**UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION****WASHINGTON, DC 20549**

**FORM10-KSB/A**

**(MARK ONE)**

**ANNUALREPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For thefiscal year ended December 31, 2006**

**OR**

**TRANSITIONREPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**CommissionFile Number 000-2883**

**VUBOTICS,INC.**(Name of small business issuer in its charter)

| **Georgia**                   | ** ** | **000-28883** | ** ** | **58-2212465**       |
|-------------------------------|------------|---------------|------------|----------------------|
| (State or Other  Jurisdiction |       | (Commission   |       | (IRS Employer        |
| of  Incorporation)            |       | File Number)  |       | Identification  No.) |

 

**235Peachtree Street NE, Suite 1725, Atlanta, Georgia 30303**(Address of Principal Executive Offices)(Zip Code)

(Registrant’stelephone number, including area code)    **404-474-2576**

Securities registeredunder Section 12(b) of the Exchange Act:  **None**Securities registered under Section 12(g) of the Exchange Act:  **Common Stock, $0.001 par value**

Check whether the issueris not required to file reports pursuant to Section 13 or 15(d) of the ExchangeAct.   o

Check whether the issuer (1) filed all reportsrequired to be filed Section 13 or 15(d) of the Exchange Act during the past 12months (or for such shorter period for which the registrant was required tofile reports), and (2) has been subject to such filing requirements for thepast 90 days.    x  Yes      o  No

Check if there is no disclosure of delinquent filersin response to Item 405 of Regulation S-B contained in this form, and nodisclosure will be contained, to the best of registrant’s knowledge, indefinitive proxy or information statements incorporated by reference in PartIII of this Form 10-KSB or any amendment to this Form 10-KSB:   x

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act).     Yes  o      No  x

Registrant’s revenues for the twelve month periodended December 31, 2006 were $37,000

The aggregate market value of the voting andnon-voting common equity stock held by non-affiliates of the Company computedby reference to the price at which the stock was sold, or the average bid andasked prices of such common equity on the OTC Bulletin Board, as of March 19,2007 was $12,092,656 based on 44,787,616 shares at $0.27 per share.

As of March 19, 2007, the Registrant had outstanding 52,228,718shares of Common Stock, $0.001 par value.

Documentsincorporated by reference:  **None**

TransitionalSmall Business Disclosure Format:    Yes  o      No  x

 

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**PART II**

**EXPLANATORY NOTE**

VuBotics, Inc. (the “Company”)is filing this Form 10-KSB/A to its Annual Report on Form 10-KSB for the periodended December 31, 2006, which was filed on April 2, 2007 (the “Form 10-KSB”),solely to include (i) the Independent Registered Public Accounting Firm’sReport of E. Phillip Bailey, CPA, which covers the Company’s consolidatedstatements of operations, cash flows and stockholders’ deficit for the periodended December 31, 2005, and (ii) the Consent of the Independent RegisteredPublic Accounting Firm of E. Phillip Bailey, CPA.  With the exception of the foregoing, no otherinformation in our Form 10-KSB has been supplemented, updated or amended bythis filing.

2

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**ITEM 7.FINANCIAL STATEMENTS.**

The financial statementsrequired by Item 310(a) of Regulation S-B are attached hereto as Exhibit A.

**ITEM 13.EXHIBITS AND REPORTS ON FORM8-K.**

Exhibits.
| Exhibit No. | ** ** | **Description**                                                                                                                                                                                                                                        |
|-------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |       |                                                                                                                                                                                                                                                   |
| 2.1         |       | Agreement and Plan of Reorganization between Silver  Strike Nevada and Christopher Partners, Inc., dated January 29, 1999  (Incorporated by reference to Exhibit No. 8.1, to Form 10-SB, filed January  13, 2000)                                      |
|        |       |                                                                                                                                                                                                                                                   |
| 3.1         |       | Articles of Incorporation of Silver Strike Mining  Company, Inc. (Incorporated by reference to Exhibit No. 2.1, to Form 10-SB,  filed January 13, 2000)                                                                                                |
|        |       |                                                                                                                                                                                                                                                   |
| 3.2         |       | Certificate of Amendment to the Articles of  Incorporation filed July 8, 1996 (Incorporated by reference to Exhibit No.  2.2, to Form 10-SB, filed January 13, 2000)                                                                                   |
|        |       |                                                                                                                                                                                                                                                   |
| 3.3         |       | Articles of Merger filed July 18, 1996 (Incorporated  by reference to Exhibit No. 2.3, to Form 10-SB, filed January 13, 2000)                                                                                                                          |
|        |       |                                                                                                                                                                                                                                                   |
| 3.4         |       | Certificate of Amendment to Articles of  Incorporation filed July 23, 1998 (Incorporated by reference to Exhibit  No. 2.4, to Form 10-SB, filed January 13, 2000)                                                                                 |
|        |       |                                                                                                                                                                                                                                                   |
| 3.5         |       | Certificate of Amendment to Articles of  Incorporation filed February 12, 1999 (Incorporated by reference to Exhibit  No. 2.5, to Form 10-SB, filed January 13, 2000)                                                                                  |
|        |       |                                                                                                                                                                                                                                                   |
| 3.6         |       | Articles of Share Exchange filed February 26, 1999  (Incorporated by reference to Exhibit No. 2.6, to Form 10-SB, filed January  13, 2000)                                                                                                             |
|        |       |                                                                                                                                                                                                                                                   |
| 3.7         |       | Amended and Restated Bylaws of Vubotics, Inc.  (Incorporated by reference to Exhibit No. 2.7, to Form 10-SB, filed January  13, 2000)                                                                                                                  |
|        |       |                                                                                                                                                                                                                                                   |
| 4.1         |       | Preferred Stock Document (Incorporated by reference  to Exhibit No. 4.1 to Form 10-QSB, filed November 13, 2000)                                                                                                                                       |
|        |       |                                                                                                                                                                                                                                                   |
| 10.1        |       | Exclusive Sales Representative Agreement between  Truscom and XTec, dated October 11, 2000 (Incorporated by reference to  Exhibit No. 10.1 to the Form 10-QSB, filed November 13, 2000)                                                                |
|        |       |                                                                                                                                                                                                                                                   |
| 10.2        |       | Consultant Agreement between Halifax and Columbia  Financial Group, Inc., dated January 2, 2001 (Incorporated by reference to  Exhibit 10.2 to the Form 10-KSB, filed March 29, 2001)                                                                  |
|        |       |                                                                                                                                                                                                                                                   |
| 10.3        |       | Employment Agreement between Stephen E. Brisker and  Halifax International, Inc., dated June 1, 2001 (Incorporated by reference to  Exhibit 10.3 to Form 10-KSB filed April 15, 2002)                                                                  |
|        |       |                                                                                                                                                                                                                                                   |
| 10.4        |       | Plan and Agreement of Reorganization By and Between  QuantumReader, Inc. and Vubotics, Inc. dated November 17, 2004 (Incorporated  by reference to Exhibit 10.4 to Form 10-KSB for the fiscal year ended  December 31, 2004 filed on October 14, 2005) |
|        |       |                                                                                                                                                                                                                                                   |

 

3

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| 14.0   |   | Code of Ethics *                                                                                                                  |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                              |
| 23     |   | Consent of Independent Certified Public Accountant *                                                                              |
|   |   |                                                                                                                              |
| 23.1   |   | Consent of Independent Certified Public Accountant                                                                                |
|   |   |                                                                                                                              |
| 31     |   | Rule 13a — 14(a)/15d-14(a) Certification of Chief  Executive Officer                                                         |
|   |   |                                                                                                                              |
| 31.1   |   | Rule 13a — 14(a)/15d-14(a) Certification of Chief  Financial Officer                                                         |
|   |   |                                                                                                                              |
| 32     |   | Statement of Chief Executive Officer and Chief  Financial Officer pursuant to Section 1350 of Title 18 of the United States  Code |

 

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*   Previously Filed

4

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SIGNATURES

Pursuant to the requirements of the SecuritiesExchange Act of 1934, the registrant has duly caused this report to be signedon its behalf by the undersigned hereunto duly authorized.
| VuBotics, Inc. |
|----------------|
|           |
| By:            |   | /s/ Philip E. Lundquist |   |
|           |   |   |
|           |   | Name: |   | Philip E. Lundquist |
|           |   |   |   |   |
|           |   | Title: |   | Chief Executive Officer |
|           |   |   |   |   |
|           |   | Date: |   | June 15, 2007 |
|                |  |  |  |  |  |

 

5

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**VUBOTICS,INC. AND SUBSIDIARIES**

**CONSOLIDATEDFINANCIAL STATEMENTS**

**DECEMBER31, 2006**

6

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**TABLEOF CONTENTS**
| INDEPENDENT REGISTERED PUBLIC  ACCOUNTING FIRM’S REPORT |
|--------------------------------------------------------------|
|                                                         |
| CONSOLIDATED BALANCE SHEET                                   |
|                                                         |
| CONSOLIDATED  STATEMENTS OF OPERATIONS                       |
|                                                         |
| CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT        |
|                                                         |
| CONSOLIDATED  STATEMENTS OF CASH FLOWS                       |
|                                                         |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                   |

 

7

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**INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’SREPORT**

To the Board of Directors and Shareholders of Vubotics,Inc., Atlanta, Georgia

We haveaudited the accompanying consolidated balance sheet of Vubotics, Inc. (aGeorgia corporation) and its subsidiaries as of December 31, 2006, and therelated consolidated statements of operations, stockholders’ deficit and cashflows for the year ended December 31, 2006. These consolidated financialstatements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these consolidated financial statementsbased on our audit.

Weconducted our audits in accordance with the standards of the Public CompanyAccounting Oversight Board (United States). Those standards require that weplan and perform the audits to obtain reasonable assurance about whether theconsolidated financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts anddisclosures in the consolidated financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall consolidated financial statementpresentation. We believe that our audits provide a reasonable basis for ouropinion.

In ouropinion, the consolidated financial statements referred to above presentfairly, in all material respects, the financial position of Vubotics, Inc. and itssubsidiaries as of December 31, 2006, and the results of its operations andcash flows for the year ended December 31, 2006, in conformity with U.S.generally accepted accounting principles.

Theaccompanying consolidated financial statements have been prepared assuming thatthe Company will continue as a going concern. As discussed in Note 8 to thefinancial statements, the Company has suffered recurring losses and has a netcapital deficiency. These conditions raise substantial doubt about its abilityto continue as a going concern. Management’s plans in regard to these mattersare also described in Note 8. The financial statements do not include anyadjustments relating to the recoverability and classification of asset carryingamounts or the amount and classification of liabilities that might resultshould the Company be unable to continue as a going concern.

WTUniack & Co., CPAs, P.C.

Atlanta,Georgia

March  30, 2007

8

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**INDEPENDENT REGISTERED PUBLICACCOUNTING FIRM’S REPORT**

To the Board of Directorsand Shareholders of VuBotics, Inc. Atlanta, Georgia.

We have audited theaccompanying consolidated balance sheet of VuBotics, Inc. (a Georgiacorporation) and its subsidiaries as of December 31, 2005, and the relatedconsolidated statements of operations, stockholders’ deficit and cash flows forthe year ended December 31, 2005.  Theseconsolidated financial statements are the responsibility of the Company’smanagement.  Our responsibility is toexpress an opinion on these consolidated financial statements based on ouraudit.

We conducted our auditsin accordance with the standards of the Public Company Accounting OversightBoard (United States).  Those standardsrequire that we plan and perform the audits to obtain reasonable assuranceabout whether the consolidated financial statements are free of materialmisstatement.  An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe consolidated financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallconsolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, theconsolidated financial statements referred to above present fairly, in allmaterial respects, the financial position of Vubotics, Inc. and its subsidiariesas of December 31, 2005, and the results of its operations and cash flows forthe year ended December 31, 2005, in conformity with U.S. generally acceptedaccounting principles.

The accompanyingconsolidated financial statements have been prepared assuming that the Companywill continue as a going concern.  Asdiscussed in Note 8 to the financial statements, the Company has sufferedrecurring losses and has a net capital deficiency.  These conditions raise substantial doubtabout its ability to continue as a going concern.  Management’s plans in regard to these mattersare also described in Note 8.  Thefinancial statements do not include any adjustments relating to therecoverability and classification of asset carrying amounts or the amount andclassification of liabilities that might result should the Company be unable tocontinue as a going concern.

E. Phillip Bailey, CPA

Atlanta, Georgia

June 12, 2007

9

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**VUBOTICS, INC. AND SUBSIDIARIES**

**CONSOLIDATEDBALANCE SHEET**

**DECEMBER31, 2006**
| **ASSETS**                                                                                               |   |        |    |
|----------------------------------------------------------------------------------------------------------|--------|-------------|---------|
|                                                                                                     |   |        |    |
| **Current  Assets**                                                                                      |   |        |    |
| Cash                                                                                                     |   | $           | 513,947 |   |
| Deposits                                                                                                 |   | 1,297       |    |
| **Total current assets**                                                                                 |   | 515,244     |    |
|                                                                                                     |   |        |    |
| **Other  Assets**                                                                                        |   |        |    |
| Fixed assets, net                                                                                        |   | 28,812      |    |
| Intangible asset                                                                                         |   | 102,529     |    |
| Impairment reserve                                                                                       |   | (102,529    | )       |
| Total other assets                                                                                       |   | 28,812      |    |
|                                                                                                     |   |        |    |
| **Total Assets**                                                                                         |   | $           | 544,056 |   |
|                                                                                                     |   |        |    |
| **LIABILITIES  AND STOCKHOLDERS’ DEFICIT**                                                          |   |        |    |
|                                                                                                     |   |        |    |
| **Current  Liabilities**                                                                                 |   |        |    |
| Notes payable — current portion                                                                     |   | $           | 400,000 |   |
| Accrued expenses                                                                                         |   | 1,215,434   |    |
| Accrued interest                                                                                         |   | 6,042       |    |
| Due to related party                                                                                     |   | 78,985      |    |
| Accrued payroll                                                                                          |   | 67,014      |    |
| **Total current liabilities**                                                                            |   | 1,767,475   |    |
|                                                                                                     |   |        |    |
| **Notes  Payable**                                                                                       |   | 702,344     |    |
|                                                                                                     |   |        |    |
| **Total liabilities**                                                                                    |   | 2,469,819   |    |
|                                                                                                     |   |        |    |
| **Stockholders’  (Deficit)**                                                                        |   |        |    |
| Common stock, $0.001 par value, 100,000,000 shares  authorized, 49,825,718 shares issued and outstanding |   | 49,826      |    |
| Preferred stock, $0.001 par value, 25,000,000 shares  authorized, no shares issued and outstanding       |   | —      |    |
| Additional paid-in capital                                                                               |   | 12,189,250  |    |
| Accumulated deficit                                                                                      |   | (14,164,839 | )       |
|                                                                                                     |   | (1,925,763  | )       |
|                                                                                                     |   |        |    |
| **Total  Liabilities and Stockholders’ Deficit**                                                    |   | $           | 544,056 |   |

Theaccompanying notes are an integral part of these consolidated financialstatements.

10

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**VUBOTICS, INC. AND SUBSIDIARIES**

**CONSOLIDATEDSTATEMENTS OF OPERATIONS**

**FOR THEYEARS ENDED DECEMBER 31, 2006 AND 2005**
| ** **                                            | ** ** | **2006**   | ** ** | **2005**   | ** ** |
|-------------------------------------------------------|------------|------------|------------|------------|------------|
| ** **                                            | ** ** | ** ** | ** ** | ** ** | ** ** |
| Revenue                                               |       | $          | 37,000     |       | $          | 2,672 |   |
|                                                  |       |       |       |       |       |
| Cost of sales                                         |       | —     |       | 2,675      |       |
|                                                  |       |       |       |       |       |
| Gross profit                                          |       | 37,000     |       | (3         | )          |
|                                                  |       |       |       |       |       |
| Product  Development                                  |       | 568,671    |       | 187,185    |       |
| Sales and  marketing                                  |       | 774,421    |       | 272,588    |       |
| General and  administrative                           |       | 2,111,950  |       | 1,456,687  |       |
|                                                  |       | 3,455,042  |       | 1,916,460  |       |
|                                                  |       |       |       |       |       |
| Loss from  operations                                 |       | (3,418,042 | )          | (1,916,463 | )          |
|                                                  |       |       |       |       |       |
| Interest expense                                      |       | (45,084    | )          | (146,633   | )          |
| Gain on debt restructure                              |       | 798,046    |       | —     |       |
| Other income                                          |       | —     |       | 25,000     |       |
| Interest income                                       |       | 11,633     |       | —     |       |
|                                                  |       | 764,595    |       | (121,633   | )          |
|                                                  |       |       |       |       |       |
| Net loss                                              |       | $          | (2,653,447 | )          | $          | (2,038,096 | ) |
|                                                  |       |       |       |       |       |
| Net loss per  common share - basic and fully diluted  |       | $          | (0.06      | )          | $          | (0.06 | ) |
|                                                  |       |       |       |       |       |
| Weighted average number  of common shares outstanding |       | 43,158,271 |       | 31,829,906 |       |

Theaccompanying notes are an integral part of these consolidated financialstatements.

11

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**VUBOTICS, INC. AND SUBSIDIARIES**

**CONSOLIDATEDSTATEMENTS OF STOCKHOLDERS’ DEFICIT**

**FOR THEYEARS ENDED DECEMBER 31, 2006 AND 2005**
| ** **                                        | ** ** | ** **            | ** ** | ** **                | ** ** | **Common**  | ** ** | **Additional**  | ** ** | ** **             | ** ** | **Total**   | ** ** |
|---------------------------------------------------|------------|-----------------------|------------|---------------------------|------------|-------------|------------|-----------------|------------|------------------------|------------|-------------|------------|
| ** **                                        | ** ** | **Common Stock** | ** ** | **Stock to be** | ** ** | **Paid-In** | ** ** | **Accumulated** | ** ** | **Stockholders’** | ** ** |
| ** **                                        | ** ** | **Shares**            | ** ** | **Amount**                | ** ** | **Issued**  | ** ** | **Capital**     | ** ** | **Deficit**            | ** ** | **Deficit** | ** ** |
|                                              |       |                  |       |                      |       |        |       |            |       |                   |       |        |       |
| Balance, December 31,  2004                       |       | 26,127,609            |       | $                         | 26,128     |        | $          | 67              |       | $                      | 7,093,006  |        | $          | (9,473,296 | ) | $ | (2,354,095 | ) |
|                                              |       |                  |       |                      |       |        |       |            |       |                   |       |        |       |
| Issuance of common  stock for cash                |       | 2,533,333             |       | 2,533                     |       | (67         | )          | 480,034         |       | —                 |       | 482,500     |       |
|                                              |       |                  |       |                      |       |        |       |            |       |                   |       |        |       |
| Issuance of common  stock for services            |       | 6,385,332             |       | 6,385                     |       | —      |       | 932,511         |       | —                 |       | 938,896     |       |
|                                              |       |                  |       |                      |       |        |       |            |       |                   |       |        |       |
| Common stock redeemed                             |       | (49,000               | )          | (49                       | )          | —      |       | (7,201          | )          | —                 |       | (7,250      | )          |
|                                              |       |                  |       |                      |       |        |       |            |       |                   |       |        |       |
| Common stock to be  issued                        |       | 198,000               |       | —                    |       | 198         |       | 20,802          |       | —                 |       | 21,000      |       |
|                                              |       |                  |       |                      |       |        |       |            |       |                   |       |        |       |
| Net loss                                          |       | —                |       | —                    |       | —      |       | —          |       | (2,038,096             | )          | (2,038,096  | )          |
|                                              |       |                  |       |                      |       |        |       |            |       |                   |       |        |       |
| Balance, December 31,  2005                       |       | 35,195,274            |       | $                         | 34,997     |        | $          | 198             |       | $                      | 8,519,152  |        | $          | (11,511,392 | ) | $ | (2,957,045 | ) |
|                                              |       |                  |       |                      |       |        |       |            |       |                   |       |        |       |
| Issuance of common  stock for cash                |       | 8,822,133             |       | 9,021                     |       | (198        | )          | 2,271,578       |       | —                 |       | 2,280,401   |       |
|                                              |       |                  |       |                      |       |        |       |            |       |                   |       |        |       |
| Issuance of common  stock for settlement of loans |       | 1,948,483             |       | 1,948                     |       | —      |       | 435,373         |       | —                 |       | 437,321     |       |
|                                              |       |                  |       |                      |       |        |       |            |       |                   |       |        |       |
| Issuance of common  stock for services            |       | 3,859,828             |       | 3,860                     |       | —      |       | 963,147         |       | —                 |       | 967,007     |       |
|                                              |       |                  |       |                      |       |        |       |            |       |                   |       |        |       |
| Net loss                                          |       | —                |       | —                    |       | —      |       | —          |       | (2,653,447             | )          | (2,653,447  | )          |
|                                              |       |                  |       |                      |       |        |       |            |       |                   |       |        |       |
| Balance, December 31, 2006                        |       | 49,825,718            |       | $                         | 49,826     |        | $          | —          |       | $                      | 12,189,250 |        | $          | (14,164,839 | ) | $ | (1,925,763 | ) |

The accompanying notesare an integral part of these consolidated financial statements.

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**VUBOTICS, INC. AND SUBSIDIARIES**

**CONSOLIDATEDSTATEMENTS OF CASH FLOWS**

**FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005**
| ** **                                                                   | ** ** | **2006**   | ** ** | **2005**   | ** ** |
|------------------------------------------------------------------------------|------------|------------|------------|------------|------------|
| ** **                                                                   | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Cash  Flows From Operating Activities**                                    |       |       |       |       |       |
| Net loss                                                                     |       | $          | (2,653,447 | )          | $          | (2,038,096 | ) |
| Adjustments to  reconcile net loss to net cash used in operating activities: |       |       |       |       |       |
| Issuance of common stock for services                                        |       | 967,007    |       | 938,896    |       |
| Gain on debt restructure                                                     |       | (798,046   | )          | —     |       |
| Depreciation                                                                 |       | 3,401      |       | —     |       |
| Increase  (decrease) in operating liabilities:                               |       |       |       |       |       |
| Accounts payable and accrued expenses                                        |       | 833,098    |       | 96,709     |       |
| Accrued payroll and payroll liabilities                                      |       | 67,014     |       | —     |       |
| Accrued interest                                                             |       | (34,016    | )          | 146,633    |       |
| Net cash used in  operating activities                                       |       | (1,614,989 | )          | (855,858   | )          |
|                                                                         |       |       |       |       |       |
| **Cash  Flows From Investing Activities**                                    |       |       |       |       |       |
| Purchase of fixed assets                                                     |       | (32,213    | )          | —     |       |
|                                                                         |       |       |       |       |       |
| **Cash  Flows From Financing Activities**                                    |       |       |       |       |       |
| Proceeds from issuance of common stock                                       |       | 2,280,401  |       | 482,500    |       |
| Redemption of common stock                                                   |       | —     |       | (7,250     | )          |
| Proceeds from common stock to be issued                                      |       | —     |       | 21,000     |       |
| Principal payments on notes payable                                          |       | (286,733   | )          | —     |       |
| Loans from related party                                                     |       | 167,298    |       | 343,746    |       |
| Net cash  provided by financing activities                                   |       | 2,160,966  |       | 839,996    |       |
|                                                                         |       |       |       |       |       |
| Net increase  (decrease) in cash                                             |       | 513,764    |       | (15,862    | )          |
| Cash — beginning  of year                                               |       | 183        |       | 16,045     |       |
| Cash — end of  year                                                     |       | $          | 513,947    |       | $          | 183 |   |
|                                                                         |       |       |       |       |       |
| Supplemental  disclosures of cash flow information                           |       |       |       |       |       |
| Cash paid for interest                                                       |       | $          | 70,142     |       | $          | — |   |
| Cash paid for income taxes                                                   |       | $          | —     |       | $          | — |   |
|                                                                         |       |       |       |       |       |
| SUPPLEMENTAL DISCLOSURES OF  NON-CASH INVESTING AND FINANCING ACTIVITIES:    |       |       |       |       |       |
|                                                                         |       |       |       |       |       |

Theaccompanying notes are an integral part of these consolidated financialstatements.

13

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**VUBOTICS,INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**DECEMBER31, 2005 AND 2004**

**NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS**

***Business Operations***

In 2004, Halifax International, Inc. changed its nameto Vubotics, Inc. (the “Company”).

Vubotics, through one of its wholly-ownedsubsidiaries, QuantumReader, Inc., is developing a new type of software productcalled Quantum Reader. According to the Company. Quantum Reader is a hardwareindependent software system which changes the way in which text is displayed onelectronic displays.

**NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Principles of Consolidation***

The consolidatedfinancial statements include the books of Vubotics, Inc. (formerly SilverStrike Mining Company) and its wholly owned subsidiaries Christopher Partners,Inc., QuantumReader, Inc., Truscom Inc., Annapolis Valley Ventures, Inc. andX-VU, LLC. All inter-company transactions and accounts have been eliminated.

***Revenue Recognition***

The Company recognizesrevenue when persuasive evidence of an arrangement exists, fees are fixed ordeterminable, delivery has occurred and collection is reasonably assured.Revenue is not recognized until title has passed and risk of loss hastransferred to the customer, which occurs at time of shipment. Services to beperformed and revenue thus recognized have occurred and are acknowledged by thecustomer in a manner that readily suggests in form and in substance thatresources have been consumed and utilized and have met those customerexpectations, terms and conditions of which are usually set in contractualformat.

***Stock Based Compensation***

The Company has issuedand may issue stock in lieu of cash for certain transactions. The fair value ofthe stock, which is based on comparable cash purchases, third party quotations,or the value of services, whichever is more readily determinable, is used to valuethe transaction.

***Use of Estimates***

The preparation offinancial statements in conformity with generally accepted accountingprinciples requires management to make estimates and assumptions that affectthe reported amounts of assets and liabilities and disclosure of contingentassets and liabilities at the date of the financial statements and the reportedamounts of revenue and expenses during the reporting period. Actual resultscould differ from those estimates. It is possible that the significant estimatesused will change within the next year.

***Impairment of Long-Lived Assets***

The Company reviewslong-lived assets for possible impairment whenever events or changes incircumstances indicate that the carrying amount of an asset may not berecoverable. If such assets are considered to be impaired, the impairment to berecognized is measured by the amount by which the carrying value exceeds thefair value of the assets, as measured by discounted cash flows over theremaining life of the assets.

***Basic and Diluted Per Common Share***

Under Statement ofFinancial Accounting Standards (“SFAS”) No. 128, “Earnings Per Share,” basic earningsper common share is computed by dividing income available to commonstockholders by the weighted average number of common shares assumed to beoutstanding during the period of computation. Diluted earnings per share iscomputed similar to basic earnings per share except that the denominator isincreased to include the number of additional common shares that would havebeen outstanding if the potential

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common shares had beenissued and if the additional common shares were dilutive. Because the Companyhas incurred net losses, basic and diluted loss per share are the same sinceadditional potential common shares would be anti-dilutive.

***Income Taxes***

Deferred income taxassets and liabilities are recognized for the estimated tax effects oftemporary differences between the financial reporting and tax reporting basesof assets and liabilities and for loss carryforwards based on enacted tax lawsand rates. A valuation allowance is used to eliminate deferred income taxassets to the amount that is more likely than not to be utilized.

***Research and Development***

The Company expensesresearch and development costs as incurred.

***Significant Recent Accounting Pronouncements***

In March 2005, the SEC issued Staff Accounting Bulletin No. 107 (“SAB 107”), which offers guidance on SFAS 123(R). SAB 107 was issued to assist preparers by simplifying some of the implementation challenges of SFAS 123(R) while enhancing the information that investors receive. SAB 107 creates a framework that is premised on two overarching themes: (a) considerable judgment will be required by preparers to successfully implement SFAS 123(R), specifically when valuing employee stock ptions; and (b) reasonable individuals, acting in good faith, may conclude differently on the fair value of employee stock options.

In May 2005, the FASB issued SFAS 154, “Accounting Changes and Error Corrections”. SFAS No. 154 establishes new standards on accounting for changes in accounting principles. Pursuant to the new rules, all such changes must be accounted for by retrospective application to the financial statements of prior periods unless it is impracticable to do so. SFAS No. 154 supersedes Accounting Principles Bulletin (APB) Opinion 2, “Accounting for Changes” and SFAS No. 3 “Reporting Accounting Changes in Interim Financial Statements”, though it carries forward the guidance of those pronouncements with respect to accounting for changes in estimates, changes in the reporting entity, and error corrections. This statement is effective for accounting changes and error corrections made in years beginning after December 15, 2005, with early adoption permitted for changes and corrections made in years beginning after May 2005. The adoption of SFAS No. 154 did not have a material impact on the Company’s financial statements.

In June 2005, the Emerging Issues Task Force (“EITF”) reached consensus on Issue No. 05-6 (“Issue”), “Determining the Amortization Period for Leasehold Improvements”. This Issue provides guidance on determination of the amortization period for leasehold improvements that are purchased subsequent to the inception of the lease. Such leasehold improvements should be amortized over the lesser of the useful life of the asset, or the lease term that includes reasonably assured lease renewals. This Issue is effective for leasehold improvements acquired in the periods beginning after July 1, 2005. The Company does not expect the adoption of EITF No. 05-6 to have a material effect on its financial statements.

Key topics covered by SAB 107 include valuation models, expected volatility and expected term. The Company will apply the principles of SAB 107 in conjunction with its adoption of SFAS 123(R).

The adoption of EITF02-14 will not have a significant impact on the Company’s financialstatements.

In February 2006, theFASB issued SFAS 155, Accounting for Certain Hybrid Financial Instruments — anamendment of FASB Statements 133 and 140, (“SFAS155”). SFAS will be effectivefor the Company beginning January 1, 2007. The statement permits interests inhybrid financial instruments that contain an embedded derivative that wouldotherwise require bifurcation, to be accounted for as a single financial instrumentat fair value, with changes in fair value recognized in earnings. This electionis permitted on  an instrument byinstrument basis for all hybrid financial instruments held, obtained, or issuedas of the adoption date. The adoption had no impact to the Company’sconsolidated financial position, results of operations or cash flows.

In June 2006, the FASB issuedFASB Interpretation No. 48, Accounting for Uncertainty of Income Taxes-an interpretationof FASB Statement No. 109 (“FIN48”), which clarifies the accounting for uncertaintyin income tax positions. This Interpretation requires that the Companyrecognize in the consolidated financial statements the impact of a tax positionthat is more likely than not to be sustained upon examination based on thetechnical merits of the position. The provisions of FIN 48 will be effective orthe Company as of the beginning of the Company’s 2008 fiscal year, with thecumulative effect of the change in accounting principle recorded as anadjustment to opening retained earnings. The provisions of FASB  Interpretation 48 are not expected to anyimpact on the Company’s financial statements.

In September 2006, theFASB issued FASB No. 158, Employers’ Accounting for Defined Benefit Pension andOther Postretirement Benefits (“FAS 158”). FAS 158 addresses the accounting fordefined benefit pension plans and other postretirement benefit plans 

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(“plans”). Specifically,FAS 158 requires companies to recognize an asset for a plan’s over fundedstatus or a liability for a plan’s under funded status and to measure a plan’s assetsand its obligations that determine its funded status as of the end of the Company’sfiscal year, the offset of which is recorded, net of tax, as a component ofother comprehensive income in shareholders’ equity. FAS 158 will be effectivefor the Company as of September 30, 2007 and applied prospectively. Theprovisions of FAS 158 are not expected to have any impact on the Company’sfinancial statements.

In September 2006, theFASB issued FASB statement No. 157, Fair Value Measurements (“FAS 157”). FAS157 establishes a single authoritative definition of fair value, sets out a frameworkfor measuring fair value and expands on required disclosures about fair valuemeasurement. FAS 157 is effective for the Company on October 1, 2008 and willbe applied prospectively. The provisions of FAS 157 are not expected to have amaterial impact on the Company’s financial statements.

Other recent accounting pronouncementsissued by the FASB (including its Emerging Issues Task Force (“EITF”)), theAmerican Institute of Certified Public Accountants (“AICPA”), and the SEC didnot or are not believed by management to have a material impact on the Company’spresent or future financial statements.

**NOTE 3 - NOTES PAYABLE**

The Company’s notespayable at December 31, 2006 are summarized as follows:

| 10% notes payable to a  stockholder. The note is unsecured. |   | $       | 628,500   |   |
|-------------------------------------------------------------|--------|---------|-----------|--------|
|                                                        |   |    |      |
| 10% notes  payable to a stockholder. The note is unsecured. |   | 174,000 |      |
|                                                        |   |    |      |
| 10% notes  payable to a stockholder. The note is unsecured. |   | 299,844 |      |
|                                                        |   |    |      |
| Total notes payable                                         |   | $       | 1,102,344 |   |

The aggregate principal amounts of the notes payablematuring in subsequent years as of December 31, 2006 are as follows:

| Amount currently  outstanding: |   | $ | 702,344 |   |
|--------------------------------|--------|---|---------|--------|
| Currently Due:                 |   | $ | 400,000 |   |

**NOTE 4 — PURCHASE OF QUANTUM READER,INC. AND RELATED IMPAIRMENT**

The Company purchased theentire stock of QuantumReader, Inc. (“QR”) in a stock for stock transaction.The purchase price was valued at $102,529 with $2,529 being allocated forliabilities assumed and 1,000,000 shares of stock issued by the Company for thetechnology of the acquired company.

As mentioned in note 8,there exist significant concerns as to the Company’s viability as a goingconcern. Therefore in light of such concerns and for other reasons set forthbelow, the Company has reserved for the entire amount of those intangibleassets purchased.

The Companycurrently does not present any indefinite-lived intangible assets in itsbalance sheet. For the year ended December 31, 2005 and in accordance with SFASNo. 142, the Company performed its annual impairment test ofits intangible asset and concluded that an impairment existed at thatdate. The factors considered led to a substantial doubt of the Company’sability to recover its investment due to a lack of certainty in future cashflows calculated on an undiscounted basis. In addition, based on its fairmarket value estimate the related write down was required to record theintangible asset on its fair market value.

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**NOTE 5 -INCOME TAXES**

The effective tax ratevaries from the maximum federal statutory rate as a result of the followingitems for the twelve months ended December 31, 2006 and 2005:
| ** **                                                  | ** ** | **December 31,  2006** | ** ** | **December 31,  2005** | ** ** |
|-------------------------------------------------------------|------------|-----------------------------|------------|-----------------------------|------------|
|                                                        |       |                        |       |                        |       |
| Tax benefit  computed at the maximum federal statutory rate |       | (34.0                       | )%         | (34.0                       | )%         |
|                                                        |       |                        |       |                        |       |
| State tax rate,  net of federal tax benefit                 |       | (4.5                        | )          | (4.5                        | )          |
|                                                        |       |                        |       |                        |       |
| Increase in  valuation allowance                            |       | 38.5                        |       | 38.5                        |       |
|                                                        |       |                        |       |                        |       |
| Effective income tax  rate                                  |       | 0.0                         | %          | 0.0                         | %          |

Deferred income tax assets and the related valuationallowances result principally from the potential tax benefits of net operatingloss carryforwards.

The Company has recordeda valuation allowance to reflect the uncertainty of the ultimate utilization ofthe deferred tax assets as follows:
| ** **                | ** ** | **December 31,  2006** | ** ** | **December 31,  2005** | ** ** |
|---------------------------|------------|-----------------------------|------------|-----------------------------|------------|
|                      |       |                        |       |                        |       |
| Deferred tax  assets      |       | $                           | 5,453,000  |                        | $          | 4,432,000 |   |
|                      |       |                        |       |                        |       |
| Less valuation  allowance |       | (5,453,000                  | )          | (4,432,000                  | )          |
|                      |       |                        |       |                        |       |
| Net deferred tax assets   |       | $                           | —     |                        | $          | — |   |

For financial statement purposes, no tax benefit hasbeen reported as the Company has had significant losses in recent years andrealization of the tax benefits is uncertain. Accordingly, a valuationallowance has been established in the full amount of the deferred tax asset.

At December 31, 2006, theCompany had net operating loss carryforwards of approximately $14,165,000 whichwill be available to offset future taxable income. These net operating losscarryforwards expire at various times through 2026. The utilization of the netoperating loss carryforwards is dependent upon the Company’s ability togenerate sufficient taxable income during the carryforward period.

**NOTE 6 -RELATED PARTY TRANSACTIONS**

Loans totaling a net of $273,850 were received from PhilipE. Lundquist, an officer and shareholder, during the year ended December 31,2006.

During the fiscal years ending December 31, 2006 and2005, the Company issued a total of 7,190,483 shares, all at a price equalto market value, of which 1,948,483 were issued in repayment of cashadvances previously made by Mr. Lundquist to the Company, 2,500,000 were issuedin consideration of services rendered by Mr. Lundquist during prior years, and2,742,000 were issued in consideration of Mr. Lundquist’s services renderedduring 2005 and 2006. As of December 31, 2006, the outstanding amount of cashadvances still owed to Mr. Lundquist by the Company is $78,985.

Subsequent to year end, John F. Ellingson wasappointed as President. During the year ended December 31, 2006, VisionFactory, LLC, 50% owned by Mr. Ellingson was paid $90,500 for Managementservices performed by Mr. Ellingson. In addition, Vision Factory, Inc. was paid$90,500 for Sales and marketing services performed by Mr. Ellingson’s partner.

**NOTE 7 - COMMITMENTS ANDCONTINGENCIES**

***None***

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**NOTE 8 — GOING CONCERN**

These consolidatedfinancial statements have been prepared in accordance with generally acceptedaccounting principles applicable to a going concern, which contemplates therealization of assets and the satisfaction of liabilities and commitments inthe normal course of business. However, the Company has incurred net losses of$2,653,447 and $2,038,096 for the twelve months ended December 31, 2006 and2005, respectively. The Company also had a working capital deficiency of$1,252,231 and an equity deficiency of $1,925,763 at December 31, 2006 and hassignificant currently maturing debt and related accrued interest thereto. TheCompany has raised capital to fund the operating activities primarily throughprivate equity infusions from stockholders, loans through stockholders andother demand loans. The Company intends on financing its future developmentactivities and its working capital needs largely from the sale of public equitysecurities with some additional funding from other traditional financingsources, including term notes, until such time that funds provided byoperations are sufficient to fund working capital requirements.

These factors, amongothers, raise substantial doubt about the Company’s ability to continue as agoing concern for a reasonable period of time.

The consolidatedfinancial statements do not include any adjustments relating to therecoverability and classification of recorded asset amounts other than what isdescribed in Note 4.

**NOTE 9 — SUBSEQUENT EVENT —**(**Unaudited**)

On February 6, 2007, the Company was served with acomplaint which had been filed on January 29, 2007 in the Superior Court ofFulton County, Georgia by Ekistics Research, LLC and Craig J. Larson, a formerdirector and officer of the Company, against the Company and Vubotics Georgia,Inc. The complaint alleged, among other things, that the Company breached itsobligation to provide up to $500,000 for working capital, software development,inventory purchases and promotion of the QuantumReader software during the12-month period after the Company’s acquisition of QuantumReader, Inc. underthe Plan and Agreement of Reorganization dated November 17, 2004 among theCompany, Mr. Larson and others. The plaintiffs were seeking monetary damages,as well as an injunction requiring the Company to provide Mr. Larson with anon-exclusive, worldwide, perpetual, irrevocable, paid-up license to theQuantumReader software.

On March, 2007, Ekistics Research, LLC and Mr. Larsonwithdrew the complaint.

On January 18, 2007, JohnF. Ellingson was appointed President of the Company (see Note 6).

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