificate of Amendment to Articles of Incorporation of WARP Technology Holdings, Inc., as
filed with the Secretary of State of the State of Nevada on March 31, 2005.3.11 (17)
    
    Certificate of Designations of Series C Stock of WARP Technology Holdings, Inc.3.12 (26)
    
    Certificate of Designation for Nevada Profit Corporation, designating Series D Preferred
Stock, as filed with the Secretary of State of the State of Nevada, effective October 26, 2005.3.13
(33)
    
    Certificate of Amendment to Articles of Incorporation of Halo Technology Holdings, Inc., as
filed with the Secretary of State of the State of Nevada, effective April 2, 2006.4.1 (1)
    
    Specimen Certificate Representing shares of Common Stock, $.00001 par value per share, of WARP
Technology Holdings, Inc.4.2 (13)
    
    Form of Bridge Note issued
October 13, 2004 by Warp Technology Holdings, Inc.4.3 (14)
    
    Form of Amended and Restated Subordinated Secured Promissory Note.4.4 (14)
    
    Form of Senior Secured Promissory Note.4.5 (14)
    
    Form of Initial Warrant and Additional Warrant4.6 (14)
    
    Form of Subordinated Secured Promissory Note4.7 (14)
    
    Form of Warrant4.8 (14)
    
    Form of Convertible Promissory Note4.9 (19)
    
    $1,000,000 Promissory Note, dated July 6, 2005, to Bristol Technology, Inc.4.10 (20)
    
    Form of Promissory Note4.11 (20)
    
    Warrant Certificate, Form of Fact of Warrant Certificate, Warrants to Purchase Common Stock of
Warp
 42




---



##### Table of Contents



Exhibit No.
    
    Description of ExhibitTechnology Holdings, Inc.4.12 (24)
    
    Form of Promissory Note first issued October 21, 2005.4.13 (24)
    
    Form of Warrant, first issued October 21, 2005, to purchase shares of Common Stock, par value
$0.00001 per share, of the Company.4.14
(30)
    
    Form of Note first issued January 11, 20064.15
(31)
    
    Form of Note first issued January 27, 2006.4.16
(42)
    
    Form of Note first issued
October 12, 2006.4.17
(42)
    
    Form of Warrant first issued
October 12, 2006.10.1 (10)
    
    Series B-2 Stock Purchase
Agreement dated as of August 4, 2004 between and among Warp
Technology Holdings, Inc. and the Persons listed on Schedule 1.01 thereto.10.3 (3)
    
    Form of the Financial Consulting Agreement dated March 5, 2002 between WARP Solutions,
Inc. and Lighthouse Capital, Inc.10.4 (3)
    
    Form of the Financial Consulting Agreement dated May 16, 2002 between Warp Technology Holdings, Inc. and
Lighthouse Capital, Inc.10.5 (3)
    
    Form of Master Distributor Agreement between Macnica Networks Company and WARP Solutions,
Inc. dated as of August 1, 2002.10.6 (3)
    
    Form of Master Distributor Agreement between CDI Technologies, Inc. and WARP Solutions,
Inc. dated as of September 1, 2002.10.7 (4)
    
    Put and Call Agreement dated as of
December , 2002 by and among Warp Technology
Holdings, Inc. and all of the Shareholders of Spider Software Inc.10.8 (5)
    
    The WARP Technology Holdings, Inc. 2002 Stock Incentive Plan.10.9 (5)
    
    Form of Stock Option Grant agreement for options granted pursuant to The WARP Technology
Holdings, Inc. 2002 Stock Incentive Plan.10.10 (5)
    
    Form of Strategic Alliance Agreement dated as of April 7, 2003 between Mirror Image
Internet, Inc. and WARP Solutions, Inc.10.11 (5)
    
    Form of iMimic/OEM Software License Agreement dated April 2003 between iMimic Networking,
Inc. and WARP Technology Holdings, Inc.10.12 (6)
    
    Form of Consulting Agreement between WARP Technology Holdings, Inc. and Dr. David Milch
dated as of August 1, 2003.10.13 (8)
    
    Form of Consulting Agreement between WARP Technology Holdings, Inc. and Mr. Steven Antebi
which was executed by the parties thereto on December 23, 2003.10.14 (8)
    
    Form of Employment Agreement between WARP Technology Holdings, Inc. and Mr. Malcolm Coster
which was executed by the parties thereto on November 17, 2003.10.15 (9)
    
    Form of Consulting Agreement between WARP Technology Holdings, Inc. and Mr. Noah Clark
which was executed by the parties thereto on March 29, 2004.10.16 (10)
    
    Series B-2 Preferred Stock Purchase Agreement entered into as of August 4, 2004 between
and among Warp Technology Holdings, Inc. and the Persons listed on Schedule 1.01 thereto.10.17 (10)
    
    Stockholders Agreement, dated as of
August 4, 2004, between and among Warp Technology Holdings, Inc., the holders of
the Series B-2 Preferred Stock and such other Stockholders as named therein.10.18 (11)
    
    Form of Employment Agreement for Ron Bienvenu and Warp Technology Holdings, Inc. made as of August 4, 200410.20 (11)
    
    Form of Employment Agreement for Ernest Mysogland and Warp Technology Holdings, Inc. made as of August 4, 200410.22 (11)
    
    Form of Incentive Stock Option Agreement for Ron Bienvenu to purchase an aggregate of
15,068,528
 43




---



##### Table of Contents



Exhibit No.
    
    Description of Exhibitshares of Common Stock of Warp Technology Holdings, Inc., par value $0.00001 per share.10.24 (11)
    
    Form of Incentive Stock Option Agreement for Ernest Mysogland to purchase an aggregate of
5,022,843 shares of Common Stock of Warp Technology Holdings, Inc., par value $0.00001 per share.10.26 (11)
    
    Form of Consulting Agreement between WARP Technology Holdings, Inc. and ISIS Capital
Management, LLC which was executed by the parties thereto on August 4, 2004.10.27
(11)
    
    Form of Stock Option Agreement between WARP Technology Holdings, Inc. and ISIS Capital
Management, LLC which was executed by the parties thereto on August 4, 2004.10.30(13)
    
    Letter agreement dated September 13, 2004 between WARP Technology Holdings, Inc. and
Griffin Securities, Inc. for Griffin to act on a best efforts basis as a non-exclusive
financial advisor and placement agent for the Client in connection with the structuring,
issuance, and sale of debt and equity securities for financing purposes.10.31(13)
    
    Purchase Agreement Assignment and Assumption as of October 13, 2004, by and between ISIS
Capital Management, LLC and WARP Technology Holdings, Inc.10.32(13)
    
    Financial Advisory/Investment Banking Agreement dated September 20, 2004 between WARP
Technology Holdings, Inc. and Duncan Capital LLC10.33(14)
    
    Amendment No. 2 to Extension Agreement by and between
Warp Technology Holdings, Inc. and Gupta Holdings, LLC.10.34
(14)
    
    Amendment No. 3 to Extension Agreement by and between
Warp Technology Holdings, Inc. and Gupta Holdings, LLC10.35
(14)
    
    Amendment to Membership Interest Purchase Agreement made and entered into as of
January 31, 2005, by and between
Warp Technology Holdings, Inc. and Gupta Holdings, LLC10.36
(14)
    
    Form of Series C Subscription Agreement entered into January 31,
2005 by and between
Warp Technology Holdings, Inc. and the Investors as identified therein.10.37
(14)
    
    Investors Agreement entered into the 31st day of January,
2005 by and among Warp Technology Holdings, Inc.,
and the persons listed on Exhibit A thereto.10.38
(14)
    
    Senior Note and Warrant Purchase Agreement, as of January 31, 2005, by and among
Warp Technology Holdings, Inc. and the Purchasers identified therein.10.39
(14)
    
    Subordinated Note and Warrant Purchase Agreement, as of
January 31, 2005, by and among
Warp Technology Holdings, Inc. and the Purchasers identified therein.10.40
(14)
    
    Senior Security Agreement, dated as of January 31, 2005, between
Warp Technology & Holdings, Inc. and
Collateral Agent (as defined therein).10.41
(14)
    
    Senior Security Agreement, dated as of
January 31, 2005, between Warp Solutions, Inc. and
Collateral Agent (as defined therein).10.42
(14)
    
    Senior Security Agreement, dated as of January 31, 2005,
between Gupta Technologies, LLC
and Collateral Agent (as defined therein).10.43
(14)
    
    Senior Guaranty, dated as of January 31, 2005, between Warp Solutions, Inc. and
Collateral Agent (as defined therein).10.44
(14)
    
    Senior Guaranty, dated as of January 31, 2005, between Gupta Technologies, LLC and
Collateral Agent (as defined therein).10.45
(14)
    
    Subordinated Security Agreement, dated as of
January 31, 2005, between Warp Technology Holdings, Inc. and
Collateral Agent (as defined therein).10.46
(14)
    
    Subordinated Subsidiary Security Agreement, dated as of January 31, 2005, between Warp
Solutions, Inc. and Collateral Agent (as defined therein).10.47
(14)
    
    Subordinated Subsidiary Security Agreement, dated as of January 31, 2005, between Gupta
Technologies, LLC and Collateral Agent (as defined therein).
 44




---



##### Table of Contents



Exhibit No.
    
    Description of Exhibit10.48
(14)
    
    Subordinated Guaranty, dated as of January 31, 2005, between Warp Solutions, Inc. and
Collateral Agent (as defined therein).10.49 (14)
    
    Subordinated Guaranty, dated as of January 31, 2005,
between Gupta Technologies, LLC and
Collateral Agent (as defined therein).10.50 (14)
    
    Intercreditor and Subordination Agreement dated as of
January 31, 2005, by and among: the
Subordinated Noteholders, the Senior Noteholders,
Warp Technology Holdings, Inc., Warp Solutions, Inc., Gupta
Technologies, LLC, and the Collateral Agent (as such terms are defined therein).10.51 (14)
    
    Collateral Agency Agreement made as of January 31, 2005 by and among the Collateral Agent
(as defined therein) and the Noteholders (as defined therein).10.52 (14)
    
    Post Closing Agreement, dated as of January 31, 2005, by and among the Credit Parties and
the Collateral Agent (as such terms are defined therein).10.53 (15)
    
    Separation Agreement, dated as of March 3, 2005, by and between
Warp Technology Holdings, Inc. and Gus Bottazzi.10.54 (18)
    
    Letter Agreement dated October 31, 2003 by and between Gupta Technologies, LLC and Jeffrey
L. Bailey.10.55 (18)
    
    Letter Agreement dated August 4, 2004 by and between Gupta Technologies, LLC and Jeffrey
Bailey, as amended January 1, 2005.10.56 (18)
    
    Premium International Distribution Agreement dated January 1, 2004 by and between ADN
Distribution, GmbH and Gupta Technologies, LLC.10.57 (18)
    
    Premium International Distribution Agreement dated March 1, 2005 by and between Scientific
Computers and Gupta Technologies, LLC.10.58 (18)
    
    Premium International Distribution Agreement dated January 1, 2004 by and between NOCOM AB
and Gupta Technologies, LLC, as amended January 1, 2005.10.59 (18)
    
    Premium International Distribution Agreement dated October 1, 2003 by and between Sphinx CST
and Gupta Technologies, LLC, as amended October 1, 2004.10.60 (18)
    
    Premium International Distribution Agreement dated March 24, 2004 by and between Xtura B.V.
and Gupta Technologies, LLC.10.61 (18)
    
    OEM Software License Agreement dated September 29, 1994 by and between United Parcel Service
General Services Co. and Gupta Technologies, LLC, as amended September 8, 1995, September
30, 1999, December 21, 1999, March 23, 2001, and December 31, 2004.10.62 (18)
    
    Service Agreement dated March 27, 2002 by and between Offshore Digital Services Inc., DBA
Sonata and Gupta Technologies, LLC, as amended March 28, 2003, July 21, 2003, and March 28,
2004.10.63 (18)
    
    Services Agreement dated September 20, 2004 by and between CodeWeavers, Inc. and Gupta
Technologies, LLC.10.64 (18)
    
    OEM Product Agreement dated September 20, 2004 by and between CodeWeavers, Inc. and Gupta
Technologies, LLC.10.65 (18)
    
    Qt Commercial License Agreement for Enterprise Edition dated as of December 15, 2004 by and
between Trolltech Inc. and Gupta Technologies, LLC.10.66 (18)
    
    OEM License Agreement dated January 1, 2004 by and between Graphics Server Technologies,
L.P. and Gupta Technologies, LLC.
 45




---



##### Table of Contents



Exhibit No.
    
    Description of Exhibit10.67
(18)
    
    Shrinkwrap software license agreement with Data Techniques, Inc. for the ImageMan software product.10.68 (18)
    
    Shrinkwrap software license agreement with Rogue Wave Software Inc. for the Rogue Wave Stingray
software product.10.69 (18)
    
    Lease Agreement dated July 19, 2001 by and between Westport Joint Venture and Gupta Technologies,
LLC, together with amendments thereto.10.70 (18)
    
    Stock Purchase Agreement by and among WARP Technology Holdings, Inc., Bristol Technology, Inc. and
Kenosia Corporation, dated June 10, 2005.10.71 (19)
    
    Pledge and Security Agreement by
and among Warp Technology Holdings, Inc., Kenosia Corporation, and Bristol
Technology, Inc. dated July 6, 2005.10.72 (20)
    
    Credit Agreement dated August 2, 2005 between Warp Technology, Inc., the Subsidiaries of the
Company, Fortress Credit Corp., as Original Lender and Agent10.73 (20)
    
    Agreement regarding issuance of warrant certificates dated as of August 2, 2005 between Warp
Technology Holdings, Inc., and Fortress Credit Corp.10.74 (20)
    
    Security Agreement dated as of August 2, 2005 between Warp Technology Holdings, Inc. and
Fortress Credit Corp.10.75 (20)
    
    Stock Pledge Agreement dated as of August 2, 2005 between Warp Technology Holdings, Inc. and
Fortress Credit Corp.10.76 (20)
    
    Pledge Agreement dated as of August 2, 2005 between Warp Technology Holdings, Inc. and Fortress
Credit Corp.10.77 (20)
    
    Intercreditor and Subordination Agreement dated as of August 2, 2005 between Warp Technology
Holdings, Inc, the Subsidiaries of Warp Technology Holdings, Inc., the Financial Institutions,
the Holders of Subordinated Notes and Fortress Credit Corp.10.78 (20)
    
    Deed dated August 1, 2005 between Gupta Technologies, LLC and Fortress Credit Corp.10.79 (20)
    
    Deed dated August 2, 1005 between Gupta Technologies Limited and Fortress Credit Corp.10.80 (20)
    
    Deed dated August 2, 2005 between Warp Solutions Limited and Fortress Credit Corp.10.81 (20)
    
    Deed dated August 2, 1005 between Gupta Technologies, LLC and Fortress Credit Corp.10.82 (20)
    
    Deed dated August 2, 2005 between Warp Solutions, Inc. and Fortress Credit Corp.10.83 (20)
    
    Security Trust Agreement dated August , 2005 between Fortress Credit Corp., Fortress Credit
Opportunities I LP, Finance Parties and Security Grantors10.84 (21)
    
    Share Pledge Agreement dated August 2, 2005 between Gupta Technologies LLC, Fortress Credit Corp.,
Fortress Credit Opportunities I LP and Finance Parties10.85 (21)
    
    Commercial Lease dated as of August 29, 2005 by and between Railroad Avenue LLC and Warp
Technology Holdings, Inc.10.86 (22)
    
    Purchase Agreement dated as of September 12, 2005 by and between Warp Technology Holdings, Inc.,
Platinum Equity, LLC, Energy TRACS Acquisition Corp. and Milgo Holdings, LLC.10.87 (22)
    
    Merger Agreement dated as of September 12, 2005 by and between Warp Technology Holdings, Inc.,
TAC/Halo, Inc., Tesseract Corporation and Platinum Equity, LLC10.88 (23)
    
    Promissory Note dated September 20, 2005 whereby Warp Technology Holdings, Inc. promises to pay to
the order of DCI Master LDC in the principal amount of $500,000
 46




---



##### Table of Contents



Exhibit No.
    
    Description of Exhibit10.89
(23)
    
    Warrant to purchase 181,818 shares of common stock, par value $0.00001 per share issued to DCI
Master LDC10.90 (25)
    
    Halo Technology Holdings 2005 Equity Incentive Plan10.91 (25)
    
    Form of Employee Incentive Stock Option Agreement under Halo Technology Holdings 2005 Equity Incentive
Plan10.92 (25)
    
    Form of Non-Qualified Stock Option Agreement under Halo Technology Holdings 2005 Equity Incentive Plan10.93 (25)
    
    Fiscal 2006 Halo Senior Management Incentive Plan10.94 (26)
    
    Amendment No. 1 to Merger Agreement, dated as of October 26, 2005 among Platinum Equity, LLC, Warp
Technology Holdings, Inc., TAC/Halo, Inc., TAC/HALO, LLC and Tesseract Corporation.10.95 (26)
    
    Investors Agreement, dated October 26, 2005 by and among Warp Technology Holdings, Inc. and Platinum
Equity, LLC.10.96 (26)
    
    Promissory Note of Warp Technology Holdings, Inc. dated October 26, 2005 in the amount of $1,750,000.10.97 (26)
    
    Amendment Agreement No. 1 between Warp Technology Holdings, Inc., Fortress Credit Opportunities I LP and
Fortress Credit Corp. dated October 26, 2005.10.98 (26)
    
    Intercreditor and Subordination Agreement between Warp Technology Holdings, Inc., the Subsidiaries of
Warp Technology Holdings, Inc., the Financial Institutions listed in Part 2 of Schedule 1, the Holdings
of Subordinated Notes listed in Part 3 of Schedule 1 and Fortress Credit Corp., dated October 26, 2005.10.99 (26)
    
    Pledge Agreement between Warp Technology Holdings, Inc. and Fortress Credit Corp. dated October 26, 2005 regarding Process
Software, LLC.10.100 (26)
    
    Pledge Agreement between Warp Technology Holdings, Inc. and Fortress Credit Corp. dated October 26, 2005 regarding
ProfitKey International, LLC.10.101 (26)
    
    Pledge Agreement between Warp Technology Holdings, Inc. and Fortress Credit Corp. dated October 26, 2005 regarding and
TAC/Halo, LLC.10.102 (26)
    
    Stock Pledge Agreement between Warp Technology Holdings, Inc. and Fortress Credit Corp. dated October
26, 2005 regarding David Corporation.10.103 (26)
    
    Stock Pledge Agreement between Warp Technology Holdings, Inc. and Fortress Credit Corp. dated October
26, 2005 regarding Foresight Software, Inc.10.104 (26)
    
    Security Agreement between Process Software, LLC and Fortress Credit Corp. dated October 26, 2005.10.105 (26)
    
    Security Agreement between ProfitKey International, LLC and Fortress Credit Corp. dated October 26, 2005.10.106 (26)
    
    Security Agreement between TAC/Halo, LLC and Fortress Credit Corp. dated October 26, 200510.107 (26)
    
    Security Agreement between Foresight Software, Inc. and Fortress Credit Corp. dated October 26, 2005.10.108 (26)
    
    Security Agreement between David Corporation and Fortress Credit Corp. dated October 26, 2005.10.109 (27)
    
    Merger Agreement, dated as of December 19, 2005, by and among Warp Technology Holdings, Inc., EI
Acquisition, Inc., Empagio, Inc., and certain stockholders of Empagio.10.111 (28)
    
    Employment Agreement with Mark Finkel10.112 (28)
    
    Non-Competition Agreement with Mark Finkel10.113 (28)
    
    Confidentiality Agreement with Mark Finkel10.114 (29)
    
    Form of Agreement Regarding Warrants10.115 (30)
    
    Subscription Agreement entered into January 11, 200610.116 (31)
    
    Subscription Agreement first entered into January 27, 200610.117 (32)
    
    Merger Agreement, dated as of January 30, 2006, by and among Warp Technology Holdings, Inc., ECI
Acquisition, Inc., Executive Consultants, Inc., and certain stockholders of Executive Consultants, Inc.
 47




---



##### Table of Contents



Exhibit No.
    
    Description of Exhibit10.120 (34)
    
    Amendment and Consent, dated as of March 31, 2006 between Warp Technology Holdings, Inc. and Platinum
Equity, LLC.10.121 (35)
    
    Lease with 200 Railroad LLC. Certain exhibits and schedules to the Lease are referred to in the text
thereof and the Registrant agrees to furnish them supplementally to the Securities and Exchange
Commission upon request.10.122 (37)
    
    Form of Consent Agreement entered into by certain Series C Preferred Stockholders and Halo
Technology Holdings, Inc.10.126
(38)
    
    Form of Warrant issued July 21, 2006.10.127 (39)
    
    Agreement and Plan of Merger dated August 24, 2006 between Halo Technology Holdings,
Inc., Tenebril Acquisition Sub, Inc., Tenebril Inc., and Sierra Ventures.10.128 (39)
    
    Form of Promissory Note Issued to Tenebril Stockholders10.129(39)
    
    Investors Agreement dated August 24, 2006 between Halo Technology Holdings, Inc. and
the Investors named therein.10.130 (40)
    
    Purchase and Exchange Agreement between Halo and Unify Corporation dated September 13,
2006.10.131 (40)
    
    Termination Agreement among Halo, UCA Merger Sub, Inc., and Unify Corporation, dated
September 13, 2006.10.132 (41)
    
    Equity Purchase Agreement among Halo, the RevCast Stockholders and the Enterprises
Members dated September 15, 2006.10.133 (42)
    
    Subscription Agreement first entered into October 12, 2006.10.134 (42)
    
    Letter Agreement between the Company and Vision dated October 12, 2006.10.135 (42)    
    Form of Subordination Agreement among the Company, Fortress and other lenders.10.136 (42)
    
    Form of Intercreditor and Subordination Agreement with Existing Subordinated Lenders.10.137 (42)
    
    Letter Agreement with Fortress.10.138 (42)
    
    Consent Agreement with Subordinated Lenders10.139 (42)
    
    Amendment No. 2 to Fortress Credit Agreement21.1 (36)
    
    Subsidiaries of Halo Technology Holdings, Inc.
 
 (1)
    
    Incorporated herein by reference to the exhibits to WARP Technology Holdings, Inc.s
Registration Statement on Form SB-2 (File No. 333-46884).(2)
    
    Incorporated herein by reference to the exhibits to WARP Technology Holdings, Inc.s
Current Report on Form 8-K filed by the Company on September 3, 2002.(3)
    
    Incorporated herein by reference to the exhibits to the Annual Report on Form 10-KSB filed
by Warp Technology Holdings, Inc. on October 7, 2002.(4)
    
    Incorporated herein by reference to the exhibits to Warp Technology Holdings, Inc.s
Current Report on Form 8-K filed on January 27, 2003.(5)
    
    Incorporated by reference to the exhibits to the Quarterly Report on Form 10-QSB filed by
Warp Technology Holdings, Inc. on February 14, 2003. 48




---



##### Table of Contents



(6)
    
    Incorporated by reference to the exhibits to WARP Technology Holdings, Inc.s Annual
Report on Form 10-KSB filed by the Company on October 14, 2003.(7)
    
    Incorporated by reference to the exhibits to 3.6 to WARP Technology Holdings, Inc.s
Quarterly Report on Form 10-QSB filed by the Company on November 14, 2003.(8)
    
    Incorporated by reference to the exhibits to the Quarterly Report on Form 10-QSB filed by
the Company on February 12, 2004.(9)
    
    Incorporated by reference to the exhibits to the Quarterly Report on Form 10-QSB filed by
the Company on May 17, 2004.(10)
    
    Incorporated herein by reference to the exhibits to WARP Technology Holdings, Inc.s
Current Report on Form 8-K filed on August 20, 2004.(11)
    
    Incorporated herein by reference to the exhibits to WARP Technology Holdings, Inc.s
Annual Report on Form 10-KSB, filed on October 13, 2004.(12)
    
    Incorporated herein by reference to the exhibits to WARP Technology Holdings, Inc.s
Current Report on Form 8-K filed on November 12, 2004.(13)
    
    Incorporated herein by reference to the exhibits to WARP Technology Holdings, Inc.s
Quarterly Report on Form 10-QSB, filed on November 15, 2004.(14)
    
    Incorporated herein by reference to the exhibits to WARP Technology Holdings, Inc.s
Current Report on Form 8-K filed on February 4, 2005.(15)
    
    Incorporated herein by reference to the exhibits to WARP Technology Holdings, Inc.s
Current Report on Form 8-K filed on March 9, 2005.(16)
    
    Incorporated herein by reference to the exhibits to WARP Technology Holdings, Inc.s
Current Report on Form 8-K filed on April 1, 2005.(17)
    
    Incorporated herein by reference to the exhibits to WARP Technology Holdings, Inc.s
Current Report on Form 8-K filed on April 4, 2005.(18)
    
    Incorporated herein by reference to the exhibits to WARP Technology Holdings, Inc.s
Registration Statement on Form S-2 (File Number 333-123864)(19)
    
    Incorporated herein by reference to the exhibits to WARP Technology Holdings, Inc.s
Current Report on Form 8-K filed on July 11, 2005.(20)
    
    Incorporated herein by reference to the exhibits to WARP Technology Holdings, Inc.s
Current Report on Form 8-K filed on August 16, 2005.(21)
    
    Incorporated herein by reference to the exhibits to WARP Technology Holdings, Inc.s
Current Report on Form 8-K filed on September 2, 2005.(22)
    
    Incorporated herein by reference to the exhibits to WARP Technology Holdings, Inc.s
Current Report on Form 8-K filed on September 16, 2005.(23)
    
    Incorporated herein by reference to Warp Technology Holdings, Inc.s Current Report on
Form 8-K field on September 26, 2005.(24)
    
    Incorporated herein by reference to the second of Warp
Technology Holdings, Inc.s Current
Reports on Form 8-K filed on October 27, 2005.(25)
    
    Incorporated herein by reference to the third of Warp
Technology Holdings, Inc.s Current
Reports on Form 8-K filed on October 27, 2005.(26)
    
    Incorporated herein by reference to Warp Technology Holdings, Inc.s Current Report on Form
8-K filed on November 1, 2005. 49




---



##### Table of Contents



(27)
    
    Incorporated herein by reference to Warp Holdings, Inc.s Current Report on Form
8-K filed on December 23, 2005.(28)
    
    Incorporated herein by reference to Warp Technology Holdings, Inc.s Current Report on Form
8-K filed on January 4, 2006.(29)
    
    Incorporated herein by reference to Warp Technology Holdings, Inc.s Current Report on Form
8-K filed on January 6, 2006.(30)
    
    Incorporated herein by reference to Warp Technology Holdings, Inc.s Current Report on Form
8-K filed on January 18, 2006.(31)
    
    Incorporated herein by reference to Warp Technology Holdings, Inc.s Current Report on Form
8-K filed on February 2, 2006.(32)
    
    Incorporated herein by reference to Warp Technology Holdings, Inc.s Current Report on Form
8-K filed on February 3, 2006.(33)
    
    Incorporated herein by reference to Warp Technology Holdings, Inc.s Current Report on Form
8-K filed on March 31, 2006.(34)
    
    Incorporated herein by reference to Halo Technology Holdings, Inc.s Current Report on Form
8-K filed April 3, 2006.(35)
    
    Incorporated herein by reference to Halo Technology Holding, Inc.s Current Report on Form
8-K filed May 5, 2006.(36)
    
    Incorporated hererin by reference to the exhibits to the Quarterly Report on Form 10-QSB
filed by Halo Technology Holdings, Inc. on May 15, 2006.(37)
    
    Incorporated herein by reference to Halo Technology Holdings, Inc.s Current Report on Form
8-K filed on May 19, 2006.(38)
    
    Incorporated herein by reference to Halo Technology Holdings, Inc.s Current Report on Form
8-K filed on July 27, 2006.(39)
    
    Incorporated herein by reference to Halo Technology Holdings, Inc.s Current Report on Form
8-K filed on August 30, 2006.(40)
    
    Incorporated herein by reference to Halo Technology Holdings, Inc.s Current Report on Form
8-K filed on September 19, 2006.(41)
    
    Incorporated herein by reference to Halo Technology Holdings, Inc.s Current Report on Form
8-K filed on September 21, 2006.(42)
    
    Incorporated herein by reference to Halo Technology Holdings, Inc.s Current Report on Form
8-K filed on October 13, 2006. 50




---



##### Table of Contents



SIGNATURES
   HALO TECHNOLOGY HOLDINGS, INC.By:
    
    /S/ Rodney A. Bienvenu, Jr.

Rodney A. Bienvenu, Jr.,CEO, Chairman as Registrants dulyauthorized officer
  By:
    
    /S/ Rodney A. Bienvenu, Jr.

Rodney A. Bienvenu, Jr.,Principal Executive OfficerDate: October 13, 2006By:
    
    /S/ Mark FinkelMark FinkelPrincipal Financial OfficerDate: October 13, 2006By:
    
    /S/ Takeshi TaniguchiTakeshi TaniguchiController or Principal Accounting OfficerDate: October 13, 2006By:
    
    /S/ John A. BoehmerJohn A. BoehmerDirectorDate: October 13, 2006By:
    
    /S/ David M. HowittDavid M. HowittDirectorDate: October 13, 2006By:John L. KellyDirectorDate: October 13, 2006By:
    
    /S/ Gordon O. RapkinGordon O. RapkinDirectorDate: October 13, 2006
 51




---



##### Table of Contents



EXHIBIT INDEX
  Exhibit No.
    
    Description of Exhibit21.1
    
    Subsidiaries of the Company.31.1
    
    Certification of Periodic Report pursuant to Section 302 of the Sarbanes Oxley Act of 2002.31.2
    
    Certification of Periodic Report pursuant to Section 302 of the Sarbanes Oxley Act of 2002.32.1
    
    Certification pursuant to 18 U.S.C., Section 1350, as adopted pursuant to Section 906 of
the Sarbanes Oxley Act of 2002.
 52




---



##### Table of Contents



INDEX TO FINANCIAL STATEMENTS
 Report of Independent Registered Public Accounting Firm
    
    F-2Consolidated Balance Sheets
    
    F-3Consolidated Statements of Operations
    
    F-4Consolidated Statements of Stockholders Equity
    
    F-5 - F-9Consolidated Statements of Cash Flows
    
    F-10Notes to Consolidated Financial Statements
    
    F-11
 F-1




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
     
  F-2




---



##### Table of Contents



Halo Technology Holdings, Inc.
 Consolidated Balance Sheets
 Year Ended
    
    
    Year EndedJune 30, 2006
    
    
    June 30, 2005AssetsCurrent Assets:Cash and cash equivalents
    
    $
    853,901
    
    
    $
    1,548,013Marketable securities
    
    
    9,750
    
    
    
    Accounts receivable, net of allowance for doubtful of $124,063 and $30,845 respectively
    
    
    4,086,772
    
    
    
    2,024,699Due from Platinum Equity, LLC
    
    
    302,500
    
    
    
    Prepaid expenses and other current assets
    
    
    693,255
    
    
    
    409,496Total current assets
    
    
    5,946,178
    
    
    
    3,982,208Property and equipment, net
    
    
    432,909
    
    
    
    223,025Deferred financing costs, net
    
    
    1,492,096
    
    
    
    476,876Intangible assets, net of accumulated amortization of $3,551,075 and $756,064 respectively
    
    
    23,544,108
    
    
    
    15,678,736Goodwill
    
    
    28,138,396
    
    
    
    7,055,264Investment and other assets
    
    
    149,851
    
    
    
    884,379Total assets
    
    $
    59,703,538
    
    
    $
    28,300,488Liabilities and stockholders equityCurrent liabilities:Current portion of senior notes payable
    
    $
    1,333,126
    
    
    $
    Note payable to Platinum Equity, LLC
    
    
    1,750,000
    
    
    
    Notes payable
    
    
    3,280,721
    
    
    
    Accounts payable
    
    
    2,255,697
    
    
    
    872,433Accrued expenses
    
    
    5,881,491
    
    
    
    3,752,731Deferred revenue
    
    
    13,405,832
    
    
    
    3,392,896Due to ISIS
    
    
    1,243,864
    
    
    
    1,293,534Total current liabilities
    
    
    29,150,731
    
    
    
    9,311,594Subordinate notes payable
    
    
    1,770,833
    
    
    
    2,020,835Senior notes payable
    
    
    20,752,493
    
    
    
    5,687,500Other long term liabilities
    
    
    1,000,009
    
    
    
    43,275Series C warrants liabilities
    
    
    3,720,893
    
    
    
    40,440,024Senior and Sub warrants liabilities
    
    
    1,333,942
    
    
    
    14,889,600Other warrants liabilities
    
    
    2,566,319
    
    
    
    Total liabilities
    
    
    60,295,220
    
    
    
    72,392,828Commitments and contingenciesMandatory redeemable Series D Preferred Stock: $.00001 par value; 8,863,636 shares authorized,
7,045,454 issued and outstanding (Liquidation value  $7,750,000)
    
    
    7,750,000
    
    
    
    Stockholders equity (deficit):Preferred stock (Canadian subsidiary)
    
    
    2
    
    
    
    2Series C Preferred Stock: $.00001 par value; 16,000,000 shares authorized, 14,193,095 issued
and outstanding (Liquidation value  $14,193,095)
    
    
    
    
    
    
    14,193,095Shares of Common Stock to be issued for accrued dividends on Series C Preferred Stock
    
    
    
    
    
    
    212,897Shares of Common Stock to be issued for accrued interest on subordinated debt
    
    
    41,667
    
    
    
    Common stock: $.00001 par value; 150,000,000 shares authorized, 26,723,247 and 3,110,800 shares
issued and outstanding respectively
    
    
    267
    
    
    
    31Additional paid-in-capital
    
    
    86,265,258
    
    
    
    55,036,831Deferred compensation
    
    
    
    
    
    
    (970,711
    )Accumulated other comprehensive loss
    
    
    (43,528
    )
    
    
    (105,262
    )Accumulated deficit
    
    
    (94,605,348
    )
    
    
    (112,459,223
    )Total stockholders equity (deficit)
    
    
    (8,341,682
    )
    
    
    (44,092,340
    )Total liabilities and stockholders equity (deficit)
    
    $
    59,703,538
    
    
    $
    28,300,488
  F-3




---



##### Table of Contents



Halo Technology Holdings, Inc.
 Consolidated Statements of Operations
 Year Ended
    
    
    Year EndedJune 30, 2006
    
    
    June 30, 2005RevenueLicenses
    
    $
    5,823,440
    
    
    $
    2,986,752Services
    
    
    19,385,555
    
    
    
    2,137,170Total revenues
    
    
    25,208,995
    
    
    
    5,123,922Cost of revenueCost of licenses
    
    
    1,301,761
    
    
    
    449,073Cost of services
    
    
    4,062,777
    
    
    
    396,490Total cost of revenues
    
    
    5,364,538
    
    
    
    845,563Gross Profit
    
    
    19,844,457
    
    
    
    4,278,359Product development
    
    
    6,145,413
    
    
    
    1,589,099Sales, marketing, and business development
    
    
    7,507,661
    
    
    
    3,652,117General and administrative
    
    
    15,127,506
    
    
    
    4,690,743Late filing penalty
    
    
    (1,033,500
    )
    
    
    1,033,500Intangible impairment
    
    
    
    
    
    
    62,917Goodwill impairment
    
    
    5,200,000
    
    
    
    3,893,294Loss before interest and fair value gain (loss) on warrants
    
    
    (13,102,623
    )
    
    
    (10,643,311
    )Fair value gain (loss) on warrants revaluation
    
    
    41,962,169
    
    
    
    (32,011,536
    )Interest expense
    
    
    (9,302,539
    )
    
    
    (8,506,058
    )Income (loss) before income taxes
    
    
    19,557,007
    
    
    
    (51,160,905
    )Income taxes
    
    
    (181,655
    )
    
    
    (97,945
    )Net income (loss)
    
    $
    19,375,352
    
    
    $
    (51,258,850
    )Computation of gain (loss) applicable to common shareholdersNet income (loss) before beneficial conversion and preferred dividends
    
    $
    19,375,352
    
    
    $
    (51,258,850
    )Beneficial conversion and preferred dividends
    
    
    (1,521,477
    )
    
    
    (21,503,678
    )Income (loss) attributable to common stockholders
    
    $
    17,853,875
    
    
    $
    (72,762,528
    )Basis net income (loss) per share attributable to common stock
    
    $
    3.21
    
    
    $
    (38.06
    )Diluted net income (loss) per share attributable to common stock
    
    $
    1.31
    
    
    $
    (38.06
    )Weighted-average shares outstanding  basic
    
    
    5,566,364
    
    
    
    1,912,033Weighted-average shares outstanding  diluted
    
    
    14,887,182
    
    
    
    1,912,033
  F-4




---



##### Table of Contents



Halo Technology Holdings, Inc.
 Consolidated Statements of Stockholders Equity
 Years Ended June 30,2006
    
    
    2005Shares
    
    
    Amounts
    
    
    Shares
    
    
    AmountsPreferred stock (Canadian Subsidiary)Balance, beginning of year
    
    
    1,710
    
    
    $
    2
    
    
    
    4,264
    
    
    $
    4Conversion to common stock
    
    
    
    
    
    
    
    
    
    
    (2,554
    )
    
    
    (2
    )Balance, end of year
    
    
    1,710
    
    
    $
    2
    
    
    
    1,710
    
    
    $
    2Series B Preferred StockBalance, beginning of year
    
    
    
    
    
    $
    
    
    
    
    2,915
    
    
    $
    2,915,100Series B Preferred Stock issued
    
    
    
    
    
    
    
    
    
    
    570
    
    
    
    570,000Conversion to common stock
    
    
    
    
    
    
    
    
    
    
    (3,485
    )
    
    
    (3,485,100
    )Balance, end of year
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    Series B-2 Preferred StockBalance, beginning of year
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    Series B-2 Preferred Stock issued
    
    
    
    
    
    
    
    
    
    
    1,600
    
    
    
    1,600Conversion to common stock
    
    
    
    
    
    
    
    
    
    
    (1,600
    )
    
    
    (1,600
    )Balance, end of year
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    Series C Preferred StockBalance, beginning of year
    
    
    14,193,095
    
    
    $
    14,193,095
    
    
    
    
    
    
    $
    Conversion from Series C Notes and Bridge
Notes
    
    
    
    
    
    
    
    
    
    
    3,200,000
    
    
    
    10,993,095Series C Preferred Stock issued
    
    
    
    
    
    
    
    
    
    
    10,993,095
    
    
    
    3,200,000Conversion to common stock
    
    
    (14,193,095
    )
    
    
    (14,193,095
    )
    
    
    
    
    
    
    Balance, end of year
    
    
    
    
    
    $
    
    
    
    
    14,193,095
    
    
    $
    14,193,095Shares of common stock to be issuedBalance, beginning of year
    
    
    
    
    
    $
    212,897
    
    
    
    
    
    
    $
    392,939Preferred stock dividends issued
    
    
    
    
    
    
    (212,897
    )
    
    
    
    
    
    
    (180,042
    )Sub debt interest accrued
    
    
    
    
    
    
    41,667
    
    
    
    
    
    
    
    Balance, end of year
    
    
    
    
    
    $
    41,667
    
    
    
    
    
    
    $
    212,897Common stockBalance, beginning of year
    
    
    3,110,800
    
    
    $
    31
    
    
    
    971,115
    
    
    $
    10Conversion of preferred stock
    
    
    14,193,095
    
    
    
    142
    
    
    
    2,115,160
    
    
    
    21Preferred stock dividends issued
    
    
    1,379,444
    
    
    
    14
    
    
    
    
    
    
    
    Exercise of warrants
    
    
    6,064,822
    
    
    
    61
    
    
    
    
    
    
    
    Common stock issued
    
    
    1,975,086
    
    
    
    19
    
    
    
    24,525
    
    
    
    Balance, end of year
    
    
    26,723,247
    
    
    $
    267
    
    
    
    3,110,800
    
    
    $
    31Additional paid in capitalBalance, beginning of year
    
    
    
    
    
    $
    55,036,831
    
    
    
    
    
    
    $
    40,122,777Common stock issued
    
    
    
    
    
    
    28,548,783
    
    
    
    
    
    
    
    8,195,287Issuance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (230,000
    )Warrants issued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,196,618Beneficial conversion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,026,230
 F-5




---



##### Table of Contents



Years Ended June 30,2006
    
    
    2005Shares
    
    
    Amounts
    
    
    Shares
    
    
    AmountsReclassification of mandatory preferred stock
    
    
    
    
    
    
    2,606,817Stock options
    
    
    
    
    
    
    946,950
    
    
    
    
    
    
    
    725,919FAS 123R adjustment to reverse balance
    
    
    
    
    
    
    (874,123
    )
    
    
    
    
    
    
    Balance, end of year
    
    
    
    
    
    $
    86,265,258
    
    
    
    
    
    
    $
    55,036,831Deferred compensationBalance, beginning of year
    
    
    
    
    
    $
    (970,711
    )
    
    
    
    
    
    $
    (891,833
    )Stock options issued
    
    
    
    
    
    
    (138,280
    )
    
    
    
    
    
    
    (1,052,919
    )Stock compensation expense
    
    
    
    
    
    
    234,868
    
    
    
    
    
    
    
    647,041Forfeiture of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    327,000FAS123(R) adjustment to reverse balance
    
    
    
    
    
    
    874,123
    
    
    
    
    
    
    
    Balance, end of year
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    (970,711
    )Accumulated other comprehensive income (loss)Balance, beginning of year
    
    
    
    
    
    $
    (105,262
    )
    
    
    
    
    
    $
    (4,990
    )Net change in unrealized losses on marketable securities
    
    
    
    
    
    
    (30,828
    )
    
    
    
    
    
    
    Foreign currency translation adjustment
    
    
    
    
    
    
    92,562
    
    
    
    
    
    
    
    (100,272
    )Balance, end of year
    
    
    
    
    
    $
    (43,528
    )
    
    
    
    
    
    $
    (105,262
    )Accumulated deficitBalance, beginning of year
    
    
    
    
    
    $
    (112,459,223
    )
    
    
    
    
    
    $
    (39,696,695
    )Net income (loss)
    
    
    
    
    
    
    19,375,352
    
    
    
    
    
    
    
    (51,258,850
    )Preferred stock dividends
    
    
    
    
    
    
    (1,521,477
    )
    
    
    
    
    
    
    (2,484,360
    )Beneficial conversion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,026,230
    )Warrants issued to Series C Preferred
Stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,993,088
    )Balance, end of year
    
    
    
    
    
    $
    (94,605,348
    )
    
    
    
    
    
    $
    (112,459,223
    )Total stockholders equity
    
    
    
    
    
    $
    (8,341,682
    )
    
    
    
    
    
    $
    (44,092,340
    )Annual Comprehensive income (loss)Net income (loss)
    
    
    
    
    
    $
    19,375,352
    
    
    
    
    
    
    $
    (51,258,850
    )Other comprehensive income (loss):Net change in unrealized losses on marketable securities
    
    
    
    
    
    
    (30,828
    )
    
    
    
    
    
    
    Foreign currency translation adjustment
    
    
    
    
    
    
    92,562
    
    
    
    
    
    
    
    (100,272
    )Other comprehensive income (loss)
    
    
    
    
    
    
    61,734
    
    
    
    
    
    
    
    (100,272
    )Comprehensive income (loss)
    
    
    
    
    
    $
    19,437,086
    
    
    
    
    
    
    $
    (51,359,122
    )
  F-6




---



##### Table of Contents



Halo Technology Holdings, Inc.
 Consolidated Statements of Cash Flows
 Year Ended
    
    
    Year EndedJune 30, 2006
    
    
    June 30, 2005Operating activitiesNet income (loss)
    
    $
    19,375,352
    
    
    $
    (51,258,850
    )Adjustments to reconcile net income (loss) to net cash provided by (used for)
in operating activities:Depreciation and amortization
    
    
    2,932,796
    
    
    
    991,717Provision for doubtful accounts
    
    
    62,255
    
    
    
    Stock-based compensation, consulting and other fees
    
    
    
    
    
    
    1,542,686Fair value (gain) loss on warrants revaluation
    
    
    (41,962,169
    )
    
    
    32,011,536Non cash compensation
    
    
    1,110,660
    
    
    
    Non cash interest expense
    
    
    5,815,355
    
    
    
    7,198,349Loss on disposal of property and equipment
    
    
    17,997
    
    
    
    Gain on sale of Foresight
    
    
    (12,072
    )
    
    
    Goodwill and impairment charges
    
    
    5,200,000
    
    
    
    3,956,211Changes in operating assets and liabilities, net of effects of acquired business:Accounts receivable
    
    
    273,192
    
    
    
    610,869Due from Platinum Equity, LLC
    
    
    135,000
    
    
    
    Prepaid expenses and other current assets
    
    
    (277,186
    )
    
    
    69,096Accounts payable and accrued expenses
    
    
    771,415
    
    
    
    230,837Deferred revenue
    
    
    6,690,518
    
    
    
    1,261,903Net cash provided by (used for) operating activities
    
    
    133,113
    
    
    
    (3,385,646
    )Investing activitiesPurchase of property and equipment
    
    
    (246,241
    )
    
    
    Purchase of marketable securities
    
    
    (40,577
    )
    
    
    Gupta acquisition, net of cash acquired $742,915
    
    
    
    
    
    
    (15,007,085
    )Tesseract, Process and Affiliates acquisition, net of cash acquired of $632,899
    
    
    (16,345,102
    )
    
    
    ECI acquisition, net of cash acquired of $20,871
    
    
    (572,700
    )
    
    
    Kenosia acquisition deposit
    
    
    
    
    
    
    (801,750
    )Kenosia acquisition, net of cash acquired of $6,125
    
    
    (507,145
    )
    
    
    Cash proceeds from Empagio, Inc. seller, net of cash acquired of $36,224
    
    
    21,224
    
    
    
    Proceeds from sale of Foresight
    
    
    266,402
    
    
    
    Proceeds from sales of property and equipment
    
    
    1,689
    
    
    
    (40,610
    )Net cash used for investing activities
    
    
    (17,422,450
    )
    
    
    (15,849,445
    )Financing activitiesDeferred financing cost
    
    
    (1,726,486
    )
    
    
    Repayment of Subordinated notes
    
    
    (1,500,000
    )
    
    
    Repayment of Senior notes
    
    
    (6,939,500
    )
    
    
    Repayment of Promissory notes
    
    
    (616,452
    )
    
    
    Repayment of Bristol Technology, Inc. note
    
    
    (500,000
    )
    
    
    Repayment of Platinum Equity, LLC note
    
    
    (1,000,000
    )
    
    
    
 F-7




---



##### Table of Contents



Year Ended
    
    
    Year EndedJune 30, 2006
    
    
    June 30, 2005Proceeds from subordinated notes
    
    
    
    
    
    
    2,500,000Proceeds from senior notes
    
    
    25,000,000
    
    
    
    6,075,000Proceeds from promissory notes
    
    
    3,775,000
    
    
    
    Proceeds from issuance of preferred and common stock, net of issuance costs
    
    
    
    
    
    
    12,191,500Net cash provided by financing activities
    
    
    16,492,562
    
    
    
    20,766,500Effects of exchange rates on cash
    
    
    102,663
    
    
    
    (98,887
    )Net (decrease) increase in cash and cash equivalents
    
    
    (694,112
    )
    
    
    1,432,522Cash and cash equivalentsbeginning of period
    
    
    1,548,013
    
    
    
    115,491Cash and cash equivalentsend of period
    
    $
    853,901
    
    
    $
    1,548,013Supplemental disclosure of cash flow information:Income tax paid
    
    $
    167,891
    
    
    $
    241,017Interest paid
    
    $
    2,124,702
    
    
    $
    271,250Non-cash financing transactions:Fair value of stock issued in connection with acquisitions
    
    $
    2,428,854
    
    
    
    
 F-8




---



##### Table of Contents



Supplemental schedule of non-cash investing and financing activities
        Purchase price:Cash
    
    $
    1,247,175Transaction costs
    
    
    67,845Note Payable
    
    
    500,000Total purchase price
    
    
    1,815,020Fair Value of:Assets acquired
    
    
    (1,611,793
    )Liabilities assumed
    
    
    386,025Goodwill
    
    $
    589,252
  Purchase price:Cash
    
    $
    3,500,000Advances to Platinum made prior to September 30, 2005
    
    
    1,000,000Promissory Note and Working Capital Adjustment
    
    
    2,750,000Series D Preferred Stock
    
    
    9,265,908Transaction costs
    
    
    126,500Total purchase price
    
    
    16,642,408Fair Value of:Assets acquired
    
    
    (4,600,356
    )Liabilities assumed
    
    
    2,390,441Goodwill
    
    $
    14,432,493
  Purchase price:Cash
    
    $
    12,000,000Transaction costs
    
    
    351,000Total purchase price
    
    
    12,351,000Fair Value of:Assets acquired
    
    
    (8,102,073
    )Liabilities assumed
    
    
    4,614,263Goodwill
    
    $
    8,863,190
 F-9




---



##### Table of Contents



Purchase price:1,438,455 Common shares issued
    
    $
    1,869,992Cash received from seller
    
    
    (36,224
    )Transaction costs
    
    
    15,000Total purchase price
    
    
    1,848,768Fair Value of:Assets acquired
    
    
    (561,236
    )Liabilities assumed
    
    
    467,041Goodwill
    
    $
    1,754,573
  Purchase price:Cash
    
    $
    578,571330,688 Common shares issued
    
    
    558,863Transaction costs
    
    
    15,000Total purchase price
    
    
    1,152,434Fair Value of:Assets acquired
    
    
    (252,126
    )Liabilities assumed
    
    
    172,730Goodwill
    
    $
    1,073,038
  F-10




---



##### Table of Contents



Halo Technology Holdings, Inc.
 Notes to Consolidated Financial Statements
 Note 1. Organization, Merger, Description of Business and Basis of Presentation
         F-11




---



##### Table of Contents



Going Concern
   F-12




---



##### Table of Contents



Note 2. Summary of Significant Accounting Policies
 Principles of Consolidation
  Use of Estimates
  Marketable Securities
  Property and Equipment
  Revenue Recognition
      Cost of Revenue
  F-13




---



##### Table of Contents



Shipping and Handling Costs
  Reclassification.
  Cash Equivalents
  Intangible Assets and Goodwill
  
    
    Significant underperformance relative to expected historical or projected future operating results;
    
    Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and
    
    Significant negative industry or economic trends.
  Business Combinations and Deferred Revenue
    F-14




---



##### Table of Contents



Concentration of Risk
 Cash
  Accounts Receivable
  Product Development Costs
  Income Taxes
  Foreign Currency
  Deferred Financing Costs
  Net Income (Loss) Per Share
  F-15




---



##### Table of Contents



Year Ended
    
    
    Year EndedJune 30, 2006
    
    
    June 30, 2005Net income (loss)
    
    $
    19,375,352
    
    
    $
    (51,258,850
    )Preferred stock dividends on convertible stock
    
    
    (1,521,477
    )
    
    
    (21,503,678
    )Net income (loss) available to common stockholders for basic net
income (loss) per share
    
    $
    17,853,875
    
    
    $
    (72,762,528
    )Add back preferred stock dividends on convertible stock
    
    
    1,521,477
    
    
    
    Add back interest expense on convertible debt
    
    
    185,104
    
    
    
    Net income (loss) available to common stockholders for diluted net
income (loss) per share
    
    $
    19,560,456
    
    
    $
    (72,762,528
    )Weighted average common shares outstanding for basic net income
(loss) per common share
    
    
    5,566,364
    
    
    
    1,912,033Impact of dilutive stock options
    
    
    410,715
    
    
    
    Impact of dilutive warrants
    
    
    2,725,097
    
    
    
    Impact of assumed convertible debt conversion
    
    
    1,417,260
    
    
    
    Impact of assumed convertible preferred stock conversion
    
    
    4,767,746
    
    
    
    Total shares for diluted net income (loss) per common share
    
    
    14,887,182
    
    
    
    1,912,033Basic net income (loss) per common share
    
    $
    3.21
    
    
    $
    (38.06
    )Diluted net income (loss) per common share
    
    $
    1.31
    
    
    $
    (38.06
    )
  F-16




---



##### Table of Contents



Stock-Based Compensation
    Year Ended
    
    
    Year EndedJune 30, 2006
    
    
    June 30, 2005Net income (loss), as reported
    
    $
    19,375,352
    
    
    $
    (51,258,850
    )Add: Stock-based employee compensation expense included in reported
net income (loss), net of tax effects of $0
    
    
    832,946
    
    
    
    454,000Deduct: Stock-based employee compensation expense determined under
fair value method for all awards, net of tax effects of $0
    
    
    (1,725,326
    )
    
    
    (828,173
    )Net income (loss), pro forma
    
    $
    18,482,972
    
    
    $
    (51,633,023
    )Beneficial conversion and preferred dividends
    
    
    (1,521,477
    )
    
    
    (21,503,678
    )Net income (loss) attributable to common stockholders  pro forma
    
    $
    16,961,495
    
    
    $
    (73,136,701
    )Basic net income (loss) per share as reported
    
    $
    3.21
    
    
    $
    (38.06
    )Diluted net income (loss) per share as reported
    
    $
    1.31
    
    
    $
    (38.06
    )Basic net income (loss) per share pro forma
    
    $
    3.05
    
    
    $
    (38.25
    )Diluted net income (loss) per share pro forma
    
    $
    1.25
    
    
    $
    (38.25
    )
   Year Ended
    
    Year EndedJune 30, 2006
    
    June 30, 2005Expected life
    
    4
    years
    
    3
    yearsExpected risk-free interest rate
    
    
    4.2
    %
    
    
    3.0
    %Expected volatility
    
    
    158.01
    %
    
    
    177.25
    %
 F-17




---



##### Table of Contents



Year Ended
    
    Year EndedJune 30, 2006
    
    June 30, 2005Dividend yield
    
    
    
    %
    
    
    
    %Maximum contractual life
    
    7
    years

    
    7
    yearsRange of estimated forfeitures
    
    
    
    %
    
    
    
    %
  Year Ended
    
    
    Year EndedJune 30, 2006
    
    
    June 30, 2005Sales, marketing, and business development
    
    $
    121,219
    
    
    $
    General and administrative
    
    
    711,727
    
    
    
    454,000Total stock-based compensation expense
    
    $
    832,946
    
    
    $
    454,000
 Fair Value of Financial Instruments
  Recent Accounting Pronouncement
     F-18




---



##### Table of Contents



Note 3. Property and Equipment
  June 30, 2006
    
    
    June 30, 2005Purchased software
    
    $
    241,311
    
    
    $
    78,088Computer equipment
    
    
    247,858
    
    
    
    165,476Machinery equipment
    
    
    27,947
    
    
    
    Furniture, fixtures and equipment
    
    
    82,582
    
    
    
    Leasehold improvement
    
    
    12,171
    
    
    
    54,322611,870
    
    
    
    297,886Accumulated depreciation
    
    
    (178,961
    )
    
    
    (74,861
    )$
    432,909
    
    
    $
    223,025
  Note 4. Accrued Expenses
  June 30, 2006
    
    
    June 30, 2005Accrued professional fees
    
    $
    732,731
    
    
    $
    960,032Accrued vendor costs
    
    
    467,648
    
    
    
    276,686Accrued penalties on late registration
    
    
    
    
    
    
    1,033,500Accrued compensation expense
    
    
    2,679,251
    
    
    
    1,078,033Accrued interest expense
    
    
    1,460,210
    
    
    
    90,000Other accrued expenses
    
    
    541,651
    
    
    
    314,480$
    5,881,491
    
    
    $
    3,752,731
 F-19




---



##### Table of Contents



Note 5. Stockholders Equity
 Common and Preferred Stock
      F-20




---



##### Table of Contents



Stock Options
    F-21




---



##### Table of Contents



Weighted-Average
    
    
    AverageExercise
    
    
    Fair ValueOptions
    
    
    Price
    
    
    of GrantsOptions outstanding at June 30, 2004
    
    
    90,333
    
    
    $
    22.00Options cancelled
    
    
    (131,592
    )
    
    
    13.05Options granted
    
    
    669,712
    
    
    
    6.75
    
    
    $
    5.24Options outstanding at June 30, 2005
    
    
    628,453
    
    
    
    6.84Options cancelled
    
    
    (1,628,876
    )
    
    
    2.16Options granted
    
    
    5,214,000
    
    
    
    1.14Options outstanding at June 30, 2006
    
    
    4,213,577
    
    
    
    1.74
    
    
    $
    1.48
  Options Outstanding
    
    
    Options ExercisableWeightedAverageRemaining
    
    
    Weighted
    
    
    
    
    
    
    WeightedContractual
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Life
    
    
    Exercise
    
    
    
    
    
    
    ExercisePrice
    
    
    Shares
    
    
    (in years)
    
    
    Price
    
    
    Shares
    
    
    Price$
    1.08 to $1.22
    
    
    
    3,801,500
    
    
    
    6.6
    
    
    $
    1.26
    
    
    
    1,372,054
    
    
    $
    1.15$
    6.75
    
    
    
    401,827
    
    
    
    8.1
    
    
    $
    6.75
    
    
    
    
    
    
    
    N/A$
    15
    
    
    
    7,400
    
    
    
    7.8
    
    
    $
    15
    
    
    
    7,400
    
    
    $
    15$
    25
    
    
    
    2,850
    
    
    
    6.6
    
    
    $
    25
    
    
    
    2,850
    
    
    $
    25Total
    
    
    4,213,577
    
    
    
    6.8
    
    
    $
    1.74
    
    
    
    1,382,304
    
    
    $
    1.27
  F-22




---



##### Table of Contents



Weighted-AverageGrant DateNon-vested Shares
    
    Shares
    
    
    Fair ValueNon-vested, July 1, 2005
    
    
    404,384
    
    
    $
    5.27Granted
    
    
    5,214,000
    
    
    
    0.89Vested
    
    
    (1,374,304
    )
    
    
    1.03Cancelled
    
    
    (1,412,807
    )
    
    
    1.08Non-vested, June 30, 2006
    
    
    2,831,273
    
    
    $
    8.27
  Warrants
     F-23




---



##### Table of Contents



Note 6. Gupta Technologies, LLC Acquisition
  F-24




---



##### Table of Contents



Cash
    
    $
    742,915Accounts Receivables
    
    
    2,489,517Other current assets
    
    
    393,126Fixed assets
    
    
    161,345Intangibles
    
    
    16,434,800Goodwill
    
    
    7,055,264Other assets
    
    
    71,093Accounts Payable and accrued expenses
    
    
    (3,047,893
    )Deferred Revenues
    
    
    (1,975,167
    )$
    22,325,000
  Note 7. Kenosia Acquisition
    Cash
    
    $
    6,125Accounts receivables
    
    
    312,750Other current assets
    
    
    15,000Fixed assets
    
    
    7,635Intangibles
    
    
    1,270,283Goodwill
    
    
    589,252Accounts payable and accrued expenses
    
    
    (10,979
    )Deferred revenues
    
    
    (375,046
    )$
    1,815,020
  Note 8. Acquisition of Five Software Companies
 Foresight, Milgo, ProfitKey International and David Corporation Purchase Agreement
  F-25




---



##### Table of Contents



Cash and cash equivalents
    
    $
    371,948Accounts receivable
    
    
    1,903,877Other current assets
    
    
    705,678Fixed assets
    
    
    118,916Intangibles
    
    
    4,890,500Goodwill
    
    
    8,863,190Other assets
    
    
    111,153Accounts payable and accrued expenses
    
    
    (2,009,731
    )Deferred revenue
    
    
    (2,604,531
    )$
    12,351,000
 Tesseract Merger Agreement and Amendment
  F-26




---



##### Table of Contents




 
 
  Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and Equity.
 
 F-27




---



##### Table of Contents



Cash and cash equivalents
    
    $
    254,757Accounts receivable
    
    
    1,298Other current assets
    
    
    333,871Fixed assets
    
    
    3,830Intangibles
    
    
    4,006,600Goodwill
    
    
    14,432,493Accounts payable and accrued expenses
    
    
    (949,750
    )Deferred revenue
    
    
    (1,424,802
    )Other long term liabilities
    
    
    (15,889
    )$
    16,642,408
 Credit Agreement
   Note 9. Acquisition of Empagio
  F-28




---



##### Table of Contents



Accounts receivable
    
    $
    163,706Prepaid
    
    
    2,530Intangibles
    
    
    395,000Goodwill
    
    
    1,754,573Accounts payable and accrued expenses
    
    
    (356,826
    )Notes payable
    
    
    (66,452
    )Deferred revenue
    
    
    (43,763
    )$
    1,848,768
  Note 10. Acquisition of Executive Consultants, Inc.
    Cash and cash equivalents
    
    $
    20,871Accounts receivable
    
    
    116,777Prepaid
    
    
    2,480Intangibles
    
    
    112,000Goodwill
    
    
    1,073,038Accounts payable and accrued expenses
    
    
    (172,732
    )$
    1,152,434
  Unaudited Pro Forma Financial Information.
   F-29




---



##### Table of Contents



Years ended June 30,2006
    
    
    2005Revenue
    
    $
    36,059,806
    
    
    $
    43,646,128Net income (loss)
    
    
    20,198,956
    
    
    
    (50,002,142
    )Beneficial conversion and preferred dividends
    
    
    (1,521,477
    )
    
    
    (21,503,678
    )Income (loss) attributable to common stockholders
    
    $
    18,677,479
    
    
    $
    (71,505,820
    )Income (loss) per share  basic
    
    $
    2.85
    
    
    $
    (19.42
    )Income (loss) per share  diluted
    
    $
    1.28
    
    
    $
    (19.42
    )Weighted-average number of common shares  basic
    
    
    6,558,951
    
    
    
    3,681,176Weighted-average number of common shares  diluted
    
    
    15,879,769
    
    
    
    3,681,176
 Note 11. Acquired Intangible Assets
  June 30, 2006
    
    
    June 30, 2005Amortized Intangible Assets:Developed Technology
    
    $
    6,123,269
    
    
    $
    2,284,100Customer Relationships
    
    
    12,148,719
    
    
    
    6,165,800Contracts
    
    
    8,127,901
    
    
    
    7,547,200Trade names
    
    
    221,300
    
    
    
    Total amortized intangible assets
    
    $
    26,621,189
    
    
    $
    15,997,100Accumulated amortization
    
    
    3,551,075
    
    
    
    756,064Net
    
    $
    23,070,114
    
    
    $
    15,241,036Unamortized intangible assets:Goodwill
    
    $
    28,138,396
    
    
    $
    7,055,264Trade names
    
    $
    473,994
    
    
    $
    437,700Estimated amortization expense at June 30, 2006:For year ending June 30, 2007
    
    $
    3,217,572For year ending June 30, 2008
    
    $
    3,132,276For year ending June 30, 2009
    
    $
    3,012,900For year ending June 30, 2010
    
    $
    3,012,900For year ending June 30, 2011
    
    $
    3,012,900Thereafter
    
    $
    7,681,566
  Note 12. Foresight Sale
  
 F-30




---



##### Table of Contents



Note 13. Credit Agreement
    
    
    Subject to the terms and conditions of the Credit Agreement, the Lenders agreed to make
available to the Company a term loan facility in three Tranches, Tranches A, B and C, in an
aggregate amount equal to $50,000,000.
    
    The maximum amount of loans under Tranche A of the credit facility is $10,000,000. The
purpose of amounts borrowed under Tranche A is to refinance certain of the Companys
existing debt and to pay certain costs and expenses incurred in connection with the closing
under the Credit Agreement.
    
    The maximum amount of loans under Tranche B of the credit facility is $15,000,000.
Amounts borrowed under Tranche B may be used only to partially fund the acquisition by the
Company of one or more companies, the acquisition costs related thereto, and other costs and
expenses incurred in connection with the Credit Agreement and to finance an agreed amount of
working capital for the companies being acquired.
    
    The maximum amount of loans under Tranche C of the credit facility is $25,000,000.
Amounts borrowed under Tranche C may be used only to partially fund the acquisition by the
Company of one or more publicly-traded companies, the acquisition costs related thereto, and
other costs and expenses incurred in connection with the Credit Agreement and to finance an
agreed amount of working capital for the companies being acquired.
    
    The Company has borrowed $10,000,000 under Tranche A of the credit facility to pay-off
its existing senior indebtedness, in the aggregate principal amount of $6,825,000, plus
accrued interest thereon, as well as certain existing subordinated indebtedness, in the
aggregate principal amount of $1,500,000. In addition, amounts borrowed under this Tranche A
were used to pay certain closing costs, including the Lenders legal fees, commitment fees,
and other costs and expenses under the Credit Agreement amounting to $1,083,872. In
addition, the Company paid $642,614 in consulting and other fees in connection with the
credit facility and in connection with the Tranche B described below. These closing costs
have been deferred, and will be amortized over 4 years. For the year ended June 30, 2006,
$359,689 was amortized. The remaining balance of $664,003 was used for working capital
needs.
    
    The obligation to repay the $10,000,000 principal amount borrowed at the closing, along
with interest as described below, is further evidenced by the Note.
    
    Advances under Tranche B and Tranche C must be approved by the Lenders, and are subject
to the satisfaction of all conditions precedent required by the Lenders including the
condition that a default not occur under the loans as a result of the advance.
    
    The rate of interest (the Interest Rate) payable on the Loan for each calendar month
(an Interest Period) is a floating percentage rate per annum equal to the sum of the
LIBOR for that period plus the Margin. For theses purposes, LIBOR means for any Interest
Period the rate offered in the London interbank market for U.S. Dollar deposits for the
relevant Interest Period; provided, however, that for purposes of calculating the Interest
Rate, LIBOR shall at no time be less than a rate equal to 2.65%. For these purposes,
Margin means 9% per annum. Interest is due and payable monthly in arrears.
    
    Provided there has been no event of default under the Loan, an amount of interest equal
to 4% per annum that would otherwise be paid in cash instead may be paid in kind (PIK) by
such amount being added to the principal balance of the Loan on the last day of each month.
Such PIK amount will then accrue interest and be due and payable on the same terms and
conditions as the Loan. The Company may, at its option, elect to terminate the PIK interest
arrangement and instead pay such amount in cash. As of June 30, 2006, the Company accrued
and expensed $791,322 in relation to the PIK interest.
 F-31




---



##### Table of Contents




    
    If any sum due and payable under the credit facility is not paid on the due date
therefore, the Company shall be liable to pay interest on such overdue amount at a rate
equal to the then current Interest Rate plus 3% per annum.
    
    Principal amounts due under the Loans begin to be amortized on August 2, 2006, with the
complete Loan to be repaid in full no later than the Maturity Date which is four years after
the closing. $873,000 for the fair value of the warrants issued in connection of this loan
will be amortized within one year. Net of these two amounts, $1,333,126, is classified under
Current portion of senior note payable on the Consolidated Balance Sheet. At June 30,
2006, maturities for the Credit Agreement are as follows:
 Year EndingJune 30,2007

    $
    2,206,0002008

    $
    3,333,0002009

    $
    3,333,0002010

    $
    19,861,000
 
    
    A mandatory prepayment is required if, prior to the date which is 9 months after the
Closing Date, (i) the Company has not borrowed under Tranche B, and (ii) the Company has not
acquired (without the incurrence of any indebtedness) 100% of the equity interests of any
new subsidiary which at the time of acquisition had a twelve month trailing EBITDA of
greater than $1,000,000. If prepayments are required due to this reason, the amount of the
prepayment is 85% of the Excess Cash Flow- which means, cash provided by operations by the
Company and its subsidiaries determined quarterly less capital expenditures for such period,
provided that the Company shall at all times be allowed to retain a minimum of $1,500,000 of
cash for operating purposes. In addition, the Company must prepay the loan in full no later
than the date which is 21 months after the Closing Date.
    
    The Credit Agreement contains certain financial covenants usual and customary for
facilities and transactions of this type. These financial covenants include Total Debt to
EBITDA, Cash Interest Coverage Ratio, and Fixed Charge Covenant Ratio as defined. In the
event the Company completes further acquisitions, the Company and the Agent and lenders will
agree upon modifications to the financial covenants to reflect the changes to the Companys
consolidated assets, liabilities, and expected results of operations in amounts to be
mutually agreed to by the parties. The Company is in compliance with all covenants under the
Credit Agreement.
    
    The Companys obligations are guaranteed by the direct and indirect subsidiaries of the
Company, including, without limitation, Gupta Technologies, LLC, Kenosia Corporation, and
Warp Solutions, Inc. The Amendment Agreement described below adds TAC/Halo, LLC, Process
Software, LLC, David Corporation, and Profitkey International, LLC, to this guarantee.
    
    The Company and its subsidiaries granted first priority security interests in their
assets, and pledged the stock or equity interests in their respective subsidiaries, to the
Agent as security for the financial obligations under the Credit Agreement and the Financing
Documents. In addition, the Company has undertaken to complete certain matters, including
the delivery of stock certificates in subsidiaries, and the completion of financing
statements perfecting the security interests granted under the applicable state or foreign
jurisdictions concerning the security interests and rights granted to the Lenders and the
Agent.
    
    As additional security for the lenders making the loans under the Credit Agreement,
certain subsidiaries of the Company have entered into Security Agreements with Fortress
Credit. Corp. relating to their assets in the U.K., and have pledged their interests in the
subsidiaries organized under English law, Gupta Technologies Limited and Warp Solutions
Limited, by entering into a Mortgages of Shares with Fortress. Also, the Companys
subsidiary, Gupta Technologies, LLC (Gupta) and its German subsidiary, Gupta Technologies
GmbH, have entered into a Security Trust Agreement with Fortress Credit Corp. granting a
security interest in the assets of such entities located in Germany. Gupta has also pledged
its interests in the German subsidiary under a Share Pledge Agreement with Fortress Credit
Corp.
    
    Under the Intercreditor Agreement, the holders of the Companys outstanding subordinated
notes which were issued pursuant to that certain Subordinated Note and Warrant Purchase
Agreement dated January 31, 2005, agreed to subordinate the payment terms and security
interests of the subordinated notes to the payment terms and security interests of the
senior lenders under the Credit Agreement.
 F-32




---



##### Table of Contents




    
    Pursuant to the Warrant Agreement, the Company agreed to issue warrants to acquire up to
an aggregate of 7% of the fully diluted stock of the Company (as of the date of the Warrant
Agreement) if the Lenders make all the advances
under the total commitments of the credit facility. All warrants will have an exercise price
of $0.01 per share. The exercise price and number of shares issuable upon exercise of each
warrant are subject to adjustment as provided in the Warrant Agreement, including weighted
average anti-dilution protection.
    
    Warrants to acquire an aggregate of 5% of the fully diluted stock of the Company
(2,109,042 shares of Common Stock, par value $.00001 per share) are issuable upon the
Company receiving advances under Tranche A or B of the credit facility (Tranche A/B
Available Shares) in proportion to the amount of the advance compared with the total
$25,000,000 in commitments under Tranche A and B.
    
    Since the Company borrowed $10,000,000 under Tranche A at the closing, warrants to
acquire 40% of the Available Tranche A/B Shares (843,617 shares of the Companys Common
Stock) were issued at closing to the Lenders. The warrants have an exercise price of $.01
per share, have a cashless exercise feature, and are exercisable until December 10, 2010. As
further advances are made to the Company under Tranche B, the Company will issue additional
warrants in proportion to the advances received. Additionally, if the unused total
commitments attributable to Tranche A and Tranche B are cancelled in accordance with the
Credit Agreement, warrants shall be used for the number of shares based on the Pro Rata
Portion of the Total Commitments attributable to Tranche A or Tranche B which are cancelled.
The proceeds from the Tranche A were allocated to the fair value of the warrants and Tranche
A. Based on the fair market value, $1,599,615 was allocated to the warrants and the
remainder of $8,400,385 was allocated to Tranche A. The fair value of the warrants was
determined by utilizing Black-Scholes method. The discount to Tranche A will be accreted
over 48 months. For the year ended June 30, 2006, $366,575 was amortized and charged to
interest expense.
    
    On October 26, 2005, in connection with the acquisition of the five software companies
(referred to as Agreements to Acquire Five Software Companies in Note 8), the Company
entered into Amendment Agreement No. 1 (Amendment Agreement) between the Company, Fortress
Credit Opportunities I LP (Lender) and Fortress Credit Corp., as Agent (the Agent)
relating to the Credit Agreement dated August 2, 2005 between the Company, Fortress Credit
Corp., as original lender (together with any additional lenders, the Original Lenders),
and the Agent. Pursuant to this Amendment Agreement, the Lender made a loan of $15,000,000
under Tranche B of the credit facility under the Credit Agreement. Additional information of
this amendment is qualified in its entirety by reference to Amendment Agreement No. 1, which
was previously filed as Exhibit 10.87 of the Current Report on Form 8-K filed by the Company
with the Securities and Exchange Commission on November 1, 2005.
    
    Since the Company borrowed $15,000,000 under Tranche B on October 26, 2005, warrants to
acquire 60% of the Available Tranche A/B Shares (1,265,425 shares of the Companys Common
Stock) were issued to the Lenders. The warrants have an exercise price of $.01 per share,
have a cashless exercise feature, and are exercisable until December 10, 2010. Based on the
fair market value, $1,892,415 was allocated to the warrants and the remainder of $13,107,585
was allocated to Tranche B. The fair value of the warrants was determined by utilizing
Black-Scholes method. The discount to Tranche B will be accreted over 45 months. For the
year ended June 30, 2006, $325,574 was accreted and charged to interest expense.
    
    Warrants to acquire an aggregate of 2% of the fully diluted stock of the Company (843,617
shares of Common Stock) are issuable upon the Company receiving advances under Tranche C of
the credit facility (Tranche C Available Shares) in proportion to the amount of the
Tranche C advance compared with the total $25,000,000 in commitments under Tranche C.
 Note 14. Subordinated Notes, Notes Payable, and Subscription Agreements
   
 F-33




---



##### Table of Contents




 
 
 
 
 
      F-34




---



##### Table of Contents



F-35




---



##### Table of Contents



F-36




---



##### Table of Contents



F-37




---



##### Table of Contents




    
    the holder of the $500,000 principal amount September 2005 Note;
    
    the holder of the $500,000 principal amount October 2005 Note that is still outstanding;
    
    the holders of the $700,000 principal amount of Series E Notes;
    
    David Howitt, who made a $150,000 short term loan to the Company;
    
    the investor who had agreed to convert $67,500 in certain advisory fees due from the
Company into a Series E Subscription Agreement.
 Note 15. Late Filing Penalties
   F-38




---



##### Table of Contents



Note 16. Income Taxes
  June 30,2006
    
    
    2005(In thousands)Deferred tax liabilities:Differences between book and tax basis of goodwill
    
    $
    109
    
    
    $
    41Deferred tax assets:Operating loss carryforwards
    
    $
    22,246
    
    
    $
    13,211Net deferred tax asset
    
    $
    22,137
    
    
    $
    13,170Valuation allowance
    
    $
    22,137
    
    
    $
    13,170
    Note 17. Commitments and Contingencies
 Legal Proceedings.
  Leases
     F-39




---



##### Table of Contents



2007
    
    $
    1,497,3242008
    
    
    838,9242009
    
    
    394,5712010
    
    
    296,0012011
    
    
    36,027Total
    
    $
    3,062,847
 Note 18. Amendment to Articles of Incorporation.
  Note 19. Series D Certificate of Designation.
  Note 20. Geographic Information
  Year ended June 30, 2006License
    
    
    Service
    
    
    TotalNorth America
    
    $
    2,323,432
    
    
    $
    14,079,023
    
    
    $
    16,402,455Europe, Africa and the Middle East
    
    
    2,873,129
    
    
    
    4,633,291
    
    
    
    7,506,420Asia Pacific
    
    
    507,127
    
    
    
    509,329
    
    
    
    1,016,456Latin America
    
    
    119,752
    
    
    
    163,912
    
    
    
    283,664Total
    
    $
    5,823,440
    
    
    $
    19,385,555
    
    
    $
    25,208,995
 Year ended June 30, 2005License
    
    
    Service
    
    
    TotalNorth America
    
    $
    1,283,296
    
    
    $
    719,319
    
    
    $
    2,002,615Europe, Africa and the Middle East
    
    
    1,447,982
    
    
    
    1,228,744
    
    
    
    2,676,726Asia Pacific
    
    
    177,767
    
    
    
    139,180
    
    
    
    316,947Latin America
    
    
    77,707
    
    
    
    49,927
    
    
    
    127,634Total
    
    $
    2,986,752
    
    
    $
    2,137,170
    
    
    $
    5,123,922
  Note 21. Employee Benefit Plan
  F-40




---



##### Table of Contents



Note 22. Related Party Transactions.
      F-41




---



##### Table of Contents



Note 23. Subsequent Events
 a)  Issuance of Common Stock and Warrants
  b)  Agreement and Plan of Merger with Tenebril, Inc.
     F-42




---



##### Table of Contents



c)  Amendment to Current Report on Form 8-K Regarding Third Quarter Earnings
  d)  Restatements of Periodic Reports
  F-43




---



##### Table of Contents



12 months Ended June 30, 2005As Previously
    
    
    Restatement
    
    
    AdjustedReported
    
    
    Adjustments
    
    
    FinancialsRevenue
    
    $
    5,123,922
    
    
    $
    
    
    
    $
    5,123,922Net (loss)
    
    
    (15,372,939
    )
    
    
    (35,885,911
    )
    
    
    (51,258,850
    )Beneficial conversion and preferred dividends
    
    
    (7,510,590
    )
    
    
    (13,993,088
    )
    
    
    (21,503,678
    )Loss attributable to common stockholders
    
    $
    (22,883,529
    )
    
    $
    (49,878,999
    )
    
    $
    (72,762,528
    )Loss per share  basic
    
    $
    (11.97
    )
    
    
    
    
    
    $
    (38.06
    )Loss per share  diluted
    
    $
    (11.97
    )
    
    
    
    
    
    $
    (38.06
    )Weighted-average number of common shares  basic
    
    
    1,912,033
    
    
    
    
    
    
    
    1,912,033Weighted-average number of common shares  diluted
    
    
    1,912,033
    
    
    
    
    
    
    
    1,912,033
 9 months Ended March 31, 2006As Previously
    
    
    Restatement
    
    
    AdjustedReported
    
    
    Adjustments
    
    
    FinancialsRevenue
    
    $
    16,786,583
    
    
    $
    
    
    
    $
    16,786,583Net income (loss)
    
    
    (12,692,855
    )
    
    
    34,052,427
    
    
    
    21,359,572Beneficial conversion and preferred dividends
    
    
    (1,069,162
    )
    
    
    
    
    
    
    (1,069,162
    )Income (loss) attributable to common stockholders
    
    $
    (13,762,017
    )
    
    $
    34,052,427
    
    
    $
    20,290,410Income (loss) per share  basic
    
    $
    (2.97
    )
    
    
    
    
    
    $
    4.38Income (loss) per share  diluted
    
    $
    (2.97
    )
    
    
    
    
    
    $
    0.77Weighted-average number of common shares  basic
    
    
    4,637,578
    
    
    
    
    
    
    
    4,637,578Weighted-average number of common shares  diluted
    
    
    4,637,578
    
    
    
    
    
    
    
    27,860,277
 F-44




---



##### Table of Contents



e)  Purchase and Exchange Agreement with Unify
       f)  Termination Agreement with Unify
    F-45




---



##### Table of Contents



g)  Equity Purchase Agreement with RevCast, Inc.
     h)  Subordinated
Debt Financing
    Regulation D
 Registrable Shares
        i)  Amendment No. 2
to Fortress Credit Agreement
       F-46