**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      DC 20549**





**FORM
      10-KSB**




x
            **ANNUAL
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934****For
                the fiscal year ended June 30,
                2008.**




OR




o
            **TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934****For
                the transition period from********to********.**




**Commission
      file number: 333-136069**





**Future
      Now Group Inc.**


(Name
      of
      small business issuer in its charter)




**Nevada**
            
            **20-4237445**(State
                or other jurisdiction of
              incorporation
                or organization)
            
            (I.R.S.
                Employer
              Identification
                No.)





**61
                Unquowa Rd** **., Fairfield, CT**
            
            **06824**(Address
                of principal executive offices)
            
            (Zip
                Code)




Issuer’s
      telephone number: 877-643-7244





**Securities
      registered under Section 12(b) of the Exchange Act: None**




**Securities
      registered under Section 12(g) of the Exchange Act: Common Stock, par value
      $0.001**




Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      Section 15(d) of the Exchange Act. o




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




Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. o




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




The
      Issuer's revenues for the twelve months ended June 30, 2008 were
      $2,084,526.




The
      aggregate market value of the voting stock held by non-affiliates of the Issuer
      on September 26, 2008, was approximately $10,213,314. This calculation is based
      on the closing sale price of $0.13 as reported on the OTC Bulletin Board on
      September 26, 2008. Shares of common stock held by each executive officer and
      director and by certain persons who own 5% or more of the outstanding common
      stock have been excluded in that such persons may be deemed to be affiliates.
      This determination of affiliate status is not necessarily a conclusive
      determination for other purposes.




State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date.




**Class**
            
            **Outstanding
                at September 26, 2008**Common
                Stock, $0.001 par value per share
            
            78,563,952
                shares





Documents
      Incorporated by Reference: NONE





Transitional
      Small Business Disclosure Format (Check one): Yes o ;
 No x









**TABLE
      OF CONTENTS**




**Page**SPECIAL
                NOTE REGARDING FORWARD-LOOKING STATEMENTS
            1**PART
                I**ITEM
                1.
            DESCRIPTION
                OF BUSINESS
            3ITEM
                2.
            DESCRIPTION
                OF PROPERTY
            6ITEM
                3.
            LEGAL
                PROCEEDINGS
            6ITEM
                4.
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS
            6**PART
                II**ITEM
                5.
            MARKET
                FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
                ISSUER PURCHASES OF EQUITY SECURITIES
            7ITEM
                6.
            MANAGEMENT’S
                DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
            8ITEM
                7.
            FINANCIAL
                STATEMENTS
            14ITEM
                8.
            CHANGES
                IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                DISCLOSURE
            15ITEM
                  8A(T).
            CONTROLS
                AND PROCEDURES
            15ITEM
                  8B
            OTHER
                INFORMATION
            15**PART
                III**ITEM
                9.
            DIRECTORS,
                EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE;
                COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
            16ITEM
                10.
            EXECUTIVE
                COMPENSATION
            18ITEM
                11.
            SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                STOCKHOLDER MATTERS
            20ITEM
                12.
            CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
                INDEPENDENCE
            21ITEM
                13.
            EXHIBITS
            22ITEM
                14.
            PRINCIPAL
                ACCOUNTANT FEES AND SERVICES
            23


i




**SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS**




This
      report contains forward-looking statements that involve a number of risks and
      uncertainties. Although our forward-looking statements reflect the good faith
      judgment of our management, these statements can be based only on facts and
      factors of which we are currently aware. Consequently, forward-looking
      statements are inherently subject to risks and uncertainties. Actual results
      and
      outcomes may differ materially from results and outcomes discussed in the
      forward-looking statements.




Forward-looking
      statements can be identified by the use of forward-looking words such as “may,”
“will,” “should,” “anticipate,” “believe,” “expect,” “plan,” “future,” “intend,”
“could,” “estimate,” “predict,” “hope,” “potential,” “continue,” or the negative
      of these terms or other similar expressions. These statements include, but
      are
      not limited to, statements under the captions “Risk Factors,” “Management’s
      Discussion and Analysis or Plan of Operation” and “Description of Business,” as
      well as other sections in this report. Such forward-looking statements are
      based
      on our management’s current plans and expectations and are subject to risks,
      uncertainties and changes in plans that may cause actual results to differ
      materially from those anticipated in the forward-looking statements. You should
      be aware that, as a result of any of these factors materializing, the trading
      price of our common stock may decline. These factors include, but are not
      limited to, the following:




·
            the
                availability and adequacy of capital to support and grow our
                business;




·
            economic,
                competitive, business and other conditions in our local and regional
                markets;




·
            actions
                taken or not taken by others, including competitors, as well as
                legislative, regulatory, judicial and other governmental
                authorities;




·
            competition
                in our industry;




·
            changes
                in our business and growth strategy, capital improvements or development
                plans;




·
            the
                availability of additional capital to support development;
                and




·
            other
                factors discussed elsewhere in this annual
                report.




1




The
      cautionary statements made in this annual report are intended to be applicable
      to all related forward-looking statements wherever they may appear in this
      report.




We
      urge
      you not to place undue reliance on these forward-looking statements, which
      speak
      only as of the date of this report. We undertake no obligation to publicly
      update any forward looking-statements, whether as a result of new information,
      future events or otherwise.




2





**PART
      I**





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




***Corporate
      Information***




**Overview**




From
      our
      inception on January 23, 2006 to June 30, 2007, we were engaged in no
      significant operations other than organizational activities, acquiring and
      staking our properties, preparing the registration statements covering our
      securities and planning phase 1 of the exploration work on a mining property
      known as the “Fir property.” The Fir property is twenty-one cell mineral claims
      covering an area totaling 433.24 hectares located in the Kamloops Mining
      Division in south central British Columbia, approximately 35 kilometers south
      of
      Kamloops, British Columbia. On May 11, 2007, we announced that we had abandoned
      this property determining that the claim did not cover enough ground to host
      a
      viable exploration target. We then abandoned our previous business plan and
      focused on the identification of suitable businesses with which to enter into
      a
      business opportunity or business combination.




***Share
      Exchange with Future Now, Inc.***




On
      October 30, 2007, we entered into a share exchange agreement with Future Now,
      Inc., a privately held Delaware corporation, and the shareholders of Future
      Now,
      Inc. Future Now, Inc. is not a related entity and there were no material
      relationships between us and Future Now, Inc. prior to the share exchange.
      The
      closing of the transactions contemplated in the share exchange agreement and
      the
      acquisition of all of the issued and outstanding stock of Future Now, Inc.
      occurred on October 30, 2007. In accordance with the closing of the share
      exchange agreement, we issued 50,394,191 of our common shares to the
      shareholders of Future Now, Inc. in exchange for the acquisition, by us, of
      all
      of the issued and outstanding common shares of Future Now, Inc. on the basis
      of
      nine and one-quarter (9.25) shares of our common stock for one share of Future
      Now, Inc.’s common stock.




We
      had
      71,242,191 shares of common stock issued and outstanding as of October 30,
      2007,
      as a result of the issuance of 50,394,191 shares of common stock in connection
      with the closing of the share exchange and the concurrent cancellation of
      32,000,000 shares of common stock owned by our former directors. As of the
      closing date, the former shareholders of Future Now, Inc. held approximately
      70.74% of the issued and outstanding shares of our common stock. The issuance
      of
      the 50,394,191 shares of common stock to the former shareholders of Future
      Now,
      Inc. was deemed to be a reverse acquisition for accounting purposes.
      Accordingly, Future Now, Inc. the accounting acquirer entity, is regarded as
      the
      predecessor entity as of October 30, 2007. As a result of the exchange of the
      Future Now, Inc. common stock for our common stock, Future Now, Inc. became
      our
      wholly owned subsidiary. We will continue to file annual and quarterly reports
      based upon our fiscal year end of June 30.




In
      connection with the consummation of the share exchange, we changed the address
      of our principal executive offices effective October 30, 2007 from 650 - 1500
      West Georgia Street, Vancouver, BC V6G 2Z6 to the Galleria Building, 61 Unquowa
      Road, Fairfield, Connecticut 06824.





**Overview
      of Business**





Through
      our wholly-owned subsidiaries, we provide online marketing optimization services
      and software solutions utilizing a proprietary methodology and supporting set
      of
      software tools that help businesses improve their online marketing to generate
      more sales, leads, and subscriptions. Our proprietary Persuasion Architecture®
framework delivers clients “blueprints” to plan, measure and improve their
      online sales and marketing initiatives. Management believes that our methodology
      and software tool set represents a truly accountable solution to three
      multi-billion dollar problems;




1.
            Low
                customer conversion
                rates;1




2.
            High
                costs of customer acquisition;2and




3.
            Poor
                customer retention
                rates.3





1   State
      of Retailing Online 2007, conducted by Forrester Research for the Shop.org
      arm
      of the National Retail Federation reports average conversion rates of 3.1%.
      comScore, Inc. reports 2007 online commerce spending at $188B. For every
      additional 1 percentage point retailers add to their overall conversion rate,
      they stand to collectively add over $60B in revenue.


2  Internet Advertising Bureau reports, in a study conducted by
      PricewaterhouseCoopers LLP, that 2007 online ad revenues will top $20B. Record
      revenues confirmed through the first 3 quarters of 2007 total $15.2B. Online
      customer acquisition costs are directly attributable to the cost of the media
      required to deliver traffic.  3   Poor
      customer retention rates are most often measured by subscription businesses
      in
      terms of their churn rate. One example company, Netflix, the leader in their
      space reported a year end (6/30/07) churn of 63.4% of their customer base.
      Netflix also reported total revenue of $1.25B. To this one company alone, their
      problem with poor customer retention has an opportunity cost of over
      $2B.


3




Our
      business model is one of delivering software as a service complemented with
      certain professional services and licensing options.




Alkemi
      International Pty Ltd. Investment and Limited Term Licensing
      Agreement




On
      June
      13, 2007, we entered into a licensing agreement, a shareholders agreement and
      a
      call option deed (collectively, the “AIPL Agreements”) with Alkemi International
      Pty Ltd (“AIPL”). Under the AIPL Agreements, AIPL received a limited term
      exclusive licensing agreement for 17 months to resell and deliver our
      intellectual property in Australia and New Zealand and we would have a right
      to
      convert any monies owed pursuant to the AIPL Agreements from AIPL to an
      ownership position in AIPL. On July 23, 2007, we delivered to AIPL notice to
      issue shares that totaled the outstanding balance due from AIPL as of June
      13,
      2007, which, at the time, was approximately $84,000. A valuation opinion was
      obtained whereby the value of AIPL was set at $959,300 AUD (or US $808,724)
      and
      as such we received an amount equal to $97,268 AUD or 159,897 shares of AIPL.
      We
      will continue to accrue monies owed from AIPL until a total of US$62,629 is
      due
      from AIPL. At such time the amount will automatically be converted into
      additional shares of AIPL and the total ownership percentage at that time of
      AIPL by us will equal 15%. Payments to us will then commence based upon the
      licensing agreement.





Share
      Exchange with Elemental Business, Inc.





On
      May
      28, 2008, we completed a share exchange with Elemental Business, Inc. (“EBI”)
      whereby we purchased all the outstanding common stock of EBI in exchange for
      the
      issuance of 3,700,000 shares of its Common Stock. EBI became our wholly owned
      subsidiary. EBI is in the business of online marketing optimization using its
      proprietary technology. The technology was actually built around the concepts
      of
      the Persuasion Architecture® technology.
      Management believes that this acquisition will accelerate our time to market
      whereby we can touch all small businesses through a lower-priced
      subscription-based software product.





**Industry
      Background**




The
      Internet has emerged as a powerful marketing medium that allows millions of
      consumers and marketers to conduct business and interact with each other in
      unprecedented ways. The Internet is particularly well suited to direct marketers
      because of its ability to access both broad audiences, as well as precisely
      defined groups. As a result, the Internet provides marketers with opportunities
      to identify and attract customers, as well as target specific types of users
      and
      collect data on their preferences. At the same time, we believe the Internet
      appeals to consumers because it offers more individual control over marketing
      messages. The growth of the Internet has encouraged companies to spend more
      of
      their marketing budgets on Internet marketing. We believe there is a need for
      a
      marketing infrastructure that could satisfy the objectives of both marketers
      and
      consumers, which would enable businesses to acquire and retain customers, yet
      operate from a consumer-centric approach that would provide relevant information
      and meaningful value to the individual user.





**Products**




We
      derive
      our revenue from the sale of products and services classified into the following
      categories: (a) professional services, including custom and packaged consulting;
      (b) software subscription licensing; (c) content and training; and (d)
      product sales.





*Custom
      and Productized Consulting Services*




These
      services come in three primary service lines: (a) Conversion Optimization;
      (b)
      Persuasion Scenario Analysis; and (c) Marketing Planning & Optimization with
      Persuasion ArchitectureTM. All of these services are specific to the “flavor” of
      a site (for example, business-to-business, business-to-consumer, self-service or
      media). The services include three “sizes” per service line, which provides
      simplicity and scalability. The price for these services ranges from $2,500
      to
      $500,000. The delivery time frame ranges from less than three months to beyond
      a
      full year.




*Methodology
      Software Subscription and Licensing*




Our
      Persuasion Architecture® software suite, referred to as the Minerva
      Architectural Process (“MAP Tool”) is available for licensing. This is a
      valuable option for agencies as well as medium and larger companies that intend
      to implement Persuasion ArchitectureTM across multiple clients, sites, products
      and channels. Companies and individuals can also become certified Persuasion
      Architecture partners under direct licensing and royalty programs.




Persuasion
      Architecture® is a framework, methodology and software tool set we developed to
      plan, build and optimize persuasive systems on-line and off-line, irrespective
      of channel. The unique benefit of Persuasion ArchitectureTM is that it allows our
      clients to scientifically plan marketing scenarios from a customer-centric
      perspective and optimize them. Persuasion ArchitectureTM guides clients to
      document every assumption based on their customers’ personal motivations. It
      then asks the Persuasion ArchitectTM to predict the scenarios that those
      customers will navigate. On-line, Persuasion ArchitectureTM uses its web
      analytics scenario language (PAXML - Persuasion Architecture XML) to measure
      scenarios and optimize against those predictions. This scenario optimization
      process is a six sigma process that allows the Persuasion Architect to
      understand whether it is the execution or the plan that needs
      correction.




4




*Content
      and Training*




We
      continue to develop content and training programs from our thought leadership
      and market awareness. Our principals and key employees have published many
      books
      and white papers on topics pertaining to their respective areas of expertise.
      We
      offer various training programs that cater to both business-to-business and
      business-to-consumer operations. These workshops and seminars include:
      Persuasive Online Copywriting, Call to Action: Design with Your Audience in
      Mind
      and Wizards of Web, online strategy for increased ROI. Trainings are generally
      held at rented room locations within conference resort or standard hotel
      operations.




*Product
      Sales*




We
      recently launched a line of hard copy and downloadable products that may be
      purchased directly from our websites. Such products are meant to educate the
      user and move them into another revenue channel. The products currently include:
      Conversion Expert’s Workbook; Future Now’s Self Service Guide to Website
      Optimization; (created in conjunction with Google’s partnership with the launch
      of the Website Optimizer Tool), Which Sells Best; A Quick Start Guide to Testing
      for Retailers, and Principles of Online Copywriting.




**Intellectual
      Property**




*General*




We
      rely
      on trade secrets, prior client experience and the expertise of our team that
      we
      seek to protect, in part, by confidentiality agreements. We require all current
      and future employees, consultants, contractors, manufacturers, outside
      collaborators, directors on our board, and other advisors to execute
      confidentiality agreements upon the commencement of employment or consulting
      relationships with us. These agreements provide that all confidential
      information developed or made known to the individual during the course of
      the
      individual’s relationship with us is to be kept confidential and not disclosed
      to third parties except in specific limited circumstances. We require signed
      confidentiality or material transfer agreements from any company that receives
      confidential information from us. We intend to ensure that, in the case of
      employees, consultants and contractors, any agreements that we enter into with
      such persons will generally provide that all inventions conceived by the person
      while rendering services to us shall be assigned to us as our exclusive
      property.





*Trademarks*




We
      have
      the following registered trademark: Persuasion Architecture®.




*Domain
      Names*




We
      own
      and operate the following registered Internet domain names: futurenowinc.com,
      grokdotcom.com, futurenowgroup.com and persuasionarchitectureinc.com. The
      information contained on our websites does not form part of this
      report.





*Research
      and Software Development*




We
      currently have dedicated research and software development costs. We anticipate
      continued expenditures for such costs however over time the absolute dollar
      amount will decline as a percentage of our gross revenue.




*Competition*




We
      generally compete for the budgets that companies allocate to marketing. We
      believe the market for interactive marketing optimization will rapidly evolve
      and be intensively competitive. However, management believes that we have no
      direct competitors that provide a one-stop service/product which improves
      conversion rates and customer acquisition and retention. There are however
      companies active in various segments of this sector. The “agency” group
      (Organic, Inc., Critical Path, Inc., and Frog Internet Services) is concerned
      with tactical implementation and strategic direction but utilizes only vaguely
      defined micro-metrics. The “vendors group” (i.e., email marketers, search engine
      marketers, word-of-mouth marketing, and affiliates) offers tactical
      implementation and only pre-defined metrics without an overall strategic
      guidance. Management believes that our competitive advantage lies in our
      strategic marketing planning methodology and proprietary framework.




Our
      ability to compete depends on many factors. Factors over which we have some
      level of control include:




·
            ability
                to enter into relationships with marketers;·
            ability
                to provide simple, cost-effective and reliable
                solutions;·
            timely
                development and marketing of new services; and·
            ability
                to manage rapidly changing technologies, frequent new service
                introductions and evolving industry
                standards.




5




Factors
      outside our control include:




·
            development,
                introduction and market acceptance of new or enhanced services by
                our
                competitors;·
            changes
                in pricing policies of our competitors;·
            entry
                of new competitors in the market;·
            ability
                of marketers to provide simple, cost-effective and reliable promotions;
                and·
            market
                economy’s impact on our clients’ marketing
                budgets.




We
      expect
      competition to intensify as more competitors enter our markets. However, as
      referenced above, one of our most important assets is our intellectual property,
      which we believe will help offset some of the competitive pressures for certain
      of our services and products. Most of our existing competitors, as well as
      a
      number of potential new competitors, have significantly greater financial,
      technical, marketing and managerial resources than we do. Most of our
      competitors also generate greater revenue. They may compete more effectively
      and
      be more responsive to industry and technological change than we
      are.




*Major
      Customers*




Periodically
      we end up with a large custom consulting project. For the year ended June 30,
      2008, one customer represented 11% of our gross revenue. Our customers include
      marketing executives, their staffs, as well as corporate management and
      technology executives. The typical customer is a company that generates between
      $1 million and $50 million in revenue online, although we also have customers
      with significantly higher revenues.





*Marketing*




Prior
      to
      the second quarter of our current fiscal year, we had not done any outbound
      marketing or other advertising campaigns. Our revenues were solely due to
      referrals, our reputation in the market and the increasing demand for our
      services. In the future we plan to invest heavily in our marketing and
      advertising expense both in absolute dollars and as an increasing percentage
      of
      our operating expenses. Among other initiatives, our planned marketing efforts
      will involve: hiring new direct sales personnel, affiliated marketing
      arrangements, online advertising, and telemarketing.




Our
      clients are generally familiar with our methodology and employees from the
      numerous books written by our principals, Jeffrey and Bryan Eisenberg, our
      industry publication GrokDotCom, as well as our frequent appearances at industry
      conferences and events.





*Government
      Regulation*




Our
      products or services are not regulated by the government in any of our markets
      and we do not need to obtain permits specific to our industry in order for
      us to
      operate or to sell our products and services. Additionally, we are not subject
      to any legislation specific to our industry, products and services.





*Employees*




As
      of
      September 25, 2008, we employed approximately 20 people; of this number, 18
      individuals are full-time employees and the remainder are part-time employees
      and contractors/consultants.




We
      are
      not a party to any collective bargaining agreement. We believe our relations
      with our employees to be satisfactory.




***Reports
      to Security Holders***





None.





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




We
      currently do not own any real property. Our corporate headquarters are located
      at 61 Unquowa Road, Fairfield, Connecticut 06824 and are leased by us. Our
      lease
      is for approximately 550 square feet and has a term of two years ending December
      31, 2009.




Our
      primary sales, marketing and consulting service operations are conducted out
      of
      leased office space located at 55 Washington Street, Suite 419, Brooklyn, New
      York 11201. Our lease for this office commenced on December 15, 2007, has a
      term
      of three years and represents approximately 3,200 square feet.





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




We
      are
      not a party to any pending legal proceedings.





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




None.


6




**PART
      II**





**ITEM
                5.**
            **MARKET
                FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
                ISSUER PURCHASES OF EQUITY
                SECURITIES.**




We
      received approval from the OTC Bulletin Board on March 23, 2007 for quotation
      under the symbol “RPEX.OB.” Our trading symbol was changed from “RPEX.OB” to
“FUTR.OB” in July 2007 in connection with a 12-for-1 forward stock split and
      company name change.




The
      following table reflects the high and low bid information for our common stock
      obtained from Yahoo! Finance and reflects inter-dealer prices, without retail
      mark-ups, markdowns or commissions, and may not necessarily represent actual
      transactions.




The
      high
      and low bid prices of our common stock for the periods indicated below are
      as
      follows:





**FINRA**


**OTC
      Bulletin Board**




**Quarter****Ended**
            
            **High**
            
            **Low**September
                30, 2007
            
            $
            0.61
            
            $
            0.15December
                31, 2007
            
            $
            1.01
            
            $
            0.15March
                31, 2008
            
            $
            0.50
            
            $
            0.26June
                30, 2008
            
            $
            0.40
            
            $
            0.17





**Quarter****Ended**
            
            **High**
            
            **Low**September
                30, 2006
            
            $
            -
            
            $
            -December
                31, 2006
            
            $
            -
            
            $
            -March
                31, 2007
            
            $
            -
            
            $
            -June
                30, 2007
            
            $
            0.15
            
            $
            0.15





On
      September 26, 2008 the last trade for our common stock as reported by the
      quotation service operated by the OTC Bulletin Board was $0.13 per share.




**Holders**




As
      of
      September 25, 2008 there were 89 holders of record of our common stock who
      held
      an aggregate of 78,563,952 common shares.




Our
      common shares are issued in registered form. Our registrar and transfer agent
      is
      Island Stock Transfer, 100 Second Avenue South, Suite 104N, St. Petersburg,
      Florida, 33701, Telephone: (727) 289-0010, Facsimile: (727)
      289-0069.





**Dividend
      Policy**




We
      have
      not paid any cash dividends on our common stock and have no present intention
      of
      paying any dividends on the shares of our common stock. Our current policy
      is to
      retain earnings, if any, for use in our operations and in the development of
      our
      business. Our future dividend policy will be determined from time to time by
      our
      board of directors.




**Equity
      Compensation Plans**




Under
      our
      2007 Stock Option Plan (the “Plan”) 10,613,136 stock options were issued to the
      grantees (the “Grantees”), 2,363,893 of which had been exercised (“Option
      Exercises”) and 2,000 have expired. As part of the Option Exercises we received
      promissory notes from William E. Schloth and Howard Kaplan totaling
      $95,000.




Up
      to
      8,252,852 shares of our common stock is available, as of September 26, 2008,
      for
      future issuance under the Plan. The maximum aggregate number of shares of our
      common stock that may be issued pursuant to the Plan is limited to 25% of the
      shares of common stock outstanding, which calculation is made on the first
      trading day of a new fiscal year; provided that, in any year no more than 8%
      of
      our common stock or derivative securitization with our common stock underlying
      8% of the common stock may be issued in any fiscal year.




7




**Equity
      Compensation Plan Information**





**Plan
                category**
            
            **Number of**
              **securities to**
              **be issued**
              **upon exercise**
              **of outstanding**
              **options,**
              **warrants and**
              **rights**
              **(a)**
            
            **Weighted-average**
              **exercise price of**
              **outstanding options,**
              **warrants and rights**(1)
              **(b)**
            
            **Number of**
              **securities**
              **remaining**
              **available for**
              **future issuance**
              **under**
              **equity**
              **compensation**
              **plans**
              **(excluding**
              **securities**
              **reflected in**
              **column (a))**
              **(c)**Equity
                compensation plans approved by security holders
            
            
            N/A
            
            
            N/A
            
            
            N/AEquity
                compensation plans not approved by security holders
            
            
            20,047,000
            
            $
            0.37
            
            
            N/A**Total**
            
            
            20,047,000
            
            $
            0.37




**Recent
      Sales of Unregistered Securities**




On
      April
      30 2008, as part of the conversion of a note holder’s $25,000 promissory note
      and accrued interest, we issued 93,189 restricted shares of common
      stock.





On
      May 5,
      2008 we issued 428,572 restricted shares of common stock to one investor as
      part
      of the investment of $150,000 into the Company. In connection with this
      investment we also issued 214,286 stock purchase warrants expiring five years
      from the date of issue and exercisable at $0.50 per share.





On
      June
      8, 2008, as part of a four-month executive sales and marketing consulting
      agreement, we issued 250,000 common stock purchase warrants to a consultant.
      The
      stock purchase warrants expire five years from the date of issue and are
      exercisable at $0.35 per share.





We
      issued
      the foregoing securities in reliance upon Regulation D and/or Section 4(2)
      of
      the Securities Act of 1933 to “accredited investors” (as that term is defined in
      Regulation D under the Securities Act of 1933).





**ITEM
      6.**  **MANAGEMENT’S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.**




**Overview**




You
      should read the following discussion of our financial condition and results
      of
      operations together with the audited financial statements and the notes to
      the
      audited financial statements included in this transition report. This discussion
      contains forward-looking statements that reflect our plans, estimates and
      beliefs. Our actual results may differ materially from those anticipated in
      these forward-looking statements.




We
      are
      engaged in the business of in interactive marketing optimization with a primary
      concentration on optimizing client online conversion rates. Our proprietary
      Persuasion Architecture® framework provides clients “blueprints” to plan,
      measure and improve their online sales and marketing efforts. The combination
      of
      the proprietary methodology and related software suite allows clients to convert
      more online traffic into leads, subscriptions and sales thereby improving the
      return on investment related to money spent on marketing.





**Basis
      of Presentation of Financial Information**




On
      October 30, 2007, we completed a share exchange with Future Now, Inc. and the
      former stockholders of Future Now, Inc. As a result of the share exchange,
      we
      abandoned our previous business and commenced the business of online marketing
      optimization and related software development. Because we are the successor
      business to Future Now, Inc. and because the operations and assets of Future
      Now, Inc. represent our entire business and operations from the closing date
      of
      the share exchange agreement, our management’s discussion and analysis and
      audited and unaudited financial statements are based on the consolidated
      financial results of Future Now, Inc. and its wholly owned subsidiary,
      Intellectual Property Licensing Group, Inc., for the relevant periods. Future
      Now, Inc. used to report on a calendar year basis. Commencing on the date of
      the
      share exchange, Future Now, Inc. has been reporting on a quarterly and year-end
      basis along with our year-end June 30.




8




**Trends
      in Our Business and Results of Operations**





The
      business we operate in is expanding rapidly. This expansion has been driven
      primarily by the increasing demand for our online business and marketing
      optimization services. During the past year whereby we were primarily focused
      on
      moving our software product offering to market we also saw a slight increase
      in
      our gross revenues. As we continue to move towards our software as a service
      business model and our customer base grows, we plan to make investments in
      further software development and in-house personnel necessary to support this
      growth. The rate at which we add new customers, along with how effectively
      and
      efficiently, will affect the level of the investments. Our revenue growth will
      depend on our ability to attract customers, to retain our customers over time
      and to sell additional service offering to our customer base. In addition to
      these factors that will impact our revenue growth, our profitability will also
      be affected by our ability to realize economies of scale as our business
      grows.




Our
      operating expenses are also increasing as we make further investments to support
      the anticipated growth of our customer base and continued intellectual property
      development. Our full-time employee headcount increased from 10 at June 30,
      2006
      to 20 at June 30, 2008. We expect operating expenses to continue increasing
      in
      total dollars, but to decline over time as a percentage of total revenues.
      We
      also expect our future operating expenses to increase in dollars due to the
      incremental salaries, benefits and expenses related to planned hiring plus
      operating expenses related to our strategic acquisition efforts.




During
      this past quarter, for the first time in our history we began certain out bound
      sales and marketing efforts. Prior to this, during the development stage of
      our
      intellectual property, our growth simply resulted from our reputation in the
      market place as well as the demand for our service offering. Going forward
      we
      plan to invest heavily in sales and marketing by increasing the number of sales
      personnel, the number of distribution channels, building further brand
      recognition through advertising, writing, speaking and other marketing
      initiatives. We expect that sales and marketing expenses will increase in both
      dollars as well as a percentage of overall operating expenses. Generally sales
      personnel are not immediately productive and sales and marketing expenses do
      not
      immediately result in revenues. Even thought this reduces short-term operating
      margins as marketing efficiency improves, more revenues and higher margins
      should result.





We
      anticipate that research and development expenses will increase in dollars
      as we
      continue to enhance our existing services and products as well as expand our
      overall offerings.




We
      anticipate that general and administrative expenses will increase in dollars
      as
      we add personnel and incur additional expenses to support the expansion of
      our
      business and operate as a public company.




We
      anticipate that stock-based compensation expenses will increase, both in
      absolute dollars and as a percentage of total revenues, as a result of our
      adoption of Statement of Financial Accounting Standards, or SFAS, No. 123R,
      Share-Based Payment. Beginning in the first quarter of 2006, SFAS No. 123R
      requires us to record compensation expense based on the fair value of stock
      awards at the date of grant. The actual amount of stock-based compensation
      expense we record in any fiscal period will depend on a number of factors
      including the number of shares subject to the stock options issued, the fair
      value of our common stock at the time of issuance and the volatility of our
      stock price over time.





Acquisition





On
      May
      28, 2008 we acquired all the outstanding voting common stock of Elemental
      Business, Inc (“EBI”). EBI is in the business of online marketing optimization
      utilizing its proprietary technology. We purchased EBI primarily to accelerate
      our software as a service deployment timeline and enhance our product offering
      by adding a subscription based model. The EBI acquisition also provided
      additional revenue and sales and account management personnel.





**Summary
      of Key Results**





Total
      revenues, including revenues from custom consulting, productized consulting,
      licensing and training and product and content sales for the audited year ended
      June 30, 2008 were $2,084,526 as compared to the revenues of $2,030,711 for
      the
      same period ending June 30, 2007.




Total
      cost of revenues for the audited year ended June 30, 2008 were $638,697 as
      compared to $558,916 for the same period ended June 30, 2007. Total operating
      expenses including sales and marketing expenses, stock based compensation and
      general and administrative expenses for the audited year ended June 30, 2008
      were $3,434,113, as compared to $1,396,883 for the same period ending June
      30,
      2007.




**Results
      of Operations**




***Twelve
      Months Ended June 30, 2008 compared to the Twelve Months Ended June 30,
      2007***




***Revenues
      and Cost of Revenues***




Total
      revenue for the year ending June 30, 2008 was $2,084,526, as compared to revenue
      of $2,030,711 for the same period ending June 30, 2007, representing an increase
      of $53,815 or 2.7%. The increase in revenues was primarily attributable to
      increased custom and productized consulting revenues.




Cost
      of
      revenues for the year ending June 30, 2008 were $638,697, as compared to cost
      of
      revenues of $558,916 for the same period ending June 30, 2007, representing
      an
      increase of $79,781, or 14.3%. Cost of revenues as a percent of total revenues
      for the year ending June 30, 2008 was 30.6%, compared with 27.5% for the same
      period ending June 30, 2007. Gross margins for the year ending June 30, 2008
      were 69.4%, as compared to 72.5% for the same period ending June 30, 2007,
      representing a decrease of 4.3%. The decrease in our gross margins was primarily
      due to increase hiring and training of our consultants as well as revisions
      to
      our product offerings.




9





***Operating
      Expenses***





Total
      operating expenses for the year ending June 30, 2008 were $3,434,113, as
      compared to total operating expenses of $1,396,883 for the same period ending
      June 30, 2008, representing an increase of $2,037,230 or 145.8%. Our total
      operating expenses were comprised of increased hiring, sales and marketing
      expenses and increased software development expenditures. Stock based
      compensation of $369,201 was also recorded for the year ended June 30, 2008
      versus $0 for the same period the prior year.




General
      and administrative expenses for the year ended June 30, 2008 were $2,188,440,
      as
      compared to general and administrative expenses of $1,033,984 for the same
      period ending June 30, 2007, representing an increase of $1,154,456 or 111.7%.
      The increase of general and administrative expenses during the year ending
      June
      30, 2008 was mainly due to increased hiring of personnel, increased compensation
      for management, increased travel and entertainment and legal and professional
      fees.




***Other
      Income and Expenses***




During
      the year ending June 30, 2008 we earned interest of $19,500 compared to $4,308
      of earned interest in the same period ending June 30, 2007. Interest expense
      for
      the year ending June 30, 2008 was $709,883 versus $18,112 for the same period
      ending June 30, 2007. Included in interest expense we also have recorded
      $420,622 and $5,132 for the amortization of debt discount for the year ended
      June 30, 2008 and 2007, respectively. We also recorded amortization of deferred
      offering costs for the year ended June 30, 2008 of $184,690 versus $4,295 for
      the same period ended June 30, 2007.





For
      the
      year ending June 30, 2008 we incurred expenses (net of book sales) of $1,580
      for
      publishing and book promotion, as compared to expenses (net of book sales)
      of
      ($157,171) for the same period ending June 30, 2008. The publishing and book
      promotions related to the book written by the founders of FNI, Jeffrey and
      Bryan
      Eisenberg, released in 2006 under the title, “Waiting for Your Cat to
      Bark?”





***Net
      Income***




Our
      net
      loss for the year ending June 30, 2008 was $1,904,673, as compared to a net
      income of $91,089 for the same period ending June 30, 2007, representing an
      increase of $1,995,762. Net loss as a percentage of total revenues was 91.6%
      for
      the year ending June 30, 2008, as compared to net income of 4.5% for the same
      period ending June 30, 2007. The increase in net loss during the year ending
      June 30, 2008 was primarily attributable to increased hiring, marketing and
      sales expenses and research and software development as well as interest and
      amortization expenses.





**Liquidity
      and Capital Resources**




**Cash
      Provided by Financing Activities**




During
      the period between March 1 and August 15, 2007, we raised $675,000 through
      the
      issuance of 10.5% convertible promissory notes and stock purchase warrants
      to 18
      separate note holders. Prior to the share exchange, one note holder converted
      $200,000 in principal. As a result, as of December 31, 2007, the outstanding
      face value with respect to the notes was $475,000. Prior to the closing of
      the
      share exchange, various note holders exercised an aggregate 1,110,000 warrants
      contributing $90,000 of additional funds to us.




The
      notes
      were issued as units. According to the original terms, each unit consisted
      of
      $50,000 promissory notes and warrants to purchase 148,000 pre-share exchange
      shares of our common stock at $0.08 per share. If the note conversion option
      was
      elected, each unit would convert into a minimum of 142,311 pre share exchange
      shares of our common stock at $0.35 per share.




Immediately
      following the closing of the share exchange, we raised $2,000,000 through the
      issuance of 11% convertible notes (the “New Notes”) and stock purchase warrants
      (the “New Warrants,” and together with the New Notes the “New Financing”). To
      facilitate the New Financing transaction and our recapitalization due to the
      share exchange, the early note holders agreed to certain amendments to the
      terms
      of their notes and warrants. As consideration for the amendments, the note
      holders received additional warrant certificates equal to 100% of the current
      warrants presently in their possession priced at the closing price of our common
      stock as of October 30, 2007, which was $0.35.





During
      September 2007, the Chief Operating Officer and Chief Financial Officer
      exercised 255,556 stock options and received, on a post Share Exchange basis
      2,363.893 shares of restricted common stock. We received $115,000 from the
      exercise of the options. In connection with the exercise, we issued $95,000
      in
      promissory notes, $25,000 to the Chief Operating Officer and $70,000 to the
      Chief Financial Officer.





On
      October 6, 2007, one of the 10.5% convertible note holders converted the
      remaining principal and interest into restricted common stock of the Company.
      The principal balance converted was $200,000. In connection with this
      transaction the note holder received 569,236 shares of common stock. On April
      30, 2008, one of the 10.5% convertible note holders converted the remaining
      principal and interest of $26,093 into 93,189 shares of common stock.




10




**Cash
      Flow Used in Operating Activities**




Operating
      activities used cash of $2,166,365 for the year ended June 30, 2008, as compared
      to cash used of $221,318 for the same period ending June 30, 2007. The increase
      in cash used for operating activities for the year ending June 30, 2008 was
      primarily a result of increased selling, operating losses as well as increases
      in prepaid expenses and deferred offering costs.




**Cash
      Flow Used in Investing Activities**




Investing
      activities used cash of $55,209 for the year ending June 30, 2008, as compared
      to cash used of $7,800 used for the year ending June 30, 2007. The cash used
      as
      of June 30, 2008 represented the leasehold improvements done on the Company’s
      offices at 55 Washington Street and certain computer and other office related
      equipment.




**Capital
      Expenditures**




Other
      than the $48,685 we spent on leasehold improvements related to our new office
      space in Brooklyn NY, we had no material capital expenditures during the year
      ended June 30, 2008.




**Off-Balance
      Sheet Arrangements**




We
      had no
      outstanding derivative financial instruments, off-balance sheet guarantees,
      interest rate swap transactions or foreign currency contracts. We do not engage
      in trading activities involving non-exchange traded contracts.




**Critical
      Accounting Policies**




Our
      discussion and analysis of the financial condition and results of operations
      are
      based upon Future Now Group Inc.’s financial statements, which have been
      prepared in accordance with generally accepted accounting principles in the
      United States (“GAAP”). The preparation of these financial statements requires
      us to make estimates and judgments that affect the reported amounts of assets,
      liabilities, revenues and expenses, and related disclosure of contingent assets
      and liabilities. We believe that the estimates, assumptions and judgments
      involved in the accounting policies described below have the greatest potential
      impact on our financial statements, so we consider these to be our critical
      accounting policies. Because of the uncertainty inherent in these matters,
      actual results could differ from the estimates we use in applying the critical
      accounting policies. Certain of these critical accounting policies affect
      working capital account balances, including the policies for revenue
      recognition, allowance for doubtful accounts, inventory reserves and income
      taxes. These policies require that we make estimates in the preparation of
      our
      financial statements as of a given date.





Within
      the context of these critical accounting policies, we are not currently aware
      of
      any reasonably likely events or circumstances that would result in materially
      different amounts being reported.





**Revenue
      Recognition**




We
      derive
      our revenue from the sale of products and services that we classify into the
      following three categories: (1) professional services; including, custom and
      packaged consulting; (2) licensing; and (3) training and product sales. We
      have
      traditionally sold our services, products and licenses through customer
      referrals. We utilize written contracts as the means to establish the terms
      and
      conditions upon which our products and services are sold to
      customers.




We
      recognize revenue in accordance with the American Institute of Certified Public
      Accountants (“AICPA”) Statement of Position (“SOP”) 97-2, Software Revenue
      Recognition, and related interpretations, SOP 98-9, Modification of SOP 97-2,
      Software Revenue Recognition, With Respect to Certain Transactions, and
      Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No.
      104 — Revenue Recognition. For arrangements outside the scope of SOP 97-2, the
      we evaluate if multiple elements can be accounted for separately in accordance
      with Emerging Issues Task Force (“EITF”) Issue No. 00-21, Accounting for Revenue
      Arrangements with Multiple Deliverables.




***Professional
      service revenues - Custom and Packaged Consulting
      Revenues***




Because
      we provide our applications as services, we follow the provisions of Securities
      and Exchange Commission Staff Accounting Bulletin (“SAB”) No. 104, Revenue
      Recognition, and Statement of Position (“SOP”) 97-2, Software Revenue
      Recognition. We recognize revenue when all of the following conditions are
      met:




·
            there
                is persuasive evidence of an
                arrangement;




·
            the
                service has been provided to the
                customer;




11




·
            the
                collection of the fees is reasonably assured;
                and




·
            the
                amount of fees to be paid by the customer is fixed or
                determinable.




We
      recognize revenue resulting from professional services sold with licensing
      offerings (generally considered to be at the time of, or within 45 days of,
      sale
      of the licensing offering) over the term of the related professional services
      contract as these services are considered to be inseparable from the licensing
      service, and we have not yet established objective and reliable evidence of
      fair
      value for the undelivered element. Since we cannot allocate a fair value to
      the
      various elements of our contracts based on vendor-specific objective evidence,
      we recognize revenue in accordance with contract accounting under the
      percentage-of-completion method. The professional service component of the
      monthly payment project is recognized as the services are performed. We
      recognize revenues resulting from professional services sold separately from
      the
      licensing services as those professional services are performed.




***Licensing
      and Training Revenues***




We
      derive
      our licensing revenue from selling software and methodology licenses to
      customers. We do not provide custom software development services or create
      tailored products to sell to specific customers. The software licenses are
      sold
      with certain post-contract services, installation and training. As such, the
      combination of these products and services represent a “multiple-element”
arrangement for revenue recognition purposes. Since we cannot allocate a fair
      value to the various elements of our contracts based on vendor-specific
      objective evidence, we recognize revenue in accordance with contract accounting
      under the percentage-of-completion method.





***Product
      and content sales***




We
      derive
      our product and content revenue from book and Internet downloadable product
      sales. Such sales are recognized at the point of sale.




**Deferred
      Revenues**




Deferred
      revenues consist of billings or payments received in advance of revenue
      recognition for our professional services, licensing and training services
      described above and we recognize them as revenue only when the revenue
      recognition criteria are met.




**Long-Lived
      Assets - Including Identified Intangible Assets with Finite
      Lives**




Intangible
      assets with finite lives are amortized using the straight-line method over
      the
      estimated economic lives of the assets, ranging from two to eight years. In
      accordance with SFAS 144, the Company reviews long-lived assets to be held
      and
      used for impairment whenever there is an indication that the carrying amount
      may
      not be recoverable from future estimated cash flows.




This
      standard requires an impairment analysis when indicators of impairment are
      present. If such indicators are present, the standard indicates that if the
      sum
      of the future expected cash flows from the asset, undiscounted and without
      interest charges, is less than the carrying value, an asset impairment must
      be
      recognized in the financial statements. The amount of the impairment is the
      difference between the fair value of the asset and the carrying value of the
      asset. We believe that the accounting estimate related to an asset impairment
      is
      a “critical accounting estimate” because it is highly susceptible to change from
      period to period and requires management to make assumptions about future cash
      flows, and because the impact of recognizing an impairment could have a
      significant effect on operating results. Management’s assumptions about future
      cash flows require significant judgment because actual operating levels have
      fluctuated in the past and are expected to continue to do so in the
      future.




Intangible
      assets and related amortization associated with certain financings done by
      us
      are reported in deferred offering costs within the financial statements and
      are
      being amortized over the related life of the financial instrument. We also
      are
      carrying an investment in an unconsolidated subsidiary at costs as a separate
      line in the financial statements. We have reviewed the most current financial
      information related to the investment as well as projected financial results
      and
      have determined that no impairment exists relating to the investment as of
      December 31, 2007. We are carrying this investment, at cost, in the amount
      of
      $82,000.




**Debt
      Obligations with Warrants**




Between
      the period of March 2007 and August 15, 2007, pursuant to an investment
      subscription agreement and closing documents (the “Offering”), we offered for
      sale three year 10.5% convertible promissory notes (the “Notes”), convertible
      into shares of our common stock. In the Offering we sold units consisting of
      $50,000 in Notes and seven-year warrants to purchase 148,000 shares of our
      Common Stock, at an exercise price of $0.75 per share (the “Warrants”). We
      issued Notes with a face amount of $675,000 and 1,998,000 Warrants. Under a
      placement agent agreement related to the Offering, we also issued placement
      agent warrants (“Placement Warrants”) in the amount of 260,489,161.




12




In
      accordance with GAAP, we estimated the fair value of the Notes, Warrants and
      Placement Warrants. The initial fair value of the Notes reflected a fair value
      adjustment to the Notes for the estimated fair value of the Warrants issued
      in
      connection with this debt. The estimated fair value of the Warrants at the
      date
      of issuance, using the Black-Scholes valuation method, was $99,800, and has
      been
      recorded as a debt discount against the face value of the $675,000 Notes. This
      discount is being amortized as interest expense over the three-year term of
      the
      Notes. The initial fair value of the Placement Warrants that we are obligated
      to
      issue, using the Black Scholes valuation method, was $15,349, and has been
      recorded as deferred offering costs on the financial statements. The amount
      is
      being amortized over the three- year term of the Notes.





In
      connection with the share exchange, we received additional funding of $2,000,000
      through the issuance of two year 11% convertible notes (“New Notes”) and stock
      purchase warrants (“New Warrants”) (both collectively, the “New Financing”).
      Along with the $2,000,000 face value of the notes we issued 5,714,286 warrants
      with one-half exercisable at $0.35 and the other half at $0.50 with an
      expiration date that is five years from the date of issuance. Under a placement
      agent agreement amendment related to the New Financing, we also issued five-year
      placement agent warrants (“New Placement Warrants”) in the amount of 571,429
      with an exercise price of $0.35.




In
      accordance with GAAP, we estimated the fair value of the New Notes, New Warrants
      and New Placement Warrants. The initial fair value of the New Notes reflected
      a
      fair value adjustment to the New Notes for the estimated fair value of the
      New
      Warrants issued in connection with this debt. The estimated fair value of the
      New Warrants at the date of issuance, using the Black-Scholes valuation method,
      was $1,213,086 and has been recorded as a debt discount against the face value
      of the $2,000,000 New Notes. This discount is being amortized as interest
      expense over the three-year term of the Notes. The initial fair value of the
      New
      Placement Warrants that the Company is obligated to issued, using the Black
      Scholes valuation method, was $308,315, and has been recorded as deferred
      offering costs on the financial statements. The amount is being amortized over
      the two-year term of the New Notes.




**Stock-Based
      Compensation**




Stock-based
      compensation is a critical accounting policy for us, due primarily to the
      significant judgment required when estimating the fair value of stock-based
      compensation awards, including the selection of a valuation method (e.g .
      Black-Scholes) and the underlying assumptions within such valuation (e.g.
      estimated lives and volatility).




On
      January 1, 2006 we adopted SFAS 123(R) using the modified-prospective transition
      method. Under this transition method, compensation cost recognized during the
      year ended December 31, 2006 includes: (a) compensation cost for all share-based
      awards granted prior to, but not yet vested as of, January 1, 2006 (including
      awards granted prior to January 1, 2003), based on the grant-date fair values
      and related service periods estimated in accordance with the original provisions
      of SFAS 123 and (b) compensation cost for all share-based awards granted
      subsequent to January 1, 2006, based on the grant-date fair values and related
      service periods estimated in accordance with the provisions of SFAS
      123(R).




SFAS
      123(R) clarifies and expands the guidance in SFAS 123 in several areas,
      including measuring fair value and attributing compensation cost to reporting
      periods. Changes prescribed by SFAS 123(R) include a requirement that we
      estimate forfeitures of share-based awards at the date of grant, rather than
      recognizing forfeitures as incurred as permitted by SFAS 123.




The
      fair
      values of restricted share rights are determined using the closing price of
      our
      common stock on the date of grant, while the fair values of stock options and
      stock purchase awards are estimated at the date of grant using the Black-Scholes
      option-pricing model. The estimated fair values of awards are amortized over
      the
      vesting period of the applicable award.




Effective
      July 17, 2007, we adopted the 2007 Stock Option Plan (the “Plan”). Subsequent to
      June 30, 2007, we have issued stock options related to the Plan and have
      accounted for such options as provided for above.




***Allowances
      for Accounts Receivable***




We
      record
      a sales allowance to provide for estimated future adjustments to receivables,
      generally resulting from credits issued to customers in conjunction with
      amendments or renewals of subscription service arrangements. We record
      provisions for sales allowances as a reduction to revenues. Specific provisions
      are made based on amendments or renewals associated with specific subscription
      service arrangements, which are expected to result in the issuance of customer
      credits. Additionally, provisions are made based on actual credits issued as
      a
      percentage of our historical revenues. We evaluate the estimate of sales
      allowances on a regular basis and adjust the amount reserved
      accordingly.





We
      make
      judgments as to our ability to collect outstanding receivables and provide
      allowances when collection becomes doubtful. Specific provisions are made based
      on an account-by-account analysis of collectibility. Additionally, we make
      provisions for non-customer-specific accounts based on our historical bad debt
      experience and current economic trends. We record provisions in operating
      expenses. We write off customer accounts receivable balances to the allowance
      for doubtful accounts when it becomes likely that we will not collect the
      receivable from the customer.




***Income
      Taxes***




We
      make
      estimates to determine our current provision for income taxes, as well as
      deferred tax assets and liabilities, income taxes payable and any valuation
      allowances. Our estimates related to our current provision for income taxes
      are
      based on current tax laws. Changes in tax laws or our interpretation of tax
      laws
      could impact the amounts provided for income taxes in our financial statements.
      We assess the likelihood that we will be able to recover our deferred tax
      assets. Realization of our deferred tax assets is dependent upon future taxable
      income as well as our use of prudent and feasible tax planning strategies.
      Our
      estimates regarding future profitability may change due to future market and
      industry conditions, changes in tax laws and other factors. We consider all
      available evidence, both positive and negative, including historical levels
      of
      income, expectations and risks associated with estimates of future taxable
      income, changes in tax laws, ongoing prudent and feasible profits and our stock
      price. To the extent we believe it is more likely than not that some portion
      or
      all of our net deferred tax assets will not be realized, we establish a
      valuation allowance against the deferred tax assets. To the extent we establish
      or change a valuation allowance in a period, we reflect the change with a
      corresponding increase or decrease to our tax provision in the consolidated
      statement of operations.




13




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





Report
                of Independent Registered Public Accounting Firm
            F-1Consolidated
                Balance Sheets as of June 30, 2008 and 2007
            F–2Consolidated
                Statements of Operations for the years ended June 30, 2008 and
                2007
            F–3Consolidated
                Statement of Changes in Stockholders’ Equity (Deficit) for the years ended
                June 30, 2008 and 2007
            F–4Consolidated
                Statements of Cash Flows for the years ended June 30, 2008 and
                2007
            F–5Notes
                to Financial Statements
            F–6




14


**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**




To
        the
        Board of Directors and
 Stockholders
        of Future Now Group Inc.,
  We
        have
        audited the accompanying balance sheets of Future Now Group Inc. and
        Subsidiaries as of June 30, 2008 and 2007, and the related statements of
        operations, stockholders’ equity (deficit), and cash flows for each of the years
        in the two-year period ended June 30, 2008. Future Now Group Inc.’s management
        is responsible for these financial statements. Our responsibility is to express
        an opinion on these financial statements based on our audits.
  We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. The company is not required
        to
        have, nor were we engaged to perform, an audit of its internal control over
        financial reporting. Our audit included consideration of internal control
        over
        financial reporting as a basis for designing audit procedures that are
        appropriate in the circumstances, but not for the purpose of expressing an
        opinion on the effectiveness of the company’s internal control over financial
        reporting. Accordingly, we express no such opinion. An audit also includes
        examining, on a test basis, evidence supporting the amounts and disclosures
        in
        the financial statements, assessing the accounting principles used and
        significant estimates made by management, as well as evaluating the overall
        financial statement presentation. We believe that our audits provide a
        reasonable basis for our opinion.
  In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of Future Now Group Inc. and
        Subsidiaries as of June 30, 2008 and 2007, and the results of its operations
        and
        its cash flows for each of the years in the two-year period ended June 30,
        2008
        in conformity with accounting principles generally accepted in the United
        States
        of America.


/s/
                Rosenberg Rich Baker Berman & CompanyBridgewater,
                NJSeptember
                25, 2008




F-1


**Future
      Now Group Inc. and Subsidiaries**


**Consolidated
      Balance Sheets**


**June
      30, 2008 and 2007**





6/30/08
            
            6/30/07ASSETSCURRENT
                ASSETS:Cash
                and cash equivalents
            
            $
            228,467
            
            $
            640,041Investment
                in available for sale marketable securities
            
            
            60,266
            
            
            -Accounts
                receivable, net
            
            
            289,299
            
            
            322,441Note
                receivable
            
            
            53,115
            
            
            -Prepaid
                interest
            
            
            219,996
            
            
            -Prepaid
                and other current assets
            
            
            30,007
            
            
            -Income
                tax receivable
            
            
            -
            
            
            7,481TOTAL
                CURRENT ASSETS
            
            
            881,150
            
            
            969,963Fixed
                assets, net
            
            
            44,706
            
            
            5,300Investment
                in unconsolidated subsidiary, at cost
            
            
            82,000
            
            
            82,000Deferred
                offering costs, net
            
            
            250,342
            
            
            73,013Deferred
                tax asset
            
            
            1,037,985
            
            
            17,501Intangible
                asset, net
            
            
            398,611
            
            
            -Goodwill
            
            
            185,717
            
            
            -Security
                deposits an other assets
            
            
            41,603
            
            
            2,730Prepaid
                interest
            
            
            73,340
            
            
            -TOTAL
                ASSETS
            
            $
            2,995,454
            
            $
            1,150,507LIABILIATIES
                AND STOCKHOLDERS' EQUITYCURRENT
                LIABILITIES:Accounts
                payable and accrued expenses
            
            $
            384,820
            
            $
            212,186Deferred
                revenue
            
            
            116,723
            
            
            27,600Income
                tax payable
            
            
            1,350
            
            
            -Current
                portion of long-term debt
            
            
            1,300,000
            
            
            -TOTAL
                CURRENT LIABILITIES
            
            
            1,802,893
            
            
            239,786Deferred
                licensing fees
            
            
            -
            
            
            33,334Convertible
                debentures, net of discount
            
            
            262,319
            
            
            537,758TOTAL
                LIABILITIES
            
            
            2,065,212
            
            
            810,878STOCKHOLDERS'
                EQUITY:Preferred
                stock, $.001 par value, 50,000,000 shares authorized, none issued
                and
                outstanding
            
            
            -
            
            
            -Subscription
                receivable
            
            
            (95,000
            )
            
            (800
            )Common
                stock, $.001 par value, 900,000,000 shares authorized, 75,463,952
                and
                44,400,000 shares issued and outstanding, as of June 30, 2008 and
                2007,
                respectively
            
            
            75,464
            
            
            44,400Additional
                paid-in capital
            
            
            2,933,258
            
            
            285,099Retained
                earnings
            
            
            (1,893,743
            )
            
            10,930Accumulated
                other comprehensive loss
            
            
            (89,737
            )
            
            -TOTAL
                STOCKHOLDERS' EQUITY
            
            
            930,242
            
            
            339,629TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY
            
            $
            2,995,454
            
            $
            1,150,507





**See
      Accompanying Notes to Audited Consolidated Financial
      Statements**


F-2




**Future
      Now Group Inc. and Subsidiaries**


**Consolidated
      Statements of Operations**


**for
      the Years Ended June 30, 2008 and 2007**





Twelve
              Months
              Ended June
              30, 2008
            
            Twelve
              Months
              Ended June
              30, 2007**Revenues:**Custom
                Consulting
            
            $
            1,222,363
            
            $
            745,862Productized
                consulting
            
            
            569,235
            
            
            928,021Licensing
                and training
            
            
            292,928
            
            
            241,128Product
                and content sales
            
            
            0
            
            
            115,700**Total
                Revenues**
            
            
            2,084,526
            
            
            2,030,711**Cost
                of Revenues**
            
            
            638,697
            
            
            558,916**Gross
                Profit**
            
            
            1,445,830
            
            
            1,471,795**Operating
                expenses:**Marketing
                and sales
            
            
            360,112
            
            
            58,038Research
                and development
            
            
            516,360
            
            
            304,861Stock
                based compensation
            
            
            369,201
            
            
            -General
                and administrative
            
            
            2,188,440
            
            
            1,033,984**Total
                operating expenses**
            
            
            3,434,113
            
            
            1,396,883**Net
                operating income (loss)**
            
            
            (1,988,283
            )
            
            74,912**Other
                (income) expenses**Interest
                expense
            
            
            690,383
            
            
            13,804Amortization
                of deferred financing costs and intangibles
            
            
            196,079
            
            
            4,295Other
                expense
            
            
            82,809
            
            
            3,471Realized
                capital gains
            
            
            (35,326
            )
            
            -Publishing
                and book promotion(net of sales)
            
            
            1,580
            
            
            (157,172
            )**Total
                other expenses (income)**
            
            
            935,525
            
            
            (135,602
            )**Income
                (loss) before taxes**
            
            
            (2,923,808
            )
            
            210,514**Income
                tax provision (benefit)**
            
            
            (1,019,135
            )
            
            119,425**Net
                income (loss) applicable to common shareholders**
            
            $
            (1,904,673
            )
            $
            91,089Comprehensive
                loss:Unrealized
                loss on available for sale marketable securities
            
            
            (89,737
            )
            
            -Total
                comprehensive income (loss)
            
            $
            (1,994,410
            )
            $
            91,089Net
                (loss) income per share - basic and diluted
            
            
            (0.03
            )
            
            0.00Weighted
                number of shares outstandingBasic
            
            
            62,759,669
            
            
            40,720,330diluted
            
            
            -
            
            
            -




**See
      Accompanying Notes to Audited Consolidated Financial
      Statements**


F-3




**Future
      Now Group Inc. and Subsidiaries**


**Consolidated
      Statement of Changes in Stockholders’ Equity (Deficit)**


**for
      the Years Ended June 30, 200** **8
      and 2007**





Preferred Stock
            
            Common
            
            Paid-In
            
            Accum
              Comp
            
            Sub
            
            Retained
            
            Stockholders'Shares
            
            Par
              Value
            
            Shares
            
            Par Value
            
            Capital
            
            Loss (Inc)
            
            Rec'b
            
            Earnings
              (Deficit)
            
            Equity
              (Deficit)Balance
                June 30, 2006
            
            
            -
            
            $
            -
            
            
            37,000,000
            
            $
            37,000
            
            $
            (39,601
            )
            $
            -
            
            $
            (1,360
            )
            $
            (80,159
            )
            $
            (84,120
            )Share
                Exchange
            
            
            -
            
            
            -
            
            
            7,400,000
            
            
            7,400
            
            
            218,114
            
            
            
            
            
            560
            
            
            
            
            
            226,074Issuance
                of placement agent warrants
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            14,212
            
            
            
            
            
            
            
            
            
            
            
            14,212Warrants
                issued for debt discount in convertible debt offering
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            92,374
            
            
            
            
            
            
            
            
            
            
            
            92,374Net
                loss for Period
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            91,089
            
            
            91,089Balance,
                June 30, 2007
            
            
            -
            
            $
            -
            
            
            44,400,000
            
            $
            44,400
            
            $
            285,099
            
            $
            -
            
            $
            (800
            )
            $
            10,930
            
            $
            339,629Issuance
                of stock options
            
            
            -
            
            
            -
            
            
            
            
            
            
            
            
            361,865
            
            
            
            
            
            
            
            
            
            
            
            361,865Issuance
                of additional placement agent warrants
            
            
            -
            
            
            -
            
            
            
            
            
            
            
            
            1,137
            
            
            
            
            
            
            
            
            
            
            
            1,137Issuance
                of warrants with convertible debt
            
            
            -
            
            
            -
            
            
            
            
            
            
            
            
            912,259
            
            
            
            
            
            
            
            
            
            
            
            912,259Conversion
                of convertible note
            
            
            -
            
            
            -
            
            
            675,939
            
            
            676
            
            
            225,418
            
            
            
            
            
            
            
            
            
            
            
            226,094Exercise
                of warrants
            
            
            -
            
            
            -
            
            
            1,110,000
            
            
            1,110
            
            
            88,890
            
            
            
            
            
            
            
            
            
            
            
            90,000Exercise
                of stock options
            
            
            -
            
            
            -
            
            
            2,363,893
            
            
            2,364
            
            
            112,635
            
            
            
            
            
            (95,000
            )
            
            
            
            
            19,999Issuance
                of additional warrants bridge notes
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            209,662
            
            
            
            
            
            
            
            
            
            
            
            209,662Recapitalization
                due to reverse merger
            
            
            -
            
            
            -
            
            
            22,785,548
            
            
            22,785
            
            
            (23,585
            )
            
            
            
            
            800
            
            
            -
            
            
            (0
            )Issuance
                of stock for share purchase
            
            
            
            
            
            
            
            
            428,572
            
            
            429
            
            
            149,571
            
            
            
            
            
            
            
            
            
            
            
            150,000Elemental
                business acquisition
            
            
            
            
            
            
            
            
            3,700,000
            
            
            3,700
            
            
            588,300
            
            
            
            
            
            
            
            
            
            
            
            592,000Issuance
                of warrants for services
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            22,007
            
            
            
            
            
            
            
            
            
            
            
            22,007Change
                in fair value of marketable securities
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (89,737
            )
            
            
            
            
            
            
            
            (89,737
            )Net
                loss for period
            
            
            -
            
            
            -
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1,904,673
            )
            
            (1,904,673
            )Balance
                June 30, 2008
            
            
            0
            
            $
            -
            
            
            75,463,952
            
            $
            75,464
            
            $
            2,933,258
            
            $
            (89,737
            )
            $
            (95,000
            )
            $
            (1,893,743
            )
            $
            930,242





**See
      Accompanying Notes to Audited Consolidated Financial
      Statements**


F-4


**Future
      Now Group Inc. and Subsidiaries**


**Consolidated
      Statements of Cash Flows**


**for
      the Years ended June 30, 2008 and 2007**





Year Ended
              June 30,
              2008
            
            Year Ended
              June 30,
              2007**CASH
                FLOWS FROM OPERATING ACTIVITIES:****Net
                income (loss)**
            
            $
            (1,904,673
            )
            $
            91,089**Adjustments
                to reconcile net income (loss) to cash used in operating
                activities:**Change
                in deferred tax asset
            
            
            (1,020,484
            )
            
            240,031Realized
                gain on sales of investment
            
            
            (35,326
            )
            
            -Provision
                for doubtful accounts
            
            
            54,500
            
            
            20,000Stock
                based compensation
            
            
            369,201
            
            
            -Depreciation
            
            
            10,894
            
            
            2,500Minority
                interest in subsidiaries
            
            
            -
            
            
            (219,919
            )Amortization
                of prepaid interest
            
            
            146,667
            
            
            -Amortization
                of debt discount
            
            
            420,622
            
            
            5,132Amortization
                of intangibles
            
            
            11,389
            
            
            -Amortization
                of deferred offering costs
            
            
            184,691
            
            
            4,295**Change
                in operating assets and liabilities:**Accounts
                receivable
            
            
            (67,352
            )
            
            (108,839
            )Prepaid
                and other current assets
            
            
            (331,340
            )
            
            0Deferred
                offering costs
            
            
            (180,667
            )
            
            (73,013
            )Income
                tax receivables/payable
            
            
            8,831
            
            
            (21,125
            )Accounts
                payable and accrued expenses
            
            
            149,765
            
            
            (158,878
            )Deferred
                licensing fees
            
            
            (33,334
            )
            
            (10,714
            )Deferred
                revenue
            
            
            89,123
            
            
            2,766Security
                deposit
            
            
            (38,872
            )
            
            5,357**Net
                cash provided by (used in) operating activities**
            
            **$**
            **(2,166,365**
            **)**
            **$**
            **(221,318**
            **)****CASH
                FLOW FROM INVESTING ACTIVITIES:**Issuance
                of revolving credit facility
            
            
            (45,115
            )
            
            -Proceeds
                from sale of investment
            
            
            35,326
            
            
            -Cash
                acquired in EBI transaction
            
            
            4,880
            
            
            -Equipment
                purchases and leasehold improvements
            
            
            (50,300
            )
            
            (7,800
            )**Net
                cash provided by (used in) investing activities**
            
            **$**
            **(55,209**
            **)**
            **$**
            **(7,800**
            **)****CASH
                FLOW FROM FINANCING ACTIVITIES:**Dividend
                payment
            
            
            -
            
            
            (1,705
            )Proceeds
                from stock option exercises
            
            
            20,000
            
            
            -Proceeds
                from sale of common stock
            
            
            150,000
            
            
            -Proceeds
                from warrant exercises
            
            
            90,000
            
            
            -Proceeds
                from issuance of convertible debentures
            
            
            1,550,000
            
            
            625,000**Net
                cash provided by (used in) financing activities**
            
            $
            1,810,000
            
            $
            623,295**NET
                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS**
            
            
            (411,574
            )
            
            394,177**CASH
                AND CASH EQUIVALENTS at beginning of period**
            
            
            640,041
            
            
            245,864**CASH
                AND CASH EQUIVALENTS at end of period**
            
            **$**
            **288,467**
            
            **$**
            **640,041**Supplemental
                disclosure of cash flow informationCash
                paid for:Interest
            
            $
            47,242
            
            
            -Income
                Taxes
            
            $
            1,250
            
            $
            15,400Supplemental
                schedule of non-cash investing and financing
                activitiesDeferred
                offering warrant costs
            
            $
            172,341
            
            
            -Debt
                discount on convertible notes
            
            $
            611,971
            
            
            -Conversion
                of convertible debt
            
            $
            225,000
            
            
            -Promissory
                notes issued for option purchases
            
            $
            95,000
            
            
            -Prepaid
                interest and deferred offering withheld from gross proceeds from
                the
                issuance of convertible debentures
            
            $
            550,000
            
            
            -Receipt
                of Marketable Securities for Engagement Terms
            
            $
            150,000
            
            
            -Acquisition
                of Elemental Business, Inc.
            
            $
            592,000
            
            
            -Conversion
                of accounts receivable into equity
            
            
            
            
            $
            82,000





**See
      Accompanying Notes to Audited Consolidated Financial
      Statements**


F-5


**FUTURE
      NOW GROUP, INC. and SUBSIDIARIES**


**NOTES
      TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS**


**AS
      OF JUNE 30, 2008**




**Note
      1. The Company and Nature of Business**




Future
      Now Group, Inc. (the “Company”) through its wholly-owned subsidiaries, Future
      Now, Inc (“FNI”), Intellectual Property Licensing Group, Inc,(“IPLG”), and
      Elemental Business, Inc (“EBI”), provides online marketing optimization services
      and software solutions utilizing a proprietary methodology and supporting set
      of
      software tools that help businesses improve their online marketing to generate
      more sales, leads, and subscriptions. The Company’s proprietary Persuasion
      Architecture® framework delivers clients “blueprints” to plan, measure and
      improve their online sales and marketing initiatives.




Through
      a rights contribution, technical cooperation
      and non-compete agreement (the “Rights Agreement”) dated as of October 3, 2003,
      the Company contributed its MAP Tools to its then majority owned subsidiary,
      IPLG (formerly, Persuasion Architecture, Inc.) in return for 3,250,000 shares
      of
      IPLG. Through the Rights Agreement, the Company assigned and transferred to
      IPLG
      all right, title and interest in any patent rights. Technology, improvement
      patent and all intellectual property rights related to MAP Tools (all
      collectively, “Intellectual Property”). The Company intends to maintain all its
      Intellectual Property in IPLG and licensing and perform training through
      IPLG.




On
      December 29, 2006, the Company completed a share
      exchange (the “Share Exchange”) with IPLG whereby an additional 800,000 of the
      Company’s Common Stock was issued and allocated proportionately to the then
      existing stockholders of IPLG. As a result of the transaction, IPLG became
      a
      100% owned subsidiary. IPLG holds the intellectual property rights to MAP Tools
      and will hold further intellectual property improvements and new developments.
      It is the intention of the Company to handle all its licensing related
      activities out of IPLG.




On
      October 30, 2007, the Company entered into a share exchange agreement with
      FNI,
      which included FNI’s wholly owned subsidiary IPLG and the shareholders of FNI.
      The closing of the transactions contemplated in the share exchange agreement
      and
      the acquisition of all of the issued and outstanding shares of common stock
      of
      FNI occurred on October 30, 2007. In accordance with the closing of the share
      exchange, the Company issued 50,394,191 shares of its common stock to the
      shareholders of FNI, in exchange for all of the issued and outstanding shares
      of
      common stock of FNI, on the basis of one share of the Company’s common stock for
      one share of common stock of FNI.




The
      consolidated statement of changes in stockholders equity (deficit) have been
      revised to show the effect on the outstanding shares resulting from the reverse
      merger which occurred on October 30, 2007. The effect on the outstanding shares
      is based on the 9.25 common shares of the Company for every one share of FNI
      common stock. In addition, where required all share amounts have been revised
      to
      reflect the 9.25 common shares of the Company for every one share of FNI common
      stock.




The
      Company had 71,242,191 shares of common stock issued and outstanding as of
      October 30, 2007 as a result of the issuance of 50,394,191 shares of common
      stock in connection with the closing of the share exchange and the concurrent
      cancellation of 32,000,000 shares of common stock owned by former directors
      of
      the Company. As of the closing date of the share exchange, the former
      shareholders of FNI. held approximately 70.74% of the Company’s issued and
      outstanding shares of common stock. The issuance of the 50,394,191 shares of
      common stock to the former shareholders of FNI. was deemed to be a reverse
      acquisition for accounting purposes. Accordingly, FNI, the accounting acquirer
      entity, is regarded as the Company’s predecessor entity as of October 30, 2007.
      As a result of the exchange of the FNI. stock in exchange for the Company’s
      stock, FNI. became the Company’s wholly owned subsidiary. The Company will
      continue to file annual and quarterly reports based upon its fiscal year end
      of
      June 30. As of the closing date of the share exchange, the Company is engaged
      in
      the business of FNI, providing optimization services that help businesses
      improve their online marketing to generate more sales, leads and subscriptions.
      The transaction was accounted for as a reverse merger and accordingly the
      historical information is that of FNI.





On
      May
      28, 2008, the Company completed a share exchange with EBI whereby the Company
      purchased all the outstanding common stock of EBI in exchange for the issuance
      of 3,700,000 shares of its Common Stock.


F-6


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




***Use
      of Estimates***




The
      consolidated financial statements of the Company have been prepared using
      accounting principles generally accepted in the United States of America. These
      principles require management to make estimates and assumptions that affect
      the
      reported amounts of assets and liabilities, the disclosure of contingent assets
      and liabilities, and reported amounts of revenue and expenses. Actual results
      could differ from those estimates.




***Principles
      of Consolidation***




The
      consolidated financial statements include the accounts of FNI, IPLG and EBI.
      All
      inter-company balances and transactions have been eliminated in the consolidated
      financial statements.




***Concentration
      of Risk***




The
      Company’s financial instruments that are exposed to concentrations of credit
      risk consist primarily of cash and cash equivalents, short-term marketable
      securities, long-term investments and trade accounts receivable. Although the
      Company deposits its cash with multiple financial institutions, its deposits,
      at
      times, may exceed federally insured limits. For the year ended June 30, 2008,
      one customer represented 11% of our gross revenue.




***Fixed
      Assets***




Fixed
      assets consists of leasehold improvements and office equipment and is stated
      at
      cost less accumulated depreciation. Depreciation is determined by using the
      straight-line method over the estimated useful lives of the related assets,
      generally two to five years or the lease term.




***Revenue
      Recognition***




The
      Company derives its revenue from the sale of products and services that it
      classifies into the following three categories: (1) professional services,
      including, custom & packaged consulting; (2) software subscriptions and
      licensing, and (3) training and product sales. The Company has
      traditionally sold its services, products and licenses through customer
      referrals. The Company utilizes written contracts as the means to establish
      the
      terms and conditions upon which its products and services are sold to
      customers.




The
      Company recognizes revenue in accordance with the American Institute of
      Certified Public Accountants (“AICPA”) Statement of Position (“SOP”) 97-2,
      Software Revenue Recognition, and related interpretations, SOP 98-9,
      Modification of SOP 97-2, Software Revenue Recognition, With Respect to Certain
      Transactions, and Securities and Exchange Commission (“SEC”) Staff Accounting
      Bulletin (“SAB”) No. 104 — Revenue Recognition. For arrangements outside the
      scope of SOP 97-2, the Company evaluates if multiple elements can be accounted
      for separately in accordance with Emerging Issues Task Force (“EITF”) Issue No.
      00-21, Accounting for Revenue Arrangements with Multiple
      Deliverables.




*Professional
      service revenues - Custom and Packaged Consulting Revenues*




Because
      the Company provides its applications as services, it follows the provisions
      of
      SAB No. 104, Revenue Recognition, and SOP 97-2, Software Revenue Recognition.
      The Company recognizes revenue when all of the following conditions are
      met:




§
            there
                is persuasive evidence of an
                arrangement;




§
            the
                service has been provided to the
                customer;




§
            the
                collection of the fees is reasonably assured;
                and




§
            the
                amount of fees to be paid by the customer is fixed or
                determinable.




The
      Company recognizes revenue resulting from professional services sold with
      licensing offerings (generally considered to be at the time of, or within 45
      days of, sale of the licensing offering) over the term of the related
      professional services contract as these services are considered to be
      inseparable from the licensing service, and the Company has not yet established
      objective and reliable evidence of fair value for the undelivered element.
      Since
      the Company cannot allocate a fair value to the various elements of its
      contracts based on vendor-specific objective evidence, the Company recognizes
      revenue in accordance with contract accounting under the
      percentage-of-completion method. The professional service component of the
      monthly payment project is recognized as the services are performed. The Company
      recognizes revenues resulting from professional services sold separately from
      the licensing services as those professional services are
      performed.




*Software
      Subscriptions and Licensing*




The
      Company derives its licensing revenue from selling software and methodology
      licenses to customers. The Company does not provide custom software development
      services or create tailored products to sell to specific customers. The software
      licenses are sold with certain post-contract services, installation and
      training. As such, the combination of these products and services represent
      a
“multiple-element” arrangement for revenue recognition purposes. Since the
      Company cannot allocate a fair value to the various elements of its contracts
      based on vendor-specific objective evidence, the Company recognizes revenue
      in
      accordance with contract accounting under the percentage-of-completion
      method.


F-7


*Training,
      Product, and Content sales*




The
      Company derives its product and content revenue from book and Internet
      downloadable product sales. Such sales are recognized at the point of
      sale.





*Deferred
      revenues*




Deferred
      revenues consist of billings or payments received in advance of revenue
      recognition for our professional services, licensing and training services
      described above and we recognize them as revenue only when the revenue
      recognition criteria are met.





*Equity/revenue
      sharing revenues*





The
      Company derives revenue through revenue and equity sharing arrangements
      (“RSP/ESP Agreement”) whereby the Company participates in online revenue
      (“Revenue Participation”) increases resulting from the Company’s recommendations
      and in an effort to reduce the cash outlay by clients might take some fees
      as
      equity ownership (“Equity Participation”) in clients. Along with all RSP/ESP
      Agreements the Company will also take cash payments for licensing, training
      and
      support services. The Company’s policy as it pertains to recognizing revenue
      related to, such revenue is recorded as it is earned based upon stages outlined
      in the RSP/ESP Agreement. During the year ended June 30, 2008, the Company
      entered into two RSP/ESP Agreements and has recorded the following revenue;
      (i)
      licensing fees of $30,000 (ii) support/training fees of $19,000; and (i)
      $150,000 worth of Equity Participation. The Company fully completed its
      obligations under one arrangement and is ongoing with the other.





The
      revenue booked for the Equity Participation was the market value of the Client’s
      public stock (“Market Value of Services”). As such the Company received 882,353
      of the client’s common stock that was than trading at $0.17 on the date the
      RSP/ESP Agreement was executed. The Client launched the new website on January
      17, 2008. The Company recorded the $150,000 market value of the Equity
      Participation during the quarter ended March 31, 2008 in the custom consulting
      line of the statement of operations. As part of the RSP/ESP Agreement a
      protection feature (“Restricted Share Adjustment”) was negotiated whereby if at
      any time during the service period of this RSP/ESP Agreement the market price
      (“Market Price”) of the publicly traded Common Stock (“Common Stock”) times the
      shares held paid to the Company drops to 70% of the Total Equity Based
      Compensation amount or less for ten (10) consecutive days then all work shall
      cease. The Client will have the option to make up the difference in cash or
      additional Restricted Shares to return the value paid to the Company to the
      agreed upon original Market Value of Service level within 30 days. If the Client
      chooses not to exercise this option then the default provisions of this RSP/ESP
      Agreement shall be in force. If the default provision is made effective or
      if
      the client fails to launch the new website, the Company would receive an
      additional $50,000 penalty cash payment. Based upon the traded market price
      of
      the client common stock in late February and early March, the client issued
      to
      the Company an additional 1,172,442 restricted shares. The value of the
      additional shares was marked at $85,588 and was reflected as an adjustment
      to
      the value of the Equity Participation on the face of the Balance Sheet in equity
      as accumulated comprehensive adjustment. During the quarter ended March 31,
      2008
      the Company recorded a loss adjustment of $119,186 to the equity section. The
      Company will record any realized gains or losses in its Statement of Operation
      related to the Equity Participation only when sold. The Company’s policy is to
      recognize any additional shares received as part of the Restricted Share
      Adjustment provision as an offset to unrealized losses as reflected in the
      accumulated comprehensive loss amount in the equity section. Under the
      Restricted Share Adjustment provision, the Company received an additional
      7,991,902 restricted shares in June that had a market value at the time of
      issuance of $119,879. As of June 30, 2008 the Company owed 10,046,697 restricted
      common stock of the client which represented approximately 7% of the outstanding
      voting stock of the client.





The
      Company will recognize the Revenue Participation upon receipt of the proceeds.
      For the quarter and year ended June 30, 2008, the Company recognized no revenue
      related to this provision.





***Cash
      and Cash Equivalents***




The
      Company considers all highly liquid investments with original maturities of
      three months or less to be cash and cash equivalents. Cash and cash equivalents
      are comprised of money market funds. The carrying amounts approximate fair
      value
      due to the short maturities of these instruments.




***Accounts
      Receivable***




The
      Company’s accounts receivable are derived from a large number of direct
      customers. Collateral is not required for accounts receivable. The Company
      maintains an allowance for potential credit losses as considered necessary.
      The
      allowance for potential credit losses was $104,500 and $50,000 as of June 30,
      2008 and 2007, respectively. The Company performs ongoing reviews of all
      customers that have breached their payment terms or for whom information has
      become available indicating a risk of non-recoverability. The Company records
      an
      allowance for bad debts for specific customers identified as well as an
      allowance based on its historical collection experience. The Company’s
      evaluation of the allowance for potential credit losses requires the use of
      estimates and the actual results may differ from these
      estimates.


F-8


***Research
      and Software Development Costs***




Costs
      incurred in the research and development of new software products and
      enhancements to existing software products are expensed as incurred until
      technological feasibility has been established. The Company determines
      technological feasibility when a working model has been completed. After
      technological feasibility is established, any additional costs are capitalized
      in accordance with SFAS No. 86, Accounting for the Costs of Computer Software
      to
      Be Sold, Leased or Otherwise Marketed, until the product is available for
      general release. The Company has not capitalized any research and software
      development costs because technological feasibility has not been established
      for
      software being developed during the period ended June 30, 2008.




***Goodwill
      and Intangible Assets***





The
      Company accounts for its goodwill and intangible assets pursuant to SFAS No.
      142, Goodwill and Other Intangible Assets.  Under SFAS 142,  intangibles
      with definite lives continue to be amortized on a straight-line basis over
      the
      lesser of their estimated useful lives or contractual terms. Goodwill and
      intangibles with indefinite lives are evaluated at least annually for
 impairment  by comparing the asset's estimated  fair value with
      its carrying  value,  based on cash flow methodology.





Intangibles
      with definite lives are subject to impairment testing in the event of certain
      indicators. Impairment in the carrying value of an asset is recognized whenever
      anticipated future cash flows (undiscounted) from an asset are estimated to
      be
      less than its carrying value.  The amount of the impairment recognized is
      the difference between the carrying value of the asset and its fair
      value.





***Cost
      of Revenues***




The
      Company’s cost of revenues primarily consists of personnel associated with the
      Company’s professional services as well as network operations.




***Income
      Taxes***




The
      Company provides for income taxes using the asset and liability method. Under
      this method, current income tax expense or benefit is the amount of income
      taxes
      expected to be payable or refundable for the current year. A deferred income
      tax
      asset or liability is computed for the expected future impact of differences
      between the financial reporting and tax bases of assets and liabilities and
      for
      the expected future tax benefit to be derived from tax credit and loss
      carry-forwards. Deferred tax assets are reduced by a valuation allowance when,
      in the opinion of management, it is more likely than not that some portion
      or
      all of the deferred tax assets will not be realized. The ultimate realization
      of
      future income tax assets is dependent upon the generation of sufficient future
      taxable income during the period in which the deferred tax assets are
      recoverable. Management assesses the likelihood that the deferred tax assets
      will be recovered from future taxable income and whether a valuation allowance
      is required to reflect any uncertainty. Management has determined that no such
      valuation allowance was necessary as of June 30, 2007. Realization is dependent
      on generating sufficient taxable income prior to expiration of the loss
      carry-forwards. Although realization is not assured, management believes it
      is
      more likely than not that all of the deferred tax asset will be realized. The
      amount of the deferred tax asset considered realizable, however, could be
      reduced in the near term if estimates of future taxable income during the
      carry-forward period are reduced. Tax rate changes are reflected in the
      computation of the income tax provision during the period such changes are
      enacted.




***Fair
      Value of Financial Instruments***




The
      carrying amounts reported in the consolidated balance sheets for cash, accounts
      receivable, income tax receivable, accounts payable and accrued expenses
      approximate their fair values due to the short term maturities of these
      financial instruments.




The
      fair
      value of the Company’s debt obligations approximates its carrying value as it is
      based on or about the current rates offered to the company for debt of the
      same
      maturities with similar collateral.




***Recent
      Accounting Pronouncements***





In
      June
      2006, the FASB issued FIN 48, Accounting for Uncertainty in Income Taxes-an
      Interpretation of FASB Statement No. 109.  This interpretation clarifies
      the accounting for uncertainty in income taxes recognized in an enterprise's
      financial statements. This interpretation prescribes a recognition threshold
      and
      measurement attribute for the financial statement recognition and measurement
      of
      a tax position taken or expected to be taken in a tax return. This
      Interpretation also provides guidance on derecognition, classification, interest
      and penalties, accounting in interim periods, disclosure, and transition. FIN
      48
      is effective for fiscal years beginning after December 15, 2006. As such, the
      Company adopted these provisions at the beginning of the fiscal year ended
      June
      30, 2008. Adoption of FIN 48 did not have a significant effect on the Company's
      financial statements.


F-9


In
      September 2006, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 157 ("FAS 157"), Fair Value Measurements,
      which defines fair value, establishes a framework for measuring fair value
      in
      generally accepted accounting principles("GAAP"), and expands disclosures about
      fair value measurements. FAS 157 applies under other accounting pronouncements
      that require or permit fair value measurements. Prior to FAS 157, there were
      different definitions of fair value and limited guidance for applying those
      definitions in GAAP. Moreover, that guidance was dispersed among the many
      accounting pronouncements that require fair value measurements. Differences
      in
      that guidance created inconsistencies that added to the complexity in applying
      GAAP. The changes to current practice resulting from the application of FAS
      157
      relate to the definition of fair value, the methods used to measure fair value,
      and the expanded disclosures about fair value measurements. FAS 157 is effective
      for financial statements issued for fiscal years beginning after November 15,
      2007, and interim periods within those fiscal years. The Company presently
      does
      not expect the adoption of FAS 157 to have an effect on its financial
      statements.





In
      February 2007, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 159 ("FAS 159"), The Fair Value Option for
      Financial Assets and Financial Liabilities, which permits entities to choose
      to
      measure many financial instruments and certain other items at fair value which
      are not currently required to be measured at fair value. FAS 159 is effective
      for financial statements issued for fiscal years beginning after November 15,
      2007, and interim periods within those fiscal years. The Company presently
      does
      not expect the adoption of FAS 159 to have an effect on its financial
      statements.





In
      December 2007, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 141R ("FAS 141R"), Business Combinations,
      which establishes principles and requirements for how the acquirer recognizes
      and measures in its financial statements the identifiable assets acquired,
      the
      liabilities assumed, and any non-controlling interest in the acquiree, goodwill
      acquired in the business combination or a gain from a bargain purchase. FAS
      141R
      is effective for which the acquisition date is on or after the beginning of
      the
      first annual reporting period beginning on or after December 15, 2008. The
      Company presently does not expect the adoption of FAS 141R to have an effect
      on
      its financial statements.





In
      December 2007, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 160 ("FAS 160"), non-controlling Interests
      in
      Consolidated Financial Statements, which establishes accounting and reporting
      standards for the non-controlling interest in a subsidiary and for the
      deconsolidation of a subsidiary. FAS 160 is effective for financial statements
      issued for fiscal years beginning on or after December 15, 2008, and interim
      periods within those fiscal years. The Company presently does not expect the
      adoption  of
      FAS
      160 to have an effect on its financial statements.





Management
      does not believe that any other recently issued, but not yet effective
      accounting pronouncements, if adopted, would have a material effect on the
      accompanying financial statements.





**Note
      3. Business Acquisition**





On
      May
      28, 2008, the Company completed the acquisition of all the outstanding equity
      securities of Elemental Business, Inc. (“EBI”) pursuant to a Share Exchange
      agreement among the Company and EBI and EBI shareholders. As a result of this
      transaction, EBI became a wholly owned subsidiary of the Company. The total
      purchase price for the acquisition was $592,000, the fair value of the stock
      issued for the acquisition, and included the repayment of EBI’s existing bank
      credit facility at closing. The results of the operations of EBI from the date
      of acquisition are included in the consolidated financial
      statements.





EBI
      is in
      the business of online marketing optimization utilizing its proprietary
      technology. The technology was actually built on the concepts around the
      Persuasion Architecture® methodology.





Purchase
      Price Allocation: EBI’s results of operations are included in the Company’s
      statement of operation from the acquisition date. In accordance with SFAS 141,
      the total purchase price was allocated to EBI’s net tangible and intangible
      assets and liabilities based upon their fair value as of May 28, 2008. The
      Company employed the services of an independent valuation specialist to assist
      in the valuation and allocation of goodwill resulting from the acquisition.
      The
      following represents the allocation of the purchase price to the acquired net
      assets of EBI and the associated estimated useful lives:





Amount
            
            Estimated Useful LifeNet
                Working Capital
            
            $
            (3,717
            )
            
            -Trade
                Name
            
            
            40,000
            
            
            3
                yearsProprietary
                Technology
            
            
            300,000
            
            
            3
                yearsCustomer
                Relationships
            
            
            70,000
            
            
            3
                yearsGoodwill
                & Going Concern Value
            
            
            185,717
            
            
            Indefinite**Total**
            
            **$**
            **592,000**





F-10




The
      following is unaudited pro forma information for the year ended June 30, 2008
      and 2007, as if the acquisition of EBI were consummated on July 1, 2006. The
      pro
      forma information is not necessarily indicative of the combined financial
      position or results of operations, which would have been realized had the
      acquisition been consummated during the period for which the pro forma financial
      information is presented.




2008
            
            2007Revenue
            
            $
            2,215,683
            
            $
            2,274,078Net
                (loss)
            
            $
            (1,957,613
            )
            $
            (12,168
            )Earnings
                per share – basic & diluted
            
            $
            (0.03
            )
            $
            0.00





**Note
      4. Notes Receivable**




In
      connection with one of the RSP/ESP Agreements, on February 25 th ,
      2008,
      the Company entered into a Revolving Line of Credit Agreement (the “Revolver”)
      whereby the Company granted the client a revolving credit line of $70,000.
      As of
      the date the Revolver was signed, the Company had expended $41,245 in third
      party design, programmer and ecommerce campaign efforts and such amount was
      treated as drawn down from the Revolver. The Company advanced an additional
      $3,870 to the client under the Revolver before its expiration. All sums advanced
      pursuant to the Revolver shall bear interest from the date each advance is
      made
      until paid in full at the rate of ten percent (10%) per annum, simple interest.
      The client shall pay accrued interest on the outstanding principal balance
      on a
      monthly basis commencing on April 15, 2008, and continuing on the fifteenth
      day
      of each month thereafter. The entire unpaid principal balance, together with
      any
      accrued interest and other unpaid charges or fees hereunder, shall be due and
      payable on the maturity date of May 1, 2009 (“Maturity Date”). As of the date of
      this report the note has not been paid and is accruing interest at the amount
      note in the Revolver agreement. The Company has reflected the amount of the
      Revolver as a note receivable in the current asset section of the Balance Sheet.
      For the year ended June 30, 2008, the Company recorded interest income of $345
      related to the Revolver.




The
      Company has the option at any time to convert all or a portion of the
      outstanding principal and interest on the underlying promissory note (“Note”)
      related to the Revolver into a number of shares of common stock, $0.001 par
      value per share (the “ Common
      Stock ”)
      equal
      to a fraction, the numerator of which shall be the amount of principal and
      interest being so converted and the denominator of which shall be equal to
      the
      Conversion Price (the “ Conversion
      Shares ”).
      The
“ Conversion
      Price ”
shall
      be $0.05. **** If
      at any
      time prior to the Maturity Date and/or full repayment of the Note, the Market
      Price of the Client’s Common Stock remains less than 75% of the Conversion Price
      for a ten (10) consecutive trading days (“Average Trading Price”) then the
      Conversion Price will be automatically adjusted down to the then calculated
      Average Trading Price. The adjustment feature will continue to adjust down
      should the Market Price continue to decline prior to repayment or conversion.





As
      part
      of the Revolver the Company also received 250,000 Common Stock purchase
      warrants. The warrants are exercisable at $0.25 for a period of five years
      from
      issuance. As of June 30, 2008 all the warrants remain outstanding. The
      warrants have a cashless exercise provision and are not redeemable by the
      client. The warrants also have standard anti-dilution provisions as it related
      to amount and price.





On
      April
      15, 2008, the Company also entered into a promissory note arrangement with
      an
      employee for $8,000. The note carries an interest rate of 5% and is repayable
      on
      a monthly basis at $240.





**Note
      5. Marketable Securities**





We
      classify our investments as “available-for-sale” in accordance with the
      provisions of Statement of Financial Accounting Standards No. 115. “Accounting
      for Certain Investments in Debt and Equity Securities” (SFAS 115). We do not
      have any investments classified as “trading”. Investments that we intend to hold
      for more than one year are classified as long-term investments.





Available-for-sale
      securities are carried at fair value with the unrealized gain or loss, net
      of
      tax, reported in other comprehensive income. Unrealized losses considered to
      be
“other-than-temporary” are recognized currently in earnings. The cost of
      securities sold is based on the specific identifications method. The fair value
      of most investment securities is determined by currently available market
      prices. Where quoted market prices are not available, we use the market price
      of
      similar types of securities that are traded in the market to estimate fair
      value.





At
      June
      30, 2008, we maintained a portfolio consisting of common stock of one publicly
      traded entity.





**Note
      6. Investment in Unconsolidated Subsidiary**




***Alkemi
      International Pty Ltd Investment & Limited Term Licensing
      Agreement***




On
      June
      13, 2007, the Company entered into a licensing agreement, a stockholders
      agreement and a call option deed (all collectively, the “AIPL Agreements”) with
      Alkemi International Pty Ltd (“AIPL”). Under the AIPL Agreements, AIPL received
      a limited term exclusive licensing agreement (17 months) to resell and deliver
      the intellectual property of the Company in the Australian and New Zealand
      Territories and the Company would have a right to covert any monies owed per
      the
      Agreements from AIPL to ownership position in AIPL. On July 23, 2007, the
      Company delivered to AIPL notice to issue shares that totaled the outstanding
      balance due from AIPL as of June 13, 2007 to equity in AIPL (then amount was
      $82,000). An independent valuation company issued an opinion whereby the value
      of AIPL was set at $959,300 AUD (exchange rate 1.18619 or US$808,724) and as
      such the Company received an amount equal to $97,268 AUD$ or 159,897 shares
      of
      AIPL. The Company will continue to accrue monies owed from AIPL until a total
      of
      US$62,629 is due from AIPL. At such a time the amount will automatically be
      converted into additional shares of AIPL and the total ownership percentage
      at
      that time of AIPL by the Company will equal 15% of AIPL. Payments to the Company
      will then commence based upon the licensing agreement. The original agreement
      with AIPL began in 2004. This investment is being accounted for under the cost
      method.


F-11


For
      the
      year ended June 30, 2008, the Company was owed $28,624 under the AIPL Agreements
      for licensing fees. The Company has recorded such amount as an accounts
      receivable until such a time as it might convert or collect.




**Note
      7. Convertible Debentures and Warrants**




**Bridge
      Convertible Notes**




Between
      the period from March 1, 2005 through August 15, 2007, pursuant to an investment
      subscription agreement and closing documents, Future Now Inc. sold $675,000
      in
      face value of 10.5% convertible promissory notes, convertible into shares of
      Future Now Inc.’s common stock (the “Offering”). Each $50,000 in notes included
      the issuance of seven-year warrants to purchase 148,000 shares of Future Now
      Inc.’s common stock, or like security issued in a qualified financing or
      acquisition, at an exercise price of $0.08 per share. The notes are redeemable
      at the earlier of either (i) repayment from the sales escrow redemption feature
      (the “Redemption Feature”); (ii) three years from the date of issuance; (iii) a
      financing transaction of at least $2,500,000 (the “Qualified Financing”); or
      (iv) the closing of a material acquisition of Future Now Inc., whether by
      merger, recapitalization, sale of assets or other similar material transaction
      (an “Acquisition”). At the note holders’ option, all, or a portion of, the
      principal and accrued interest on the notes may be converted into shares of
      the
      Future Now Inc.’s common stock along with a Qualified Financing or Acquisition.
      The number of shares into which the notes are convertible will equal the
      quotient of the converted principal and interest divided by the lower of (i)
      the
      price per share issued in a Qualified Financing or Acquisition, at a 20%
      discount, or (ii) $0.35. If the holder elects the conversion option, the minimum
      number of shares of common stock each warrant will convert into is 142,311.
      As
      additional protection against repayment of the notes, under the Redemption
      Feature, the Company will escrow three and one-half (3.5%) percent of its gross
      revenues in a separate bank account and pay down the notes, on a semi-annual
      basis, until such time as the total principal has been repaid (“Redemption
      Escrow”). Unless the notes are fully paid off, the first payment under the
      Redemption Feature will be due within thirty (“30”) days of the first
      anniversary of the notes, and then on a semi-annual basis thereafter. The notes
      were issued with warrants having expiration dates seven-years from issuance.
      The
      investors were granted an aggregate of 1,998,000 warrants to purchase shares
      of
      the Future Now Inc.’s common stock at an exercise price of $0.08 per share.
      Prior to the share exchange, $200,000 of the face amount of the notes and
      1,110,000 warrants were converted into Future Now Inc.’s common
      stock.





As
      part
      of the share exchange, the unconverted notes and warrants were assumed by the
      Company. For amendments to the registration rights and conversion price of
      the
      notes and warrants, the note holders received new warrants, with the same terms,
      equal to 100% of their unconverted warrants. The only amendment to the note
      holders’ registration rights was to grant the Company’s new investors in the New
      Financing (described below), the first right of registration in front of the
      existing note holders.




As
      provide for with the Redemption Feature of the Notes, during the note holders
      received and aggregate payment of $75,891 related to the 3.5% gross sales
      amount. During April 2008, on note holder converted all $25,000 in principal
      plus accrued interest of $1,093 and received 93,189 shares of the Company’s
      common stock. For the period ended June 30, 2008, the Company owes approximately
      $18,000. As of June 30, 2008, the principal balance of the bridge convertible
      notes was $374,109, net of $80,139, of unamortized debt discount.




**Share
      Exchange Convertible Notes**




Immediately
      following the closing of the share exchange, the Company entered into two
      convertible note agreements, a securities purchase agreement, four warrant
      agreements, and a pledge and security agreement (collectively, the “Financing
      Agreements”), by and between the Company and two purchasers named therein. The
      Financing Agreements provide for the offering by the Company to the purchasers
      of $2,000,000 (the “New Financing”) in 11% secured convertible notes maturing on
      the second anniversary of the closing date of the New Financing. Interest on
      the
      notes was prepaid.




The
      notes
      will convert into shares of the Company’s common stock, at the option of the
      Company, at the conversion price. The conversion price is equal to the lowest
      of
      (a) the Fixed Conversion Price (as defined below), (b) the Lowest Fixed
      Conversion Price (as defined below), and (c) the Default Conversion Price (as
      defined below). The “Fixed Conversion Price” is $0.35 per share. The “Lowest
      Fixed Conversion Price” is the lowest of any new transaction price from any
      subsequent financing. The “Default Conversion Price,” applicable only after and
      during events of default, is the amount equal to 70% of the three lowest closing
      prices during the 20 days prior to a notice of conversion.




The
      Company will have the right to prepay all or part of the outstanding principal
      on the notes by giving the purchasers advance written notice of 10 trading
      days.
      The prepayment amount will be 115% of the prepaid principal during year one
      and
      125% of the prepaid principal during year two.




Beginning
      on the first trading day of the sixth full month after the closing of the New
      Financing and on the first day of each month thereafter, the notes will be
      repaid in an amount equal to 5% of the principal amount of the notes. Prior
      to
      the effective date of a registration statement covering the shares of common
      stock issued in connection with the New Financing, such amount shall be paid
      in
      cash at 120% of the principal amount due. After the effective date, the amount
      shall be paid either in cash at 115% of the principal amount due or at the
      option of the Company, in shares of common stock at the lesser of the Fixed
      Conversion Price or 80% of the average of the closing bid prices of the common
      stock for the five trading days prior to the monthly payment date. The Company’s
      right to make payment in shares of its common stock is subject to a 4.99%
      conversion cap. The purchasers, in their sole discretion, can defer any or
      all
      monthly payments to any subsequent month.


F-12


The
      purchaser received (a) warrants to purchase shares of the Company’s common
      stock, equal to 50% of the issue date conversion shares exercisable at $0.35,
      and (b) warrants to purchase 50% of the issue date conversion shares exercisable
      at $0.50. 2,380,943 and 2,389,943 warrants were issued at $0.35 and $0.50,
      respectively. The warrant prices are subject to adjustment if there is a
      subsequent financing with a lower price. The expiration date will be the last
      day of the month in which the fifth anniversary of the effective date of a
      registration statement occurs. Warrant shares are to be included in the
      registration statement. Additionally, there is a cashless exercise right if
      the
      effective date has not occurred by the first anniversary of issuance or if
      the
      registration statement is no longer effective during any time when the warrants
      are still outstanding.




Additionally,
      the Company must file a registration statement to cover the purchasers’ interest
      shares of common stock, warrants and 200% of the number of shares of common
      stock equal to all of the shares issued or issuable on conversion of the notes
      and compensation stock no later than 60 days from the closing date of the New
      Financing and shall have a registration statement declared effective no later
      than 120 days from the closing date. Upon default of the above the Company
      shall
      pay, as penalties, to the purchasers 2% per month, in cash, of the principal
      amount of the notes for each 30-day period until the registration statement
      is
      filed or declared effective, as the case may be. The Company’s registration
      statement filed under Form S1 became effective on April 29, 2008. The Company
      incurred penalties for not have the registration statement deemed effective
      of
      $80,000. The penalty amount has been included in other expenses on the Statement
      of Operations.




The
      purchasers agreed not to convert its notes or exercise warrants, and the Company
      will not be permitted to issue shares as interest, upon a payment date or
      pursuant to a mandatory conversion, to the extent such conversion, exercise
      or
      issuance would result in the purchasers’ beneficial ownership of more than 4.99%
      of the outstanding shares of common stock of the Company at that time. The
      Company will be authorized to rely on the purchasers’ representations as to the
      net amount of such purchasers’ holdings at the time of conversion or exercise.
      This limit will not apply under certain circumstances.




The
      first
      principal payment under the notes became due on April 30, 2008. The Company
      paid
      that amount and the May 30, 2008 payment in cash for a total of $240,000 which
      represented $200,000 in principal pay down and $55,000 in a risk premium
      expense. For the payment due as of June 30, 2008, the Company elected to pay
      the
      amount in common stock. As provided for the note documents the note holders
      elected to defer that stock issuance. For the year ended June 30, 2008 the
      Company made As of June 30, 2008, the principal balance of the share exchange
      convertible notes was $1,800,000, net of $531,652 of unamortized
      discount.





**Note
      8. Stockholders’ Equity**




***Common
      Stock***




The
      Company is authorized to issue up to 900,000,000 shares of common stock and
      5,000,000 shares of preferred stock both with par value of $0.001. The Company
      had 75,463,952 and 44,400,000 shares of common stock issued and outstanding
      as
      of June 30, 2008 and 2007, respectively.




Prior
      to
      the closing of the share exchange, the Company’s Chief Financial Officer (“CFO”)
      and Chief Operating Officer (“COO”) exercised stock options of 1,850,000 and
      513,893, respectively. The Company received proceeds from the CFO and COO of
      $90,000 and $25,000, respectively, from the exercise. In connection with the
      option exercises, on October 22, 2007, the CFO and COO executed non-interest
      bearing promissory notes in the amount of $70,000 and $25,000, respectively.
      If
      not sooner paid, all outstanding principal shall be paid to the Company on
      the
      earlier of (a) date of termination from employment of the CFO and/or COO, or (b)
      two years from the date of the notes. The notes may be prepaid, in whole, or
      from time to time, in part, at anytime, without premium or penalty. The notes
      are secured by the CFO and COO’s total outstanding stock options. No sale,
      transfer or assignment of said stock options can be made without the express
      written consent of the Company’s CEO. The notes have been reflected as a
      deduction from equity in the June 30, 2008 Balance Sheet.





On
      May 1,
      2008, the Board of Directors (“Board) of the Company, resolved that as incentive
      for the closing of the EBI acquisition, that $35,000 of the CFO’s note would be
      forgiven. The CFO at anytime prior to the note’s maturity may elect to receive
      the forgiveness and to offset the tax consequences of such, the Company will
      pay
      the CFO $12,250 representing a 35% tax bracket. As of June 30, 2008, the CFO
      has
      not elected to have the note forgiven. Through Board minutes of August 6, 2008,
      in consideration for the CFO executing certain personal guarantees on a
      receivables factor credit facility the Company forgave the remaining portion
      of
      the note. Through Board minutes of August 6, 2008, assuming that the COO is
      still employed with the Company on March 31, 2009, his note will also be
      forgiven.




**Note
      9. Stock Based Compensation**




On
      July
      18, 2007, through written consent in lieu of a special meeting of the
      stockholders and the Board of Directors (the “Board”) of FNI., the 2007 stock
      incentive plan was adopted (the “Plan”). As part of the share exchange the Plan
      was assumed by the Company. The Plan provides a maximum number of shares of
      the
      Company’s common stock that may be issued there under, which amount shall be
      equal to no more than 25% of the outstanding common stock of the Company,
      determined on the first trading day of each fiscal year. On July 18, 2007,
      the
      Board granted 5,337,250 options under the Plan to key employees and affiliated
      personnel (both, the “Grantees”). The options granted had an exercise price of
      $0.05 and were immediately vested. On September 15, 2007, the Board granted
      an
      additional 2,208,438 options to Grantees. The options had an exercise price
      of
      $0.06 and were immediately vested. Through written agreements, the Grantees
      further agreed in writing that the exercise price would reset to the price
      of
      the stock on the day the share exchange was completed. As consideration for
      this
      amendment and as a result of the recapitalization of the Company due to the
      reverse acquisition, the Company granted the Grantees additional options that
      represented 25% of the Grantees’ original option grants with the same terms and
      conditions upon the closing of the share exchange. The Company issued a total
      of
      1,295,451 additional options. The Company considered the new options as part
      of
      the reverse acquisition and recorded no additional compensation.


F-13


On
      October 31, 2007, the Board granted the newly hired Vice President of Marketing
      462,500 stock options with an exercise price of $0.35 and which vest over four
      years in 25% installments. On February 1, 2008 the Board granted 212,000 stock
      options to 19 employees with and exercise price of $0.50 and which vest over
      four years in 25% installments. The Board also granted 60,000 stock options
      to
      three advisors with an exercise price of $0.50 and which vest over one year.
       On May 25, 2008 the Board granted 687,500 stock options with 4 year
      vesting and on May 29, 2008 granted an additional 350,000 options all
      exercisable at $0.16.





Compensation
      expense is amortized on a straight line basis over the requisite service period
      for the entire award, which is generally the maximum vesting period of the
      award, and if necessary, is adjusted to ensure that the amount recognized is
      at
      least equal to the vested (earned) compensation. For the year ended June 30,
      2008, the Company recorded total stock based compensation expense of $361,865.
      Related to the issuance of options. As of June 30, 2008 the total unrecognized
      compensation cost related to unvested stock options was $330,176 which is
      expected to be recognized over a weighted average period of 3.4
      years.




The
      Company uses the Black-Scholes option-pricing model to estimate the fair value
      of its stock option awards and warrant issuances. The calculation of the fair
      value of the awards using the Black-Scholes option-pricing model is affected
      by
      the Company’s stock price on the date of grant as well as assumptions regarding
      the following:




·
            Estimated
                volatility is a measure of the amount by which the Company’s stock price
                is expected to fluctuate each year during the expected life of the
                award.
                The Company’s estimated volatility is an average of the historical
                volatility of peer entities whose stock prices were publicly available.
                The Company’s calculation of estimated volatility is based on historical
                stock prices of these peer entities over a period equal to the expected
                life of the awards. The Company uses the historical volatility of
                peer
                entities due to the lack of sufficient historical data of its stock
                price;




·
            The
                expected term represents the period of time that awards granted are
                expected to be outstanding and is currently the average of the contractual
                term and the vesting period. With the passage of time, actual behavioral
                patterns surrounding the expected term will replace the current
                methodology; and





·
            The
                risk-free interest rate is based on the yield curve of a zero-coupon
                U.S.
                Treasury bond on the date the stock option award is granted with
                a
                maturity equal to the expected term of the stock option award. An
                increase
                in the risk-free interest rate would result in an increase to the
                Company’s stock-based compensation
                expense.




**Current
      stock option and warrant pricing assumptions:**




**For the Years Ended**
              **June 30,****2008**
            
            **2007**Market
                prices (*)
            
            
            $.05
                - $.50
            
            
            -Exercise
                prices (*)
            
            
            $.05
                - $.50
            
            
            -Expected
                lives
            
            
            5
            
            
            -Expected
                volatility
            
            
            115%
            
            
            -Expected
                dividends
            
            
            -
            
            
            -Risk-free
                rate of return (weighted average)
            
            
            3.15
                – 4.91%
            
            
            —


(*)
      adjusted for the 9.25 exchange ratio on the share exchange.


F-14


***Options***





The
      following table sets forth all the Company’s common stock option activity and
      weighted average prices for the year ended June 30, 2008:




Shares (*)
            
            Weighted Avg
              Exercise Price (*)
            
            Weighted Avg
              Reamining
              Contractual Term**Stock Options**Outstanding
                at beginning of the year
            
            
            -
            
            $
            -
            
            
            -Granted
            
            
            10,613,136
            
            $
            0.35
            
            
            4.75Exercised
                (**)
            
            
            (2,363,893
            )
            $
            0.05
            
            
            -Forfeited
            
            
            (2,000
            )
            $
            0.50
            
            
            -Outstanding
                at the end of the period
            
            
            8,247,243
            
            $
            0.33
            
            
            4.75Options
                exercisable at the end of the period
            
            
            6,545,816Shares
                available for future grant
            
            
            8,252,852





*
      Reflected at of the 9.25 share exchange ratio whereby one share of FNI converted
      in 9.25 shares of the Company.


**
      Exercised prior to the share exchange of October 30, 2007.




***Warrants***





The
      following table sets forth all the Company’s common stock warrant activity
      as of June 30, 2008:





**Warrants**
              **Outstanding**
            
            **Weighted**
              **Average**
              **Exercise Prices**
              **(*)**
            
            **Weighted Average**
              **Remaining**
              **Contractual Term**
              **(years)**Outstanding
                at the beginning of the year
            
            
            1,850,000
            
            $
            0.35
            
            
            7.0Issued
                or obligated to be issued
            
            
            8,046,490
            
            
            0.40
            
            
            5.0Exercised
                (**)
            
            
            (1,110,000
            )
            
            0.08
            
            
            -Expired
            
            
            -
            
            
            0.00
            
            
            -Outstanding
                at the end of the period
            
            
            8,767,490
            
            $
            0.41
            
            
            5.6Vested
                and expected to vest at the end of the period
            
            
            8,767,490
            
            $
            0.41
            
            
            5.6Exercisable
                at the end of the period
            
            
            8,767,490
            
            $
            0.41
            
            
            5.6





*
      Reflected at of the 9.25 share exchange ratio whereby one share of FNI converted
      in 9.25 shares of the Company.


**
      Exercised prior to the share exchange of October 30, 2007.





Stock-based
      compensation expense for the warrants for the year ended June 30, 2008 was
      $22,007.




**Note
      10. Income Taxes**





Income
      (loss) before income taxes consisted of the following:





Twelve Months Ended June 30,2008
            
            2007Income
                (loss) before income taxes
            
            $
            (2,923,808
            )
            $
            210,514





The
      components of the provision (benefit) for income taxes are as
      follows:





Twelve Months Ended June 30,2008
            
            2006**Current**Federal
            
            
            -
            
            
            63,154State
            
            
            1,100
            
            
            10,526Local
                and franchise
            
            
            250
            
            
            256Total
                current tax provision
            
            
            1,350
            
            
            73,936**Deferred**Federal
            
            
            (874,806
            )
            
            40,128State
            
            
            (145,679
            )
            
            5,361Local
                and franchise
            
            
            -
            
            
            -Total
                deferred tax benefit
            
            
            (1,020,485
            )
            
            45,489Total
                tax provision (benefit)
            
            $
            (1,019,135
            )
            $
            119,425




F-15





Twelve Months Ended June 30,Temporary differences:
            
            
            2008
            
            
            2007Deferred
                Tax Assets:Net
                operating loss carry-forward
            
            
            866,310
            
            
            -Allowance
                for doubtful accounts
            
            
            36,576
            
            
            17,501Stock
                based Compensation
            
            
            129,220
            
            
            -Accrued
                interest
            
            
            5,879
            
            
            -Less:
                valuation allowance
            
            
            -
            
            
            -Deferred
                tax assets
            
            
            1,037,985
            
            
            17,501Deferred
                tax liabilities
            
            
            -
            
            
            -Net
                deferred tax asset
            
            $
            1,037,985
            
            $
            17,501





The
      Company had federal and state net operating tax loss carry forwards of
      approximately $2,923,808 as of June 30, 2008. The tax loss carry forwards are
      available to offset future taxable income with the federal and state carry
      forwards beginning to expire in 2022.




In
      2008,
      net deferred tax assets increased by $1,020,484 primarily due to additional
      loss
      carry-forwards in 2008. The realization of the tax benefits is subject to the
      sufficiency of taxable income in future years. The combined deferred tax assets
      represent the amounts expected to be realized before expiration.




The
      Company periodically assesses the likelihood that it will be able to recover
      its
      deferred tax assets. The Company considers all available evidence, both positive
      and negative, including historical levels of income, expectations and risks
      associated with estimates of future taxable income and ongoing prudent and
      feasible profits. As a result of this analysis of all available evidence, both
      positive and negative, the Company concluded that it is more likely than not
      that its net deferred tax assets will ultimately be recovered and, accordingly,
      no valuation allowance was recorded as of June 30, 2008.




The
      difference between the expected income tax expense (benefit) and the actual
      tax
      expense (benefit) computed by using the Federal statutory rate of 35% is as
      follows:




Twelve Months Ended June 30,2008
            
            2007Expected
                income tax benefit(loss) at statutory rate of 35%
            
            $
            (1,023,333
            )
            $
            73,680State
                and local tax benefit, net of federal
            
            
            6,038
            
            
            (35,996
            )Change
                in valuation account
            
            
            -
            
            
            -Other:Meals
                & Entertainment
            
            
            10,236
            
            
            9,749Income
                tax expense (benefit)
            
            $
            (1,019,135
            )
            $
            119,425




**Note
      11. Commitments and Contingencies**




The
      Company leases office space of approximately 3,700 sq ft. in Brooklyn, NY.
      and
      500 sqft. in Fairfield CT. The lease in Brooklyn was entered into on September
      1, 2007 and is for a period of three years. The lease in Fairfield was entered
      into on January 1, 2008 and is for two years. It also has a corporate apartment
      in Brooklyn, NY. The apartment lease was entered into on October 1, 2007 and
      is
      for one year. Rent expense under these arrangements totaled $100,483 and $70,930
      for the years ended June 30, 2008 and 2007, respectively. The Company also
      has
      certain leases on office equipment and computers. The lease expense recorded
      for
      these totaled $6,500 and $4,100 for the year ended June 30, 2008 and 2007,
      respectively. Projected expenses related to the above lease arrangements for
      the
      next five years is as follows:





For
                the year ended
            
            TotalJune
                30, 2009
            
            $
            110,714June
                30, 2010
            
            
            101,910June
                30, 2011
            
            
            37,333


F-16


**Note
      12. Subsequent Events**


On
        July
        30, 2008 as part of a consulting and investor relations services agreement
        the
        Company issued 2,500,000 restricted shares of common stock. The term of the
        agreement is for a period of two years. The value that is attributed to the
        issuance was $525,000. Such amount will be amortized into the statement of
        operations on straight-line basis over the term of the
        contract.





On
      August
      6, 2008, in consideration of certain salary deferrals by executive management,
      the Company issued 1,250,000 stock options to five individuals. The options
      vested 50% immediately and the other 50% after six months. The stock options
      are
      exercisable at $0.26 for a period of five years. The total value of the options
      at issuance was $267,034.





On
      August
      6, 2008, in consideration of certain personal guarantees by the Chief Financial
      Officer of the Company on an accounts receivable factoring line of credit,
      the
      Company issued 1,250,000 stock options to the Chief Financial Officer and
      forgave one-half of the promissory note issued to the Chief Financial Officer
      related to certain stock option exercises before the Share Exchange. The options
      vested immediately, had an exercise price of $0.26, could be exercised over
      a
      five-year period and carried a right to exercise for a three-year period
      following the resignation or termination of the Chief Financial Officer from
      the
      Company. The total value of the options at issuance was $267,034.





On
      August
      25, 2008, Future Now Group, Inc. (the “Company”) entered into a securities
      purchase agreement (the “Purchase Agreement”) with one investor pursuant to
      which the Company sold 555,556 shares of common stock, $0.001 par value (the
      “Common Stock”), and warrants to purchase 277,728 shares of common stock (the
“Warrants,” and together with the Common Stock, the “Securities”) to the Buyer
      for total proceeds of $100,000. The Warrants have an exercise price of $0.35
      per
      share (the “Exercise Price”). The Warrants may be exercised at any time on or
      after the issuance date for a period of five (5) years. The Exercise Price
      may
      be adjusted upon stock dividends, stock splits, subsequent equity sales by
      the
      Company, pro rata distributions among the Company’s existing shareholders, the
      Company’s undertaking a fundamental transaction, or voluntarily at the
      discretion of the Company’s Board of Directors.





On
      August
      31, 2008 the Company issued a total of 44,444 shares of restricted common stock
      to two non-management directors. Each director received 22,222 shares as payment
      of their quarterly board retainer fee. The value of the offering was $12,000
      in
      total.





On
      September 3, 2008, the Company nominated four new members to the Company’s
      advisory board. Those advisors received 25,000 stock options that vest after
      one
      year and are exercisable at $0.35 per share for a five-year period. The total
      value of the options at issuance was $28,757.


F-17







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




No
      events
      occurred that require disclosure under Item 304(b) of Regulation
      S-B.


**ITEM
        8A(T)    C**ONTROLS
        AND PROCEDURES.****





**Evaluation
      of Disclosure Controls and Procedures**




In
      connection with the preparation of our Annual Report on Form 10-KSB, an
      evaluation was carried out by management, with the participation of our Chief
      Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the
      effectiveness of our disclosure controls and procedures (as defined in Rules
      13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (Exchange
      Act)
      as of June 30, 2008. Disclosure controls and procedures are designed to ensure
      that information required to be disclosed in reports filed or submitted under
      the Exchange Act is recorded, processed, summarized and reported within the
      time
      periods specified, and that such information is accumulated and communicated
      to
      management, including the Chief Executive Officer and Chief Financial Officer,
      to allow timely decisions regarding required disclosure.




During
      evaluation of disclosure controls and procedures as of June 30, 2008 conducted
      as part of our annual audit and preparation of our annual financial statements,
      management conducted an evaluation, with the participation of our CEO and CFO,
      of the effectiveness of the design and operations of our disclosure controls
      and
      procedures and concluded that our disclosure controls and procedures were not
      effective. The CFO and CEO determined that at June 30, 2008, we had a material
      weakness that relates to the relatively small number of employees who have
      bookkeeping and accounting functions and therefore prevents us from
      segregating duties within our internal control system. Because of material
      weakness, we reallocated certain operating personnel to handle certain tasks
      as
      well as developed written policies to better segregate duties. We also intend
      to
      hire an Assistant Controller or Controller.





**Management’s
      Report on Internal Control over Financial Reporting**




Management
      is responsible for the preparation and fair presentation of the financial
      statements included in this annual report. The financial statements have been
      prepared in conformity with accounting principles generally accepted in the
      United States of America and reflect management’s judgment and estimates
      concerning effects of events and transactions that are accounted for or
      disclosed.




Management
      is also responsible for establishing and maintaining adequate internal control
      over financial reporting. Our internal control over financial reporting includes
      those policies and procedures that pertain to our ability to record, process,
      summarize and report reliable data. Management recognizes that there are
      inherent limitations in the effectiveness of any internal control over financial
      reporting, including the possibility of human error and the circumvention or
      overriding of internal control. Accordingly, even effective internal control
      over financial reporting can provide only reasonable assurance with respect
      to
      financial statement presentation. Further, because of changes in conditions,
      the
      effectiveness of internal control over financial reporting may vary over
      time.




In
      order
      to ensure that our internal control over financial reporting is effective,
      management regularly assesses controls and did so most recently for its
      financial reporting as of June 30, 2008. This assessment was based on criteria
      for effective internal control over financial reporting described in the
      Internal Control Integrated Framework issued by the Committee of Sponsoring
      Organizations (COSO) of the Treadway Commission. Based on this assessment,
      management has concluded that, as of June 30, 2008, we had a material weakness
      that relates to the relatively small number of employees who have bookkeeping
      and accounting functions and therefore prevents us from segregating duties
      within our internal control system. The inadequate segregation of duties is
      a
      weakness because it could lead to the untimely identification and resolution
      of
      accounting and disclosure matters or could lead to a failure to perform timely
      and effective reviews.




**Remediation
      of Material Weakness in Internal Controls Over Financial
      Reporting**




Because
      of the material weakness desribed above, we reallocated certain operating
      personnel to handle certain operating tasks and established written procedures
      to better segregate duties. We also intend to hire an Assistant Controller
      or
      Controller.




We
      believe that the consolidated financial statements fairly present, in all
      material respects, our consolidated balance sheet as of June 30, 2008 and the
      related consolidated statement of operations, shareholder equity and cash flow
      for the years ended June 30, 2008, and 2007, in conformity with GAAP,
      notwithstanding the material weakness we identified.




This
      annual report filed on Form 10K-SB does not include an attestation report of
      the
      Company’s registered public accounting firm regarding internal control over
      financial reporting. Management’s report was not subject to attestation by our
      registered public accounting firm pursuant to temporary rules of the Securities
      and Exchange Commission that permit us to provide only management’s report in
      this annual report.


**ITEM
                8B.**
              ****OTHER
                  INFORMATION.****




None.


15





**PART
      III**





**ITEM
                9.**
            **DIRECTORS,
                EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE;
                COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
                ACT.**





Our
      executive officers and directors and their respective ages and positions as
      of
      the date of this prospectus are listed below.





**Name**
            
            **Age**
            
            **Position
                Held with our Company**Jeffrey
                Eisenberg
            
            43
            
            Director,
                Chief Executive Officer and PresidentWilliam
                Schloth
            
            45
            
            Director
                and Chief Financial OfficerHoward
                Kaplan
            
            31
            
            Chief
                Operating OfficerBryan
                Eisenberg
            
            38
            
            Director
                and Executive Vice President of Intellectual PropertyJohn
                Quarto-Von Tivadar
            
            44
            
            Chief
                ScientistAlan
                Hall
            
            63
            
            DirectorRoy
                Williams
            
            50
            
            Director





***Jeffrey
      Eisenberg*** has
      served as our director, Chief Executive Officer and President since October
      30,
      2007. Mr. Eisenberg co-founded Future Now, Inc. in 1998 and served as its Chief
      Executive Officer and as director until the Share Exchange on October 30, 2007.
      He also serves as the Chief Executive Officer of Persuasion Architecture, Inc.,
      a licensing and training company. Mr. Eisenberg has expertise in online
      marketing and marketing performance metrics. He is the co-author of the New
      York
      Times bestseller “Call-to-Action and Persuasive Online Copywriting,” and a
      co-author of the Wall Street Journal No. 1 bestseller “Waiting for Your Cat to
      Bark?” Mr. Eisenberg attended Touro College.




***William
      E. Schloth*** has
      served as our director and Chief Financial Officer since October 30, 2007.
      Mr.
      Schloth co-founded Future Now, Inc. in 1998 and served as its Chief Executive
      Officer until the Share Exchange on October 30, 2007. For more than the past
      two
      years, he has also served as a Senior Managing Director of Finance for Future
      Now Capital Markets Group, an affiliate of Future Now, Inc. that provides
      investment banking and financial services consulting. Mr. Schloth also has
      held
      senior management positions with GE Capital, including serving as Technical
      Advisor for Mergers and Acquisitions and Manager of Financial Planning and
      Analysis. Prior to GE Capital, Mr. Schloth spent five years with Coopers &
Lybrand. Mr. Schloth also has experience as an entrepreneur, successfully
      co-founding and selling his own full-service brokerage firm, as well as founding
      a specialty high-end financial and technology management consulting practice.
      Mr. Schloth is a certified public accountant and holds an MBA from New York
      University’s Stern School of Business with a double concentration in finance and
      marketing.




***Bryan
      Eisenberg*** has
      served as our director and Executive Vice President of Intellectual Property
      since October 30, 2007. Mr. Eisenberg co-founded Future Now, Inc. in 1998 and
      served as its Executive Vice President and as a director until the Share
      Exchange on October 30, 2007. He has expertise in online marketing and marketing
      performance metrics. He is also chairman of the Web Analytics Association and
      an
      advisory board member of AdTech. Mr. Eisenberg is an inventor of Persuasion
      Architecture®. Mr. Eisenberg also has consulted and run seminars for companies
      such as: Universal Orlando, GE, PriceWaterhouseCoopers, HP, CBS, AeroTek/Allegis
      Group, Dell, Volvo, Computer Associates, Overstock.com, LowerMyBills.com,
      CafePress.com and SAS. He is the co-author of the New York Times bestseller
      “Call-to-Action and Persuasive Online Copywriting,” and a co-author of the Wall
      Street Journal No. 1 bestseller “Waiting for Your Cat to Bark?” He is the
      publisher of Future Now’s award-winning blog and newsletter GrokDotCom and is
      the author of ClickZ’s column “ROI Marketing.” Mr. Eisenberg graduated from
      Brooklyn College.





***John
      Quarto-von Tivadar*** has
      served as our Chief Scientist since October 30, 2007. From 2004 to October
      30,
      2007, Mr. Quarto-von Tivadar served as Chief Scientist for Future Now, Inc.
      He
      is a co-inventor of Persuasion Architecture® and is a regular speaker at
      seminars and conferences in North America and Europe, having written multiple
      books on various technology topics, such as “Discovering Fusebox.” From 1999 to
      2000, Mr. Tivadar was Chief Technology Officer of an Internet incubator in
      New
      York with more than 40 web-based businesses, pioneering the development of
      the
      highly acclaimed “Category Manager,” “iTract” and “e-Marketplaces” web
      applications. From 1997 to 1999, Mr. Tivadar served as a Senior Engineer for
      Internet Technologies for Boston-based engineering software firm The Invention
      Machine. From 1988 to 1993, Mr. Tivadar ran an institutional trading desk on
      the
      floor of an exchange and managed a private hedge fund valued in excess of $5
      million for five years while a member of the Chicago Board of Trade. Mr. Tivadar
      also worked on instrument calibration and software testing for NASA’s Hubble
      Space Telescope’s high-speed photometer and high-resolution spectrograph from
      1987 to 1988. His newest book, “Persuasion Architecture: In Theory and In
      Practice” is expected to be out in the middle of 2008. He holds a Masters degree
      in Astrophysics from Boston University and a Bachelors of Science degree in
      Astronomy from the University of Illinois.




***Howard
      Kaplan*** has
      served as our Chief Operations Officer since October 30, 2007. From 2004 to
      October 30, 2007, Mr. Kaplan served as the Director of Business Development
      and
      from 2006 to October 30, 2007 as Chief Operating Officer of Future Now, Inc.
      He
      has spoken about marketing optimization at leading conferences including
      Internet Retailer, Shop.org, AdTech, Marketing Sherpa and Search Engine
      Strategies. Mr. Kaplan has been involved with internet technologies since the
      early 1990s. He has designed search engines and engineered content management
      systems for PriceWaterhouseCoopers’ Global Web Team. Mr. Kaplan is a member of
      the Association for Computing Machinery and a graduate of the Georgia Institute
      of Technology.




16




***Alan
      Hall*** was
      nominated to the board of directors on May 28, 2008. In 1988, Mr. Hall founded
      MarketStar Corporation, an outsourced global marketing and sales organization
      which helps thirty of the world’s largest high technology companies generate
      billions of dollars in revenues from the small to medium business space.
 Mr. Hall successfully grew the corporation to several thousand employees
      with operational capabilities in one hundred countries.  In 1999, the
      Omnicom Group purchased MarketStar and Mr. Hall served as CEO until
      2005.  From 2005 to the present, Mr. Hall served as Chairman for
      MarketStar. In 2004, Mr. Hall founded and is presently involved with Grow Utah
      Ventures, a non-profit organization which fosters entrepreneurial development.
       He also is the general partner of Mercato Partners, a multimillion dollar
      venture capital firm that focuses on investing in the marketing and sales growth
      of US high technology companies.  Mr. Hall graduated from Weber State
      University with a BA in 1969 and holds an MBA from Brigham Young
      University.





***Roy
      Williams*** was
      nominated to the board of directors on May 28, 2008. For more than the past
      five
      years, Mr. Williams is the CEO and founder of the Wizard Academy. Mr. Williams
      has over 25 years of advertising experience. Mr. Williams’ business book
      entitled, the “Wizard of Ads,” became a best seller. He followed that up with
      two additional best-selling books. Mr. Williams is an accomplished public
      speaker and has consulted with many Fortune 500 companies.





**Family
      Relationships**




Jeffrey
      Eisenberg and Bryan Eisenberg are brothers. There are no other family
      relationships between any of our directors or executive officers.




**Term
      of Office**




Our
      directors are appointed for a one-year term to hold office until the next annual
      meeting of our stockholders or until removed from office in accordance with
      our
      bylaws. Our officers are appointed by our board of directors and hold office
      until removed by the board of directors.




**Committees
      of the Board**




Effective
      through board of director minutes of July 7, 2008, an Executive Committee was
      established to oversee the day-to-day operations of the Company and
      subsidiaries. No individual member of the Executive Committee itself may commit
      the Company or subsidiaries for activities or actions specifically assigned
      to
      the board of directors of the Company. The Executive Committee consists of
      five
      members. Other than that committee we do not have nominating, compensation
      or
      audit committees or committees performing similar functions, nor do we have
      a
      written nominating, compensation or audit committee charter. Our board of
      directors does not believe that it is necessary to have such committees because
      it believes that the functions of such committees can be adequately performed
      by
      our board of directors as a whole.


17


**ITEM
                10.**
              **E**XECUTIVE
                  COMPENSATION.****




The
      following table sets forth the aggregate cash compensation paid by the Company
      to its Chief Executive Officer and its named executive officers, as such term
      is
      defined in Item 402 of Regulation SB promulgated under the Securities Act,
      for
      services performed during the years ended June 30, 2008 and 2007:





**Name and**
              **Principal Position**
            
            **Year**
            
            **Salary**
              **($)**
            
            **Bonus**
              **($)**
            
            **Stock**
              **Awards**
              **($)**
            
            **Option**
              **Awards**
              **($)**
            
            **Non-**
              **Equity Incentive**
              **Plan**
              **Compensation**
              **($)**
            
            **Non-**
              **qualified**
              **Deferred**
              **Compensation**
              **Earnings**
              **($)**
            
            **All Other**
              **Compensation**
              **($)**
            
            **Total**
              **($)**Jeffrey
                Eisenberg
              Director,
                Chief Executive Officer and President
            
            
            2008
              2007
            
            
            157,520
              130,000
            
            
            0
              0
            
            
            0
              0
            
            
            21,364
              0
            
            
            0
              0
            
            
            0
              0
            
            
            0
              0
            
            
            178,884
              130,000Bryan
                Eisenberg
              Director
                and Executive Vice President of Intellectual Property
            
            
            2008
              2007
            
            
            157,520
              130,000
            
            
            0
              0
            
            
            0
              0
            
            
            21,364
              0
            
            
            0
              0
            
            
            0
                0
            
            
            0
              0
            
            
            178,884
              130,000William
                Schloth
              Chief
                Financial Officer and Director
            
            
            2008
              2007
            
            
            138,235
              120,000
            
            
            0
              0
            
            
            0
              0
            
            
            215,874
              0
            
            
            0
              0
            
            
            0
                0
            
            
            0
              0
            
            
            354,110
              120,000Howard
                Kaplan
              Chief
                Operating Officer
            
            
            2008
              2007
            
            
            119,423
              -
            
            
            0
              -
            
            
            
            
            
            118,864
              -
            
            
            0
              -
            
            
            0
              -
            
            
            0
              -
            
            
            238,287
              -John
                Quarto-vonTivadar
              Chief
                Scientist
            
            
            2008
              2007
            
            
            100,000
              -
            
            
            0
              -
            
            
            
            
            
            21,364
              -
            
            
            0
              -
            
            
            0
              -
            
            
            0
              -
            
            
            121,364
              -





For
      the
      fiscal year ended June 30, 2007, the compensation of Jeffrey Eisenberg, Bryan
      Eisenberg, and William Schloth reflects their compensation earned while employed
      by FNI, one of our operating subsidiaries.




**Employment
      Contracts and Termination of Employment Arrangements**




On
      October 30, 2007, we entered into an employment agreement with Jeffrey
      Eisenberg, pursuant to which Mr. Eisenberg agreed to serve as our Chief
      Executive Officer and President upon the closing of the share exchange. Mr.
      Eisenberg’s annual base salary is $150,000. Mr. Eisenberg is also entitled to
      conditional performance-based stock grants, based upon our achieving certain
      year-end performance objectives for revenue and profitability. The stock grants
      will be calculated as a percentage of our outstanding common equity, varying
      from 2.0% to 0.5%, and will be granted over a period of five years. The
      agreement has a three-year term, with automatic extensions of successive
      additional one-year terms. If we terminate the agreement with Mr. Eisenberg
      without cause, Mr. Eisenberg will be entitled to receive his annual base salary
      for three (3) months after termination of employment.




On
      October 30, 2007, we entered into an employment agreement with Bryan Eisenberg,
      pursuant to which Mr. Eisenberg agreed to serve as our Executive Vice President
      of Intellectual Property upon the closing of the share exchange. Mr. Eisenberg’s
      annual base salary is $150,000. Mr. Eisenberg is also entitled to conditional
      performance-based stock grants, based upon our achieving certain year-end
      performance objectives for revenue and profitability. The stock grants will
      be
      calculated as a percentage of our outstanding common equity, varying from 2.25%
      to 0.55%, and will be granted over a period of five years. The agreement has
      a
      three-year term, with automatic extensions of successive additional one-year
      terms. Mr. Eisenberg will be entitled to receive his annual base salary for
      three (3) months after termination of employment.




On
      October 30, 2007, we entered into an employment agreement with William E.
      Schloth, pursuant to which Mr. Schloth agreed to serve as our Chief Financial
      Officer upon the closing of the share exchange. Mr. Schloth’s annual base salary
      is $135,000. In addition, he received a $25,000 bonus for closing the share
      exchange. Mr. Schloth is also entitled to conditional performance-based stock
      grants, based upon our achieving certain year-end performance objectives for
      revenue and profitability. The stock grants will be calculated as a percentage
      of our outstanding common equity, varying from 2.0% to 0.5%, and will be granted
      over a period of five years. Mr. Schloth will be entitled to receive his annual
      base salary for three (3) months after termination of employment.




On
      October 30, 2007, we entered into an employment agreement with John Quarto-Von
      Tivadar, pursuant to which Mr. Quarto-Von Tivadar agreed to serve as our Chief
      Scientist upon the closing of the share exchange. Mr. Quarto-Von Tivadar’s
      annual base salary is $100,000. Mr. Quarto-Von Tivadar will be entitled to
      receive his annual base salary for three (3) months after termination of
      employment.




18




On
      October 30, 2007, we entered into an employment agreement with Howard Kaplan,
      pursuant to which Mr. Kaplan agreed to serve as our Chief Operating Officer
      upon
      the closing of the share exchange. Mr. Kaplan’s annual base salary is $120,000.
      Mr. Kaplan will be entitled to receive his annual base salary for three (3)
      months after termination of employment.





**Stock
      Option Plan**




Prior
      to
      the share exchange with Future Now, Inc., we did not have a stock option plan
      for our employees. As a condition of the closing of the share exchange, we
      agreed to adopt Future Now, Inc.’s 2007 Stock Option Plan under which 7,545,868
      stock options were issued to the grantees (the “Grantees”), 2,363,893 of which
      had been exercised (“Option Exercises”). As part of the Option Exercises we
      received promissory notes from William E. Schloth and Howard Kaplan totaling
      $95,000. The Grantees have all agreed to have the exercise price of their
      options adjust to the closing price of our common stock on the closing date
      of
      the share exchange (the “Price Amendment”). As consideration for the Price
      Amendment, the Grantees will receive additional options equal to 25% of the
      then-outstanding options. There were 80,361 pre-share exchange shares granted
      under this provision. As of June 30, 2008, a total of 8,247,243 stock options
      were issued and outstanding at a weighted average price of $0.35 per
      share.




**Stock
      Options/SAR Grants**




We
      did
      not grant any options or stock appreciation rights during our fiscal year ended
      June 30, 2007. During the fiscal year ended June 30, 2008 the following options
      were issued, exercised and/or expired:





Shares (*)
            
            Weighted Avg Exercise Price (*)**Stock
                Options**Outstanding
                at beginning of the year
            
            
            0
            
            $
            0.00Granted
            
            
            10,613,136
            
            $
            0.35Exercised
                (**)
            
            
            (2,363,893
            )
            $
            0.05Forfeited
            
            
            (2,000
            )
            $
            0.50Outstanding
                at the end of the period
            
            
            8,247,243
            
            $
            0.33Options
                exercisable at the end of the period
            
            
            6,545,816Shares
                available for future grant
            
            
            8,252,852




*
        Reflected at the 9.25 share exchange ratio, whereby one share of FNI converted
        into 9.25 shares of the Company.
 **
        Exercised prior to the share exchange on October 30, 2007.




**Directors
      Compensation**




We
      reimbursed our directors for expenses incurred in connection with attending
      board meetings. Non-management directors are also eligible to receive quarterly
      retainer payments of $6,000 (“Retainer”). The directors have the right to accept
      payment in cash or in fully vested shares of the Company’s Common Stock equal to
      50% or 100% of the Retainer. If
      they
      elect to accept payment of all or a portion of the Retainer in shares of the
      Company's Common Stock, the number of shares issued each quarter will equal
      the
      dollar amount of the Retainer to be taken in shares, divided by 100 percent
      of
      the closing sale price of the shares on the first trading day after the end
      of
      each fiscal quarter for which the Retainer is due. No fractional shares will
      be
      issued. The number of shares issued will be rounded down to the nearest number
      of whole shares. The sale or transfer of the shares purchased with a part or
      all
      of your Retainer will be restricted for a period of six months after the date
      of
      purchase. In addition, we will pay the directors a cash incentive equal to
      20
      percent of the Retainer. It will be paid quarterly, in cash, at the time the
      quarterly installment of the Retainer is payable in shares. No
      compensation was paid to directors for the period ended June 30, 2008 or 2007.
      Two outside directors were nominated to the board on May 28, 2008.




19





**ITEM
                11.**
            **SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                STOCKHOLDER MATTERS.**




The
      following table sets forth, as of September 26, 2008, certain information with
      respect to the beneficial ownership of the Company’s common stock by each
      stockholder known by us to be the beneficial owner of more than 5% of our common
      stock, as well as by each of our current directors and executive officers and
      the directors and executive officers as a group. Beneficial ownership is
      determined in accordance with the rules of the Securities and Exchange
      Commission and generally includes voting or investment power with respect to
      securities. Shares of common stock underlying options or warrants which are
      currently exercisable, or exercisable within 60 days, are deemed outstanding
      for
      purposes of computing the percentage ownership of the person holding such option
      or warrants, but are not deemed outstanding for purposes of computing the
      percentage ownership of any other person.





**Title of**
              **Class**
            
            **Name and Address of Beneficial Owner**
            
            **Position with the**
              **Company**
            
            **Amount and**
              **Nature of**
              **Beneficial**
              **Ownership**
            
            **Percentage****of**
              **Class**(1)Common
            
            Eisenberg
                Holdings, LLC(2)
              c/o
                Jeffrey Eisenberg
              2401
                East 23rdStreet
              Brooklyn,
                NY 11235
            
            
            Jeffrey
                Eisenberg
              Director,
                President &CEO
              Bryan
                Eisenberg
              Executive
                Vice President
              and
                Director
            
            
            37,421,884
            
            
            37.9
            %Common
            
            William
                Schloth(3)
              80
                Mountain Laurel Road
              Fairfield,
                CT 06824
            
            
            Director
                and CFO
            
            
            7,041,577
            
            
            7.1
            %Common
            
            John
                Quarto-Von Tivadar
              549
                Morgan Avenue
              Brooklyn,
                NY 11222
            
            
            Chief
                Scientist
            
            
            4,545,254
            
            
            4.6
            %Common
            
            Howard
                Kaplan(4)
              184
                Sackett Street
              Brooklyn,
                NY 11231
            
            
            Chief
                Operating Officer
            
            
            2,554,023
            
            
            2.6
            %Common
            
            Professional
                Traders Fund, LLC and Professional Offshore
              Opportunity
                Fund LTD
              1400
                Old County Rd, Suite 206
              Westbury,
                NY 11590
            
            
            5%
                stockholder
            
            
            5,714,266
            
            
            5.8
            %Common
            
            Roy
              Williams (6)
            
            
            Director
            
            
            4,327,476
            
            
            4.4
            %Common
            
            Alan
              Hall (5)
            
            
            Director
            
            
            1,987,142
            
            
            2.0
            %Common
            
            Directors
                and Executive Officers as a Group
              (7
                persons)
            
            
            
            
            
            57,877,356
            
            
            58.7
            %




(1)
            Based
                on 98,610,952 shares of common stock (including warrants and options
                on an
                as-converted or exercised basis) as of September 26, 2008. Except
                as
                otherwise indicated, we believe that the beneficial owners of the
                common
                stock listed above, based on information furnished by such owners,
                have
                sole investment and voting power with respect to such shares, subject
                to
                community property laws where applicable.(2)
            Eisenberg
                Holdings, LLC is wholly owned by Jeffrey Eisenberg, our CEO and President,
                Bryan Eisenberg, our Executive Vice President of Intellectual Property,
                and Esther Eisenberg. Bryan and Jeffrey Eisenberg are the managing
                members
                of the LLC and have split voting and investment control. Includes
                740,000
                four year vesting stock options, 370,000 for each of Bryan and Jeffrey
                Eisenberg.(3)
            Includes
                4,446,484 fully vested stock options and 370,000 four-year vesting
                stock
                options. The remaining balance of 2,025,093 shares includes, on an
                as-converted basis using a multiple of 9.25: (a) 175,093 original
                shares
                of Future Now, Inc. owned by Fintech Group LLC., an entity 100% owned
                by
                Mr. Schloth, and (b) 1,850,000 shares owned directly by Mr. Schloth,
                acquired through the exercise of options..(4)
            Includes
                1,670,134 fully vested stock options and 370,000 four year vesting
                stock
                options. The remaining balance of 513,889 , on an as-converted basis
                using
                a multiple of 9.25, represents shares owned directly by Mr. Kaplan
                through
                an exercise of options.(5)
            Includes
                277,778 stock purchase warrants that are fully exercisable and were
                received as part of an investment made by Mr. Hall into the Company
                as
                well as 100,000 four year vesting stock options. The remaining balance
                of
                1,609,364 shares includes: (a) 1,031,586 shares received as part
                of the
                EBI acquisition; (ii) 555,556 shares issued as part of Mr. Hall’s $100,000
                investment in the Company, and (iii) 22,222 shares received as a
                quarterly
                retainer for being a member of the Board of Directors.(6)
            Includes
                100,000 four year vesting stock options. The remaining balance of
                4,227,476 shares includes: (i) 4,205,254 shares of common stock,
                and (ii)
                22,222 shares of common stock issued as the quarterly retainer for
                being a
                member of the Board of Directors.




**Changes
      in Control**




There
      are
      no arrangements that may result in a change of control of us.


20





**ITEM
                12.**
            **CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
                INDEPENDENCE.**





**Transactions
      with Related Persons**





Other
      than set forth below, we have not been a party to any transaction, proposed
      transaction, or series of transactions during the last year in which the amount
      involved exceeds the lesser of (a) $120,000 or (b) one percent (1%) of
      the average of our total assets at year end for the last three completed fiscal
      years, and in which, to our knowledge, any of the following persons had, or
      is
      to have, a direct or indirect material interest: a director or executive
      officer; a nominee for election as a director; a beneficial owner of more than
      five percent of the outstanding shares of our common stock; or any member of
      the
      immediate family of any such person.





***Loans***





Pursuant
      to a promissory note dated October 22, 2007, William Schloth borrowed $70,000
      from Future Now, Inc. to finance the exercise of options. The promissory note
      is
      secured by Mr. Schloth’s stock options. The principal is to be repaid on the
      earlier of (a) Mr. Schloth’s termination as our Chief Financial Officer, or
      (b) two years from the date of the promissory note.





Pursuant
      to a promissory note, dated October 22, 2007, Howard Kaplan borrowed $25,000
      from Future Now, Inc. to finance the exercise of options. The promissory note
      is
      secured by Mr. Kaplan’s stock options. The principal is to be repaid on the
      earlier of (a) Mr. Kaplan’s termination as our Chief Operating Officer, or
      (b) two years from the date of the promissory note.





***Eisenberg
      Holdings, LLC (“EHI”)***




EHI
      was
      established on September 22, 2003, and is presently owned 40% by Jeffrey
      Eisenberg, our Chief Executive Officer, 40% by Bryan Eisenberg, the Executive
      Vice President of the Company (collectively, the “Eisenbergs”), and 10% by
      Esther Eisenberg. As of June 30, 2008, EHI held 36,681,884 shares of our common
      stock, which equals 48.6% basic, and 44.0% fully diluted ownership. EHI operates
      as a holding company for the Eisenberg’s investment portfolio as well as an
      operating entity for individual speaking and other publishing activities of
      the
      Eisenbergs. Along with the release of the Eisenbergs’ book, “Waiting for your
      Cat to Bark?” in 2006, we have recorded a non-recurring publishing and book
      promotion expense, net of book sales in the amount of $1,580 and ($157,171)
      in
      other (income) expense for the years ended June 30, 2008, and 2007
      respectively.





**Director
      Independence**




Our
      determination of independence of directors is made using the definition of
      ‘‘independent director’’ contained under Rule 4200(a)(15) of the Rules of FINRA.
      Jeffrey Eisenberg serves as our Chief Executive Officer and President, and
      therefore is not “independent” under this rule. Bryan Eisenberg serves as our
      Executive Vice President of Intellectual Property, and therefore is not
“independent” under this rule. William Schloth serves as our Chief Financial
      Officer, and therefore is not “independent” under this rule. Along with the
      completion of the share exchange with EBI, we expanded the board of directors
      to
      five members by nominating Roy Williams and Alan Hall as members. Both are
      deemed independent under FINRA rules.


21





**ITEM
              13.**
            **EXHIBITS.**




**Exhibit**
              **Number**
            
            **Description**10.1*
            
            Securities
                Purchase Agreement, dated May 5, 2008, previously filed with our
                current
                report on Form 8-K, filed with the SEC on May 9, 2008, and incorporated
                by
                reference herein.10.2*
            
            Share
                Exchange Agreement, dated May 29, 2008, previously filed with our
                current
                report on Form 8-K, filed with the SEC on June 4, 2008, and incorporated
                by reference herein.31.1**
            
            Rule
                13a-14(a) Certification of the Chief Executive Officer.31.2**
            
            Rule
                13a-14(a) Certification of the Chief Financial Officer.32.1**
            
            Section
                1350 Certification of Chief Executive Officer.32.2**
            
            Section
                1350 Certification of Chief Financial
                Officer.




*
            Filed
                previously.





**
            Filed
                herewith.


22


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





**Fees
      to Independent Auditors**




The
      following table indicates the fees paid by us for services performed in for
      the
      twelve month periods ended June 30, 2008 and June 30, 2007:




**Year**
              **Ended**
              **June 30, 2008**
            
            **Year**
              **Ended**
              **June 30, 2007**Audit
                Fees
            
            **$**
            25,000
            
            **$**
            25,000Audit-Related
                Fees
            
            
            15,000
            
            
            10,000Tax
                Fees
            
            
            0
            
            
            0All
                Other Fees
            
            
            0
            
            
            0**Total**
            
            **$**
            40,000
            
            **$**
            35,000





***Audit
      Fees*** *.* This
      category includes the aggregate fees billed for professional services rendered
      by the independent auditors during the year ended June 30, 2008 and 2007,
      respectively, for the audit of our consolidated financial
      statements.




***Audit-Related
      Fees*** *.* This
      category includes the aggregate fees billed for non-audit services, exclusive
      of
      the fees disclosed relating to audit fees, during the years ended June 30,
      2008
      and 2007. These services principally include the assistance and issuance of
      consents for various filings with the SEC.




***Tax
      Fees*** *.* This
      category includes the aggregate fees billed for tax services rendered in the
      preparation of our federal and state income tax returns.




***All
      Other Fees*** *.* This
      category includes the aggregate fees billed for all other services, exclusive
      of
      the fees disclosed above, rendered during the years ending June 30, 2008 and
      2007.


23




**SIGNATURES**




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




FUTURE
                NOW GROUP INC.Dated:
                September 29, 2008
            By:
            /s/
                Jeffrey EisenbergJeffrey
                EisenbergPrincipal
                Executive Officer




Pursuant
      to the requirements of the Securities Exchange Act of 1934, as amended, this
      amended report has been signed by the following persons in the capacities and
      on
      the dates indicated.





**Signature**
            
            **Title**
            
            **Date**/s/
                Jeffrey Eisenberg
            
            Chief
                Executive Officer and Director
            
            September
                29, 2008Jeffrey
                Eisenberg/s/
                William E. Schloth
            
            Chief
                Financial and Accounting Officer and Director
            
            September
                29, 2008William
                Schloth


24




**Exhibit
      Index**





**Exhibit**
              **Number**
            
            **Description**10.1*
            
            Securities
                Purchase Agreement, dated May 5, 2008, previously filed with our
                current
                report on Form 8-K, filed with the SEC on May 9, 2008, and incorporated
                by
                reference herein.10.2*
            
            Share
                Exchange Agreement, dated May 29, 2008, previously filed with our
                current
                report on Form 8-K, filed with the SEC on June 4, 2008, and incorporated
                by reference herein.31.1**
            
            Rule
                13a-14(a) Certification of the Chief Executive Officer.31.2**
            
            Rule
                13a-14(a) Certification of the Chief Financial Officer.32.1**
            
            Section
                1350 Certification of Chief Executive Officer.32.2**
            
            Section
                1350 Certification of Chief Financial Officer.*
            
            Filed
                previously.**
            
            Filed
                herewith.


25