**UNITED        STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM        10-K**

 

*(Mark        One)*

þ          Annual        report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the        fiscal year ended**December 31,        2007**.

o       Transition report pursuant to        Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period        from      to. 

 

Commission file number:**000-52028**

 

**MISTRAL VENTURES, INC.**

(Exact        name of registrant as specified in its charter)

|  

**Nevada**

(State or other jurisdiction of

incorporation or organization) | **20-2745790** 

(I.R.S. Employer

Identification No.) |
|-------------------------------------------------------------------------------------|-------------------------------------------------------------|

 

**809-4438 West 10th Avenue, Vancouver, British Columbia V6R        4R8, Canada**

(Address        of principal executive offices) (Zip Code)

 

**(604) 725-4160**

(Issuer’s telephone number, including area code)

 

Securities registered under Section 12(b) of the Exchange Act:        none.

Securities registered under Section 12(g) of the Exchange Act: common stock        (title of class), $0.001 par value.

Indicate        by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of        the Securities Act of 1933: Yeso     Noþ.

Indicate        by check mark if the registrant is not required to file reports pursuant to Section 13 or        Section 15(d) of the Exchange Act: Yeso     Noþ.

Indicate        by check mark whether the registrant: (1) filed all reports required to be filed by Section        13 or 15(d) of the 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: Yesþ     Noo.

Indicate        by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K        is not contained herein, and will not 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-K or any amendment to this Form 10-Ko.

Indicate        by check mark whether the registrant is a large accelerated filer, an accelerated filer, a        non-accelerated filer, or a smaller reporting company as defined by Rule 12b-2 of the        Exchange Act: smaller reporting companyþ.

Indicate        by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the        Exchange Act): Yesþ     Noo.

The        aggregate market value of the registrant's common stock, $0.001 par value, held by        non-affiliates (14,840,000 shares) was approximately $16,769,200 based on the average        closing bid and asked prices ($1.13) for the common stock on April 3, 2008.

At April 4,        2008, the number of shares outstanding of the registrant's common stock, $0.001 par value        (the only class of voting stock), was 42,350,000.

 

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**TABLE OF CONTENTS**

**           **Page**    
**PART I.**
     Item       1.                           Business  3  Item       1A.                         Risk Factors  7  Item       1B.                         Unresolved Staff Comments  9  Item       2.                           Properties  9  Item       3.                           Legal Proceedings  10  Item       4.                           Submission of Matters to a Vote of                    Security Holders  10 
**PART II.**
     Item       5.                           Market for Registrant's Common                    Equity, Related Stockholder Matters, and Issuer Purchases of Equity                    Securities  10  Item       6.                           Selected Financial Data  12  
Item       7.                               Management's Discussion and                        Analysis of Financial Condition and Results of Operations
  12  Item       7A.     Quantitative                    and Qualitative Disclosures about Market Risk  16  Item       8.                           Financial Statements and Supplementary Data  16  Item       9.                           Changes in and Disagreements with Accountants on Accounting and Financial                    Disclosure  17  Item       9A.     Controls                    and Procedures (Item 9A (T))  17  Item       9B.     Other                    Information  17 
**PART III.**
     Item     10.                         Directors, Executive Officers and Corporate                    Governance  18  Item     11.                         Executive Compensation  20  Item     12.                         Security Ownership of Certain Beneficial Owners                    and Management and Related Stockholder Matters  21  Item     13.                         Certain Relationships and Related Transactions,                    and Director Independence  22  Item     14.                         Principal Accountant Fees and Services  22  Item     15.                         Exhibits and Financial Statement                    Schedules  23                                            Signatures  24    **
**            2        **

 

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**PART        I**

 

| **ITEM 1.** | **BUSINESS** |
|-------------|--------------|

 

***As        used herein the terms “Company,” “we,” “our,” and        “us” refer to Mistral Ventures, Inc., unless context indicates        otherwise.***

 

**Corporate History**

 

The Company        was incorporated in the State of Nevada on May 13, 2005 to engage in the acquisition,        exploration, and development of natural resource properties.

 

On February        9, 2006, we purchased the Gold Bug Project from John Xinos. The property, which was        without known exploitable reserves, consisted of six mineral cell claims having a total        surface area of approximately 315 acres in Beaverdell, British Columbia, Canada. We engaged        Madman on September 21, 2006 to complete initial exploration work on the property. On        April 12, 2007, the Company received the results from the first phase of the exploration;        Madman was unable to identify economically viable deposits of precious metals. Shortly        thereafter, management decided to discontinue mining activities on the property. Ownership        of the claim was transferred to Lloyd Christopher Brewer on January 28th, 2007        in exchange for forgiveness of exploration expenses due by the Company.

 

On        September 7, 2007, we entered into a purchase agreement with CypherEdge Technologies, Inc.        (“CypherEdge”), and its stockholders. CypherEdge is in the business of        providing solutions to wireless service providers in an effort to improve customer        experience, quality of service, network reliability, and profitability. The Company was to        acquire all of the issued and outstanding shares of common stock of CypherEdge in exchange        for an aggregate of 83,000,000 shares of our common stock on or before December 31, 2007.        Further, the Company agreed to loan CypherEdge $1,000,000 in advance of the closing of        which we loaned $975,000, at 10% per annum, due in full by December 31, 2007. However, due        to a failure to satisfy certain conditions of the agreement the closing date was not met        and the prospective transaction was abandoned. The loan to CypherEdge is currently in        default and the Company has provided notice of its intention to collect the outstanding        debt.

 

On January        30, 2008, the Company entered into an agreement with Trustcash Holdings, Inc. ("Trustcash")        and Paivis, Corp. ("Paivis") whereby the Company agreed to finance, on a best efforts        basis, a minimum of $2,000,000 but no more than $7,000,000 of the financing required by        Trustcash under a Definitive Agreement and Plan of Merger between Trustcash and Paivis        dated December 20, 2007, as amended February 5, 2008. The Company further agreed to provide        interim financing to both Paivis and Trustcash of at least $150,000 to cover costs        associated with the prospective merger and general working capital of which $25,000 had        been provided as of March 31, 2008.

 

The        Company’s plan of operation for the coming year is to (i) complete a financing as        committed to Trustcash and Paivis and (ii) to identify and acquire an alternative business        opportunity. We will not limit our options to any particular industry, but will evaluate        each opportunity on its own merits.

 

The        Company’s principal place of business is located at 809-4438 West 10th        Avenue, Vancouver, British Columbia V6R 4R8, Canada, and our telephone number is (604)        725-4160.

 

The        Company’s registered agent is Resident Agents of Nevada, Inc., 711 s. Carson Street,        suite 4, Carson City, Nevada, 89701.

 

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**The        Company**

 

***Selection of a Business***

 

The Company        is considering other business opportunities either through merger or acquisition that might        create shareholder value. The Company has no day-to-day operations at the present time. Our        officers and directors devote limited time and attention to the affairs of the        Company.

 

Management        has adopted a conservative policy of seeking opportunities that it considers to be of        exceptional quality. As a result of that policy, the Company may have to wait some time        before consummating a suitable transaction. Management recognizes that the higher the        standards it imposes upon itself, the greater may be its competitive disadvantage when        vying with other acquiring interests or entities.

 

We do not        intend to restrict our consideration to any particular business or industry segment, and        the Company may consider, among others, finance, brokerage, insurance, transportation,        communications, research and development, biotechnology, service, natural resources,        manufacturing or high-technology. However, due to our limited financial resources, the        scope and number of suitable candidate business ventures available is limited, and most        likely we will not be able to participate in more than a single business venture.        Accordingly, it is anticipated that we will not be able to diversify, but may be limited to        one merger or acquisition. This lack of diversification will not permit the Company to        offset potential losses from one business opportunity against profits from        another.

 

The        decision to participate in a specific business opportunity will be made upon        management’s analysis of the quality of the other firm’s management and        personnel, the anticipated acceptability of new products or marketing concepts, the merit        of technological changes and numerous other factors which are difficult, if not impossible,        to analyze through the application of any objective criteria. In many instances, it is        anticipated that the historical operations of a specific venture may not necessarily be        indicative of the potential for the future because of the necessity to substantially shift        a marketing approach, expand operations, change product emphasis, change or substantially        augment management, or make other changes. The Company will be dependent upon the        management of a business opportunity to identify such problems and to implement, or be        primarily responsible for the implementation of, required changes.

Since the        Company may participate in a business opportunity with a newly organized business or with a        business which is entering a new phase of growth, it should be emphasized that the Company        may incur risk due to the failure of the target’s management to have proven its        abilities or effectiveness, or the failure to establish a market for the target’s        products or services, or the failure to realize profits.

 

The Company        will not acquire or merge with any company for which audited financial statements cannot be        obtained. It may be anticipated that any opportunity in which we participate will present        certain risks. Many of these risks cannot be adequately identified prior to selection of        the specific opportunity, and the Company’s shareholders must, therefore, depend on        the ability of management to identify and evaluate such risk. In the case of some of the        opportunities available to us, it may be anticipated that the founders thereof have been        unable to develop a going concern or that such business is in its development stage in that        it has not generated significant revenues from its principal business activities prior to        our participation.

 

 

 

 

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***Acquisition of Business***

 

In        implementing a structure for a particular business acquisition, the Company may become a        party to a merger, consolidation, reorganization, joint venture, franchise or licensing        agreement with another corporation or entity. We may also purchase stock or assets of an        existing business. On the consummation of a transaction, it is possible that our present        management and shareholders will not be in control of the Company. In addition, our        officers and directors may, as part of the terms of the acquisition transaction, resign and        be replaced by new officers and directors without a vote of our shareholders.

 

The Company        anticipates that any securities issued in any such reorganization would be issued in        reliance on exemptions from registration under applicable federal and state securities        laws. In some circumstances, however, as a negotiated element of this transaction, we may        agree to register such securities either at the time the transaction is consummated, under        certain conditions, or at a specified time thereafter. The issuance of substantial        additional securities and their potential sale into any trading market may have a        depressive effect on such market.

 

While the        actual terms of a transaction to which we may be a party cannot be predicted, it may be        expected that the parties to the business transaction will find it desirable to avoid the        creation of a taxable event and thereby structure the acquisition in a so called        “tax-free” reorganization under Section 368(a)(1) of the Internal Revenue Code        of 1986, as amended (the “Code”). In order to obtain tax-free treatment under        the Code, it may be necessary for the owners of the acquired business to own 80% or more of        the voting stock of the surviving entity. In such event, our shareholders would retain less        than 20% of the issued and outstanding shares of the surviving entity, which could result        in significant dilution in the equity of such shareholders.

 

As part of        our investigation, Company management will meet personally with management and key        personnel, may visit and inspect material facilities, obtain independent analysis or        verification of certain information provided, check references of management and key        personnel, and take other reasonable investigative measures, to the extent of our limited        financial resources and management expertise. The manner in which we participate in an        opportunity will depend on the nature of the opportunity, the needs and desires of us and        other parties, the management of the opportunity, and the relative negotiating strength of        us and such other management. With respect to any mergers or acquisitions, negotiations        with target company management will be expected to focus on the percentage of the Company        that target company shareholders would acquire in exchange for their shareholdings in the        target company.

 

Depending        upon, among other things, the target company’s assets and liabilities, our        shareholders will in all likelihood hold a lesser percentage ownership interest in the        Company following any merger or acquisition. The percentage ownership may be subject to        significant reduction in the event we acquire a target company with substantial assets. Any        merger or acquisition effected by us can be expected to have a significant dilutive effect        on the percentage of shares held by our then shareholders.

 

***Operation of Business after Acquisition***

 

Our        operation following the merger or acquisition of a business will be dependent on the nature        of the business and the interest acquired. We are unable to determine at this time whether        we will be in control of the business or whether present management will be in control of        the Company following the acquisition. It may be expected that the business will present        various challenges that cannot be predicted at the present time.

 

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**Competition**

 

The Company        will be involved in intense competition with other business entities, many of which will        have a competitive edge over the Company by virtue of their stronger financial resources        and prior experience in business. There is no assurance that we will be successful in        obtaining suitable business opportunities.

 

**Patents, Trademarks, Licenses, Franchises, Concessions, Royalty        Agreements and Labor Contracts**

 

The Company        is not a party to any patents, trademarks, licenses, franchises, concessions, royalty        agreements and labor contracts.

 

**Governmental Regulation**

 

We cannot        anticipate the government regulations, if any, to which the Company may be subject until we        have acquired an interest in a business. The use of assets to conduct a business that we        may acquire could subject us to environmental, public health and safety, land use, trade,        or other governmental regulations and state or local taxation. In selecting a business in        which to acquire an interest, management will endeavor to ascertain, to the extent of the        limited resources of the Company, the effects of such government regulation on the        prospective business of the Company. In certain circumstances, however, such as the        acquisition of an interest in a new or start-up business activity, it may not be possible        to predict with any degree of accuracy the impact of government regulation.

 

**Environmental Laws**

We are not        currently affected by compliance with any environmental laws and cannot anticipate the laws        to which the Company may be subject.

**Employees**

 

The Company        currently has no employees. Our executive officers devote as much time to the affairs of        the Company as they deems appropriate. Management of the Company uses consultants,        attorneys, and accountants as necessary, and does not anticipate a need to engage any        full-time employees as long as business needs are being identified and evaluated. The need        for employees and their availability will be addressed in connection with a decision        concerning whether or not to acquire or participate in a specific business        venture.

**Reports to Security Holders**

The        Company’s annual report contains audited financial statements. We are not required to        deliver an annual report to security holders and will not automatically deliver a copy of        the annual report to our security holders unless a request is made for such delivery. We        file all of our required reports and other information with the Commission. The public may        read and copy any materials that are filed by the Company with the Securities and Exchange        Commission (the “Commission”) at the Commission’s Public Reference Room        at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the        operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The        statements and forms filed by us with the Commission have also been filed electronically        and are available for viewing or copy on the Commission maintained Internet site that        contains reports, proxy and information statements, and other information        regarding issuers that file electronically with the Commission. The Internet address for        this site can be found at*http://www.sec.gov*.

 

 

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| **ITEM 1A.** | **RISK FACTORS** |
|--------------|------------------|

 

The        Company’s operations and securities are subject to a number of risks. Below we have        identified and discussed the material risks that we are likely to face. Should any of the        following risks occur, they will adversely affect our operations, business, financial        condition and/or operating results as well as the future trading price and/or the value of        our securities.

 

**Risks        Related to the Company’s Business**

 

***The        Company’s ability to continue as a going concern is in question***

 

The        Company’s auditors included an explanatory statement in Note 1 of their report of        financial statements for the years ended December 31, 2007 and 2006, stating that there are        certain factors which raise substantial doubt about the Company’s ability to continue        as a going concern. These factors include limited revenue generating activities in place,        and losses since inception.

 

***Our        operating losses may continue into the future, resulting in a decrease in share        value.***

 

Since our        inception in 2005, we have had incurred expenses without generating any revenue, resulting        in continuing losses and an accumulated deficit of $93,136 at December 31, 2007. During the        twelve months ended December 31, 2007, we recorded a net loss of $1,036,698. The Company        has never realized revenue from operations. We will continue to incur operating losses as        we maintain our search for a suitable business opportunity and satisfy our ongoing        disclosure requirements with the Securities and Exchange Commission        (“Commission”). Such continuing losses could result in a decrease in share        value.

 

***The        Company’s limited financial resources cast severe doubt on our ability to acquire a        profitable business opportunity.***

 

The        Company’s future operation is dependent upon the acquisition of a profitable business        opportunity. However, the prospect of such an acquisition is doubtful due to the        Company’s limited financial resources. Since we have no current business opportunity,        the Company is not in a position to improve this financial condition through debt or equity        offerings. Therefore, this limitation may act as a deterrent in future negotiations with        prospective acquisition candidates. Should we be unable to acquire a profitable business        opportunity the Company will, in all likelihood, be forced to cease operations.

 

***Our        chief executive officer and chief financial officer do not offer their undivided attention        to the Company.***

 

John Xinos,        who serves as our chief executive officer, and Kent Carasquero, who serves as our chief        financial officer, have responsibilities which cause them to divide their time between        several interests and as such each may not be able to provide sufficient time to ensure the        proper operation of the Company.

 

***Our        chief financial officer is the chief executive officer of Trustcash Holdings,        Inc.***

 

Kent        Carasquero, who serves as our chief financial officer and one of our directors, is the        chief executive officer and a director of Trustcash Holdings, Inc        (“Trustcash”). The Company has entered into an agreement with Trustcash and        Paivis, Corp. to provide financing required by Trustcash under a Definitive        Agreement and Plan of Merger between Trustcash and Paivis. As such, Mr.        Carasquero may have interests in the financing that are different from other shareholders        of the Company.

 

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**Risks        Related to the Company’s Stock**

 

***The        market for our stock is limited and our stock price may be volatile.***

 

The market        for our common stock has been limited due to low trading volume and the small number of        brokerage firms acting as market makers. Because of the limitations of our market and        volatility of the market price of our stock, investors may face difficulties in selling        shares at attractive prices when they want to. The average daily trading volume for our        stock has varied significantly from week to week and from month to month, and the trading        volume often varies widely from day to day.

 

***Our        internal controls over financial reporting may not be considered effective in the future,        which could result in a loss of investor confidence in our financial reports and in turn        have an adverse effect on our stock price.***

 

Pursuant to        Section 404 of the Sarbanes-Oxley Act of 2002 we are required to furnish a report by our        management on our internal controls over financial reporting. Such report must contain,        among other matters, an assessment of the effectiveness of our internal controls over        financial reporting as of the end of the year, including a statement as to whether or not        our internal controls over financial reporting are effective. This assessment must include        disclosure of any material weaknesses in our internal controls over financial reporting        identified by management. If we are unable to continue to assert that our internal controls        are effective, our investors could lose confidence in the accuracy and completeness of our        financial reports, which in turn could cause our stock price to decline.

 

***The        Company does not pay dividends.***

 

The Company        does not pay dividends. We have not paid any dividends since inception and have no        intention of paying any dividends in the foreseeable future. Any future dividends would be        at the discretion of our board of directors and would depend on, among other things, future        earnings, our operating and financial condition, our capital requirements, and general        business conditions. Therefore, shareholders should not expect any type of cash flow        from their investment.

 

***The        Company will require additional capital funding.***

 

We will        require additional funds, either through additional equity offerings or debt placements, in        order to expand our operations. Such additional capital may result in dilution to our        current shareholders. Further, our ability to meet short-term and long-term financial        commitments will depend on future cash. There can be no assurance that future income will        generate sufficient funds to enable us to meet our financial commitments.

 

***The        Company’s shareholders may face significant restrictions on their        stock.***

 

The        Company’s stock differs from many stocks in that it is a “penny stock.”        The Commission has adopted a number of rules to regulate “penny stocks”        including, but not limited to, those rules from the Securities Act as follows:

 

|   | 3a51-1 | which defines penny stock as, generally speaking, those                        securities which are not listed on either NASDAQ or a                        national securities exchange and are priced under $5, excluding securities                        of issuers that have net tangible assets greater than $2 million if they                        have been in operation at least three years, greater than $5 million if in                        operation less than three years, or average revenue of at least $6 million                        for the last three years; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

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|   | 15g-1 | which outlines transactions by broker/dealers which are                        exempt from 15g-2 through 15g-6 as those whose commissions from traders are                        lower than 5% total commissions; |
|--------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 15g-2 | which details that brokers must disclose risks of penny                        stock on Schedule 15G; |
|--------|-------|-------------------------------------------------------------------------------------------------------|

|   | 15g-3 | which details that broker/dealers must disclose quotes and                        other information relating to the penny stock market; |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | 15g-4 | which explains that compensation of broker/dealers must be                        disclosed; |
|--------|-------|----------------------------------------------------------------------------------------------|

|   | 15g-5 | which explains that compensation of persons associated in                        connection with penny stock sales must be disclosed; |
|--------|-------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | 15g-6 | which outlines that broker/dealers must send out monthly                        account statements; and |
|--------|-------|---------------------------------------------------------------------------------------------------------|

|   | 15g-9 | which defines sales practice requirements. |
|--------|-------|--------------------------------------------|

Since the        Company’s securities constitute a “penny stock” within the meaning of the        rules, the rules would apply to us and our securities. Because these rules provide        regulatory burdens upon broker-dealers, they may affect the ability of shareholders to sell        their securities in any market that may develop; the rules themselves may limit the market        for penny stocks. Additionally, the market among dealers may not be active. Investors in        penny stock often are unable to sell stock back to the dealer that sold them the stock. The        mark-ups or commissions charged by the broker-dealers may be greater than any profit a        seller may make. Because of large dealer spreads, investors may be unable to sell the stock        immediately back to the dealer at the same price the dealer sold the stock to the investor.        In some cases, the stock may fall quickly in value. Investors may be unable to reap any        profit from any sale of the stock, if they can sell it at all.

 

Shareholders should be aware that, according to Commission Release No.        34-29093 dated April 17, 1991, the market for penny stocks has suffered from patterns        of fraud and abuse. These patterns include:

 

|   | **•** | control of the market for the security by one or a few                        broker-dealers that are often related to the promoter or issuer; |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | manipulation of prices through prearranged matching of                        purchases and sales and false and misleading press releases; |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | “boiler room” practices involving high pressure                        sales tactics and unrealistic price projections by inexperienced sales                        persons; |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | excessive and undisclosed bid-ask differentials and markups                        by selling broker-dealers; and |
|--------|------------|-------------------------------------------------------------------------------------------------------------------|

|   | **•** | the wholesale dumping of the same securities by promoters                        and broker-dealers after prices have been manipulated to a desired level,                        along with the inevitable collapse of those prices with consequent investor                        losses. |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

| **ITEM 1B.** | **UNRESOLVED STAFF COMMENTS** |
|--------------|-------------------------------|

 

Not        applicable.

 

| **ITEM 2.** | **PROPERTIES** |
|-------------|----------------|

 

The Company        currently maintains its offices at 809-4438 West 10th Avenue, Vancouver, British        Columbia V6R 4R8, Canada. The Company has paid $1,200 for each of the years ended December        31, 2007 and 2006 to an officer and director for the use of this address. We believe that        we have sufficient office space for the foreseeable future in order to carry out the plan        of operation described herein.

 

 

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| **ITEM 3.** | **LEGAL PROCEEDINGS** |
|-------------|-----------------------|

 

The        Company is currently not a party to any legal proceedings.

 

However,        CypherEdge Technologies, Inc. is in default of the terms of a Secured Promissory Note with        a principle of $975,000 and unpaid accrued interest of $26,096 at December 31, 2007. As        such, the Seattle, Washington offices of Davis Wright Tremaine LLP have served legal notice        to CypherEdge Technologies, Inc., on behalf of the Company in respect to our intention to        collect the debt.

 

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

 

No matters        were submitted to a vote of the security holders, through the solicitation of proxies or        otherwise, during the fourth quarter ended December 31, 2007.

 

**PART        II**

 

| **ITEM 5.** | **MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS,                        AND ISSUER PURCHASES OF EQUITY SECURITIES** |
|-------------|-----------------------------------------------------------------------------------------------------------------------------|

 

The        Company’s common stock trades under the symbol "MILV". Our common stock was first        quoted on the Over-the-Counter Bulletin Board on December 14, 2006. However, our common        stock did not trade until January 2008. As such, we have no high and low bid prices to        report for each of the quarters covered by the Form 10-K.

 

**Capital Stock**

 

The        following is a summary of the material terms of the Company’s capital stock. This        summary is subject to and qualified by our articles of incorporation and bylaws.

 

***Common Stock***

 

As of April        4, 2008, there were 66 shareholders of record holding a total of 42,350,000 shares of fully        paid and non-assessable common stock of the 1,125,000,000 shares of common stock, par value        $0.001, authorized. The board of directors believes that the number of beneficial owners is        greater than the number of record holders because a portion of our outstanding common stock        is held in broker “street names” for the benefit of individual investors. The        holders of the common stock are entitled to one vote for each share held of record on all        matters submitted to a vote of stockholders. Holders of the common stock have no preemptive        rights and no right to convert their common stock into any other securities. There are no        redemption or sinking fund provisions applicable to the common stock.

 

On June 1,        2007 the Company effected a 1 to 6 forward split of all outstanding common shares and a        corresponding forward increase in the Company’s authorized common stock. On September        11, 2007 the Company effected a further 1 to 2.5 forward split of all outstanding common        shares and a corresponding forward increase in the Company’s authorized common        stock.

 

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***Preferred Stock***

 

The Company        has no preferred stock authorized.

 

 

***Warrants***

 

As of April        4, 2008, the Company had 25,200,000 warrants exercisable at $0.04 a share until September        19, 2008.

 

***Stock        Options***

 

As of April        4, 2008, the Company had no outstanding stock options to purchase shares of our common        stock.

 

***Dividends***

 

The Company        has not declared any cash dividends since inception and does not anticipate paying any        dividends in the near future. The payment of dividends is within the discretion of the        board of directors and will depend on our earnings, capital requirements, financial        condition, and other relevant factors. There are no restrictions that currently limit the        Company's ability to pay dividends on its common stock other than those generally imposed        by applicable state law.

 

**Transfer Agent and Registrar**

 

Our        transfer agent is Signature Stock Transfer, located at PMB 307-2220 Coit Road, Suite #480,        Plano TX, 75075, and their telephone number is (972) 612-4120.

 

**Purchases of Equity Securities made by the Issuer and Affiliated        Purchasers**

 

None.

**Recent        Sales of Unregistered Securities**

 

On        September 4, 2007, the Company entered into a subscription agreement to issue 2,000,000        shares of restricted stock for cash consideration of $1,000,000 or $0.50 a share to Ludwig        Holdings Limited pursuant to the exemptions from registration provided by Regulation S and        Section 4(2) of the Securities Act of 1933, as amended. No commission was paid in        connection with the subscription. The shares purchased were issued to the subscriber on        March 31, 2008.

 

The Company        complied with the exemption requirements of Section 4(2) based on the following factors:        (1) the issuance was an isolated private transaction that did not involve a public        offering; (2) there was only one offeree who was issued stock for cash consideration; (3)        the offeree committed to hold the stock for at least one year; (4) there were no subsequent        or contemporaneous public offerings of the stock; (5) the stock was not broken down into        smaller denominations; and (6) the negotiations that lead to the issuance of the stock took        place directly between the offeree and the Company.

 

Regulation        S provides generally that any offer or sale that occurs outside of the United States is        exempt from the registration requirements of the Securities Act, provided that certain        conditions are met. Regulation S has two safe harbors. One safe harbor applies to offers        and sales by issuers, securities professionals involved in the distribution        process pursuant to contract, their respective affiliates, and persons acting on behalf of        any of the foregoing (the “issuer safe harbor”), and the other applies to        resales by persons other than the issuer, securities professionals involved in the        distribution process pursuant to contract, their respective affiliates (except certain        officers and directors), and persons acting on behalf of any of the forgoing (the        “resale safe harbor”). An offer, sale or resale of securities that satisfied        all conditions of the applicable safe harbor is deemed to be outside the United States as        required by Regulation S. The distribution compliance period for shares sold in reliance on        Regulation S is six months.

 

 

11

 

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The Company        complied with the requirements of Regulation S by having made no directed offering efforts        in the United States, by offering only to an offeree who was outside the United States at        the time the subscription agreement was accepted, and ensuring that the offeree to whom the        stock is to be issued is a non-U.S. offeree with an address in a foreign        country. 

 

| **ITEM 6.** | **SELECTED FINANCIAL DATA** |
|-------------|-----------------------------|

 

Not        required.

 

| **ITEM 7.** | **MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL                        CONDITION AND RESULTS OF OPERATIONS** |
|-------------|------------------------------------------------------------------------------------------------------------------------|

 

This*Management’s Discussion and Analysis of Financial Condition        and**Results of Operations*and other        parts of this current report contain forward-looking statements that involve risks and        uncertainties. Forward-looking statements can also be identified by words such as        “anticipates,” “expects,” “believes,”        “plans,” “predicts,” and similar terms. Forward-looking statements        are not guarantees of future performance and our actual results may differ significantly        from the results discussed in the forward-looking statements. Factors that might cause such        differences include but are not limited to those discussed in the subsection        entitled*Forward-Looking Statements and Factors That May Affect        Future Results and Financial Condition*below. The following        discussion should be read in conjunction with our financial statements and notes thereto        included in this current report. Our fiscal year end is December 31.

 

**Discussion and Analysis**

 

During the        year ended December 31, 2007, our operations were focused on (i) exploratory mining        operations, (ii) performing due diligence and entering into an agreement with CypherEdge        Technologies, Inc., (iii) identifying a suitable business opportunity for acquisition, and        (iv) satisfying continuous public disclosure requirements.

 

Subsequent        to the year ended December 31, 2007, we entered into a Binding Term Sheet with Trustcash        Holdings, Inc. ("Trustcash") and Paivis, Corp. ("Paivis") whereby the Company agreed to        finance, on a best efforts basis, a minimum of $2,000,000 but no more than $7,000,000 of        the financing required by Trustcash under a Definitive Agreement and Plan of Merger between        Trustcash and Paivis dated December 20, 2007, as amended February 5, 2008. The Company        further agreed to provide interim financing to both Paivis and Trustcash of at least        $150,000 to cover costs associated with the prospective merger and general working        capital.

 

The        Company’s plan of operation will require a minimum of $2,150,000 in funding over the        next 12 months pursuant to the Binding Term Sheet, and an additional $100,000 to continue        the search for a suitable business opportunity. This funding is not currently available.        Should, we acquire a suitable business opportunity within the next 12 months our funding        requirements may change.

 

**Results of Operations**

 

The        Company has been funded since inception from public or private debt or equity placements or        by related parties in the form of loans. We do not expect to realize revenue within the        next twelve months or until such time as we enter into a transaction to acquire a revenue        producing business.

 

 

12

 

----

 

***Losses***

 

For the        period from May 13, 2005 (inception) to December 31, 2007, the Company recorded net losses        of $1,094,232. Net losses for the year ended December 31, 2007 were $1,036,698 as compared        to $51,761 for the year ended December 31, 2006. The Company’s losses are primarily        attributable to general and administrative expenses, mining related costs as well as        write-down of loan receivable. The general and administrative expenses include        incorporation costs, accounting expenses, professional fees, consulting fees and costs        associated with the preparation of disclosure documentation in connection with registration        pursuant to the Exchange Act of 1934, as amended (“Exchange Act”). Legal and        accounting fees were a major portion of these expenses, at $44,789 and $25,424 in 2007 and        2006, respectively.

 

The Company        has not generated any revenues since inception and expects to continue to incur losses over        the next twelve months.

         

***Income Tax Expense (Benefit)***

         

The Company        has a prospective income tax benefit resulting from a net operating loss carryforward and        start up costs that will offset any future operating profit.

 

***Impact of Inflation***

 

The Company        believes that inflation has had a negligible effect on operations since inception. We        believe that we can offset inflationary increases in the cost of materials and labor by        increasing sales and improving operating efficiencies.

 

***Capital Expenditures***

 

The Company        expensed no amounts on capital expenditures from inception to December 31, 2007.

 

***Liquidity and Capital Resources***

 

Cash flow        used in operating activities was $70,816 for the period from inception to December 31,        2007. Cash flow used in operating activities was $39,440 for the twelve month period ended        December 31, 2007 as compared to $30,553 for the twelve month period ended December 31,        2006. Cash flow used in operating activities over the twelve month periods can be primarily        attributed to net losses.

 

Cash flow        provided by financing activities was $78,500 for the period from inception to December 31,        2007. Cash flow used by financing activities was $30,500 for the twelve month period ended        December 31, 2007 as compared to cash flow provided from financing activities of $99,500        for the twelve month period ended December 31, 2006. Funds used by financing activities in        the current period can be attributed to a loan of $975,000 to CypherEdge Technologies,        Inc., a loan of $100,000 to Trustcash and a rescission of shares, valued at $58,000, from        shareholders who were not accredited investors.

 

The Company        is in the development stage and, since inception, has experienced changes in liquidity,        capital resources, and shareholders’ equity. The Company had current assets of        $108,917 as of December 31, 2007. These assets consisted of cash and cash equivalents        totaling $7,684 and a loan receivable of $101,233. Working capital deficit in the Company        was $15,732 at December 31, 2007. We have funded our cash needs from inception through        December 31, 2007 through debt and equity transactions. Until such time as we can increase        revenues, we expect that we will require new debt or equity transactions to satisfy cash        needs. If we are unable to increase our cash flows from operating activities or obtain        additional financing, we may not be able to continue operations.

 

13

 

----

 

 

Since        earnings, if any, will be reinvested in operations, the Company does not expect to pay cash        dividends in the foreseeable future.

 

The Company        has no current plans for the purchase or sale of any plant or equipment.

 

The Company        has no current plans to make any changes in the number of employees.

 

***Off        Balance Sheet Arrangements***

 

As of        December 31, 2007, the Company has no significant off-balance sheet arrangements that have        or are reasonably likely to have a current or future effect on our financial condition,        changes in financial condition, revenues or expenses, results of operations, liquidity,        capital expenditures, or capital resources that is material to stockholders.

 

***Going        Concern***

 

The        Company’s auditors have expressed an opinion as to our ability to continue as a going        concern. Our ability to continue as a going concern is subject to the ability of the        Company to obtain a profit and/or obtaining the necessary funding from outside sources.        Management’s plan to address the Company’s ability to continue as a going        concern, includes (i) obtaining funding from private placement sources; (ii) obtaining        additional funding from the sale of the Company’s securities; (iii) establishing        revenues from a suitable business opportunity; (iv) obtaining loans and grants from various        financial institutions where possible.. Although management believes that it will be able        to obtain the necessary funding to allow the Company to remain a going concern through the        methods discussed above, there can be no assurances that such methods will prove        successful.

 

***Forward Looking Statements and Factors That May Affect Future Results        and Financial Condition***

 

The        statements contained in the section titled “*Results of        Operations”*and*“Description        of Business”*, with the exception of historical facts, are        forward looking statements. A safe-harbor provision may not be applicable to the forward        looking statements made in this current report. Forward looking statements reflect our        current expectations and beliefs regarding our future results of operations, performance,        and achievements. These statements are subject to risks and uncertainties and are based        upon assumptions and beliefs that may or may not materialize. These statements include, but        are not limited to, statements concerning:

|   | **•** | our anticipated financial performance and business                        plan; |
|--------|------------|---------------------------------------------------------------------------------|

|   | **•** | the sufficiency of existing capital resources; |
|--------|------------|------------------------------------------------|

|   | **•** | our ability to raise additional capital to fund cash                        requirements for future operations; |
|--------|------------|-----------------------------------------------------------------------------------------------------------------|

|   | **•** | uncertainties related to the Company’s future business                        prospects; |
|--------|------------|------------------------------------------------------------------------------------------------|

|   | **•** | the ability of the Company to generate revenues to fund                        future operations; |
|--------|------------|---------------------------------------------------------------------------------------------------|

|   | **•** | the volatility of the stock market and; and |
|--------|------------|---------------------------------------------|

 

|   | **•** | general economic conditions. |
|--------|------------|------------------------------|

 

We wish to        caution readers that our operating results are subject to various risks and uncertainties        that could cause our actual results to differ materially from those discussed or        anticipated, including the factors set forth in the section entitled        “*Risk Factors*” included        elsewhere in this report. We also wish to advise readers not to place any undue reliance on        the forward looking statements contained in this report, which reflect our beliefs and        expectations only as of the date of this report. We assume no obligation to update or        revise these forward looking statements to reflect new events or circumstances or any        changes in our beliefs or expectations, other that is required by law.

 

14

 

----

 

 

***Stock-Based Compensation***

 

On January        1, 2006, we adopted SFAS No. 123 (revised 2004) (SFAS No. 123R), Share-Based Payment, which        addresses the accounting for stock-based payment transactions in which an enterprise        receives employee services in exchange for (a) equity instruments of the enterprise or (b)        liabilities that are based on the fair value of the enterprise’s equity instruments        or that may be settled by the issuance of such equity instruments. In January 2005, the        Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 107,        which provides supplemental implementation guidance for SFAS No. 123R. SFAS No. 123R        eliminates the ability to account for stock-based compensation transactions using the        intrinsic value method under Accounting Principles Board (APB) Opinion No. 25, Accounting        for Stock Issued to Employees, and instead generally requires that such transactions be        accounted for using a fair-value-based method. We use the Black-Scholes-Merton        (“BSM”) option-pricing model to determine the fair-value of stock-based awards        under SFAS No. 123R, consistent with that used for pro forma disclosures under SFAS No.        123, Accounting for Stock-Based Compensation. We have elected the modified prospective        transition method as permitted by SFAS No. 123R and accordingly prior periods have not been        restated to reflect the impact of SFAS No. 123R. The modified prospective transition method        requires that stock-based compensation expense be recorded for all new and unvested stock        options, restricted stock, restricted stock units, and employee stock purchase plan shares        that are ultimately expected to vest as the requisite service is rendered beginning on        January 1, 2006, the first day of our fiscal year 2006. Stock-based compensation expense        for awards granted prior to January 1, 2006 is based on the grant date fair-value as        determined under the pro forma provisions of SFAS No. 123.

 

Prior to        the adoption of SFAS No 123R, we measured compensation expense for our employee stock-based        compensation plans using the intrinsic value method prescribed by APB Opinion No. 25. We        applied the disclosure provisions of SFAS No. 123 as amended by SFAS No. 148, Accounting        for Stock-Based Compensation – Transition and Disclosure, as if the fair-value-based        method had been applied in measuring compensation expense. Under APB Opinion No. 25, when        the exercise price of our employee stock options was equal to the market price of the        underlying stock on the date of the grant, no compensation expense was        recognized.

 

We account        for equity instruments issued in exchange for the receipt of goods or services from other        than employees in accordance with SFAS No. 123 and the conclusions reached by the Emerging        Issues Task Force (“EITF”) in Issue No. 96-18. Costs are measured at the        estimated fair market value of the consideration received or the estimated fair value of        the equity instruments issued, whichever is more reliably measurable. The value of equity        instruments issued for consideration other than employee services is determined on the        earliest of a performance commitment or completion of performance by the provider of goods        or services as defined by EITF 96-18.

 

***Recent Accounting Pronouncements***

 

In December        2007, the FASB issued SFAS 160, “Noncontrolling interests in Consolidated Financial        Statements – an amendment of ARB No. 51”. This Statement amends        ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a        subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling        interest in a subsidiary is an ownership interest in the consolidated entity that should be        reported as equity in the consolidated financial statements. This Statement is effective        for fiscal years beginning on or after December 15, 2008. Early adoption is not permitted.        Management is currently evaluating the effects of this statement, but it is not expected to        have any impact on the Company’s financial statements.

 

15

 

----

 

         

 

In February        2007, the FASB issued SFAS 159, “The Fair Value Option for Financial Assets and        Financial Liabilities. SFAS 159 creates a fair value option allowing an entity to        irrevocably elect fair value as the initial and subsequent measurement attribute for        certain financial assets and financial liabilities, with changes in fair value recognized        in earnings as they occur. SFAS 159 also requires an entity to report those financial        assets and financial liabilities measured at fair value in a manner that separates those        reported fair values from the carrying amounts of assets and liabilities measured using        another measurement attribute on the face of the statement of financial position. Lastly,        SFAS 159 requires an entity to provide information that would allow users to understand the        effect on earnings of changes in the fair value on those instruments selected for the fair        value election. SFAS 159 is effective for fiscal years beginning after November 15, 2007        with early adoption permitted. The Company is continuing to evaluate SFAS 159 and to assess        the impact on our results of operations and financial condition if an election is made to        adopt the standard.

         

| **ITEM 7A.** | **QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET                        RISK** |
|--------------|---------------------------------------------------------------------------------------|

         

Not required.

         

| **ITEM 8.** | **FINANCIAL STATEMENTS AND SUPPLEMENTARY                        DATA** |
|-------------|------------------------------------------------------------------------|

 

Our        audited financial statements for the years ended December 31, 2007 and 2006 are attached        hereto as F-1 through F-22.

16

 

----

 

**MISTRAL VENTURES, INC.**

**(A        Development Stage Company)**

**INDEX        TO FINANCIAL STATEMENTS**

**December 31, 2007 and 2006**

 

 

|   | *Page* |
|--------|--------|

         

|   | Report of Independent Registered Public Accounting                        Firm | F-2 |
|--------|--------------------------------------------------------------------------------|-----|

         

|   | Balance Sheets | F-3 |
|--------|----------------|-----|

         

|   | Statements of Loss and Comprehensive Loss | F-4 |
|--------|-------------------------------------------|-----|

         

|   | Statements of Changes in Stockholders’                        Deficiency | F-5 |
|--------|--------------------------------------------------------------------------------|-----|

         

|   | Statements of Cash Flows | F-6 |
|--------|--------------------------|-----|

         

|   | Notes to Financial Statements | F-7 |
|--------|-------------------------------|-----|

         

                                                                                                                                                                   

         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

F-1

 

----

 

**Report        of Independent Registered Public Accounting Firm**

 

**To the Shareholders of Mistral Ventures, Inc.**

 

We have        audited the balance sheets of**Mistral Ventures, Inc.**as at 31 December 2007 and 2006, and the related statements of loss and        comprehensive loss, cash flows and changes in stockholders’ deficiency for each of        the years then ended and for the period from the date of inception on 13 May 2005 through        31 December 2007. These financial statements are the responsibility of the Company’s        management. Our responsibility is to express an opinion on these financial statements based        on our audits.

 

We        conducted our audit in accordance with the standards of the Public Company Accounting        Oversight Board (United States of America). Those standards require that we plan and        perform the audit to obtain reasonable assurance about whether the financial statements are        free of material misstatement. An audit includes examining, on a test basis, evidence        supporting the amounts and disclosures in the financial statements. An audit also includes        assessing the accounting principles used and significant estimates made by management, as        well as evaluating the overall financial statement presentation. We believe that our audit        provides 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 the Company as of 31 December 2007 and 2006 and the        results of its operations, cash flows and changes in stockholders’ deficiency for        each of the years then ended and for the period from the date of inception on 13 May 2005        to 31 December 2007 in conformity with accounting principles generally accepted in the        United States of America.

 

The        accompanying financial statements have been prepared assuming that the Company will        continue as a going concern. As discussed in Note 1 to the financial statements, conditions        exist, which raise substantial doubt about the Company’s ability to continue as a        going concern unless it is able to generate sufficient cash flows to meet its obligations        and sustain its operations. Management’s plans in regard to these matters are also        described in Note 1. The financial statements do not include any adjustments that might        result from the outcome of this uncertainty.

 

*/s/        James Stafford*

| Vancouver, Canada | **Chartered Accountants** |
|-------------------|---------------------------|

 

20 March        2008

 

 

 

 

 

 

 

 

F-2

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Balance Sheets

(Expressed in U.S. Dollars)

 

|                                                                                       |   | **As at**

**31 December**

**2007** |   | **As at**

**31 December**

**2006** |
|--------------------------------------------------------------------------------------------|--------|--------------------------------------|--------|--------------------------------------|
|                                                                                       |   | **$**                                |   | **$**                                |
|                                                                                       |   |                                 |   |                                 |
| **Assets**                                                                                 |   |                                 |   |                                 |
|                                                                                       |   |                                 |   |                                 |
| **Current**                                                                                |   |                                 |   |                                 |
| Cash and cash equivalents                                                                  |   | 7,684                                |   | 77,624                               |
| Loans receivable (Note 4)                                                                  |   | 101,233                              |   | -                                    |
| Prepaid expenses                                                                           |   | -                                    |   | 687                                  |
|                                                                                       |   |                                 |   |                                 |
|                                                                                       |   | 108,917                              |   | 78,311                               |
|                                                                                       |   |                                 |   |                                 |
| **Liabilities**                                                                            |   |                                 |   |                                 |
|                                                                                       |   |                                 |   |                                 |
| **Current**                                                                                |   |                                 |   |                                 |
| Accounts payable and accrued liabilities (Note 5)                                          |   | 20,916                               |   | 9,845                                |
| Due to related party (Note 6)                                                              |   | 2,500                                |   | -                                    |
| Loans payable (Note 8)                                                                     |   | 101,233                              |   | -                                    |
|                                                                                       |   |                                 |   |                                 |
|                                                                                       |   | 124,649                              |   | 9,845                                |
|                                                                                       |   |                                 |   |                                 |
| **Stockholder’s equity**                                                             |   |                                 |   |                                 |
| **Capital stock**(Note                        9)                                           |   |                                 |   |                                 |
| Authorized                                                                                 |   |                                 |   |                                 |
| 1,125,000,000 common shares, par value $0.001                                              |   |                                 |   |                                 |
| Issued and outstanding                                                                     |   |                                 |   |                                 |
| 31 December 2007 – 40,350,000 common shares, par value                        $0.001 |   |                                 |   |                                 |
| 31 December 2006 – 57,000,000 common shares, par value                        $0.001 |   | 40,350                               |   | 57,000                               |
| **Additional paid-in capital**                                                             |   | 38,148                               |   | 68,990                               |
| **Share subscriptions received in advance**(Note 9)                                        |   | 1,000,000                            |   | -                                    |
| **Warrants**(Note 9)                                                                       |   | 2                                    |   | 10                                   |
| **Deficit, accumulated during the development                        stage**               |   | (1,094,232)                          |   | (57,534)                             |
|                                                                                            |   |                                 |   |                                 |
|                                                                                       |   | (15,732)                             |   | 68,466                               |
|                                                                                       |   |                                 |   |                                 |
|                                                                                       |   | 108,917                              |   | 78,311                               |

 

**Nature        and Continuance of Operations**(Note 1),**Commitments**(Note        11),**Contingency**(Note 13) and**Subsequent Events**(Note 14)

 

The        accompanying notes are an integral part of these financial statements.

 

F-3

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Statements of Loss and Comprehensive Loss

(Expressed in U.S. Dollars)

 

|                                                                                                    | **For the period from the date of inception on 13 May 2005                        to 31 December**

**2007** | **For the**

**year ended**

**31 December**

**2007** | **For the**

**year ended**

**31 December**

**2006** |
|---------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|--------------------------------------------------------|
|                                                                                                    |                                                                                                         | **$**                                                  |                                                   | **$** |   | **$** |
|                                                                                                    |                                                                                                         |                                                   |                                                   |   |   |   |
| **Expenses**                                                                                            |                                                                                                         |                                                   |                                                   |   |   |   |
| Acquisition of a mineral property (Notes 3, 7, 9 and                        12)                         |                                                                                                         | 7,998                                                  |                                                   | (1,002) |   | 9,000 |
| Mineral property exploration costs                                                                      |                                                                                                         | 6,232                                                  |                                                   | 1,002 |   | 5,230 |
| Bank charges and interest                                                                               |                                                                                                         | 1,499                                                  |                                                   | 1,499 |   | - |
| Legal and accounting                                                                                    |                                                                                                         | 75,413                                                 |                                                   | 44,789 |   | 25,424 |
| Listing and filing fees                                                                                 |                                                                                                         | 2,874                                                  |                                                   | 2,112 |   | 762 |
| Management fees (Notes 7, 9 and 12)                                                                     |                                                                                                         | 16,100                                                 |                                                   | 9,300 |   | 6,800 |
| Office and miscellaneous                                                                                |                                                                                                         | 2,077                                                  |                                                   | 1,050 |   | 1,009 |
| Rent (Notes 7, 9 and 12)                                                                                |                                                                                                         | 2,400                                                  |                                                   | 1,200 |   | 1,200 |
| Transfer agent fees                                                                                     |                                                                                                         | 5,872                                                  |                                                   | 2,981 |   | 2,336 |
|                                                                                                    |                                                                                                         |                                                   |                                                   |   |   |   |
| **Net loss before other items**                                                                         |                                                                                                         | (120,465)                                              |                                                   | (62,931) |   | (51,761) |
|                                                                                                    |                                                                                                         |                                                   |                                                   |   |   |   |
| **Other items**                                                                                         |                                                                                                         |                                                   |                                                   |   |   |   |
| Interest income                                                                                         |                                                                                                         | 27,329                                                 |                                                   | 27,329 |   | - |
| Provision for write-down of loans receivable

(Notes 4, 11 and 13)                                      |                                                                                                         | (1,001,096)                                            |                                                   | (1,001,096) |   | - |
|                                                                                                    |                                                                                                         |                                                   |                                                   |   |   |   |
| **Net loss being comprehensive loss for the                        period**                             |                                                                                                         | (1,094,232)                                            |                                                   | (1,036,698) |   | (51,761) |
|                                                                                                    |                                                                                                         |                                                   |                                                   |   |   |   |
| **Basic and diluted loss per common share**                                                             |                                                                                                         |                                                   |                                                   | (0.025) |   | (0.002) |
|                                                                                                    |                                                                                                         |                                                   |                                                   |   |   |   |
| **Weighted average number of common shares used                        in**

**per share calculations** |                                                                                                         |                                                   |                                                   | 42,030,411 |   | 34,350,000 |

 

 

 

 

 

 

The        accompanying notes are an integral part of these financial statements.

F-4

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Statement of Changes in Stockholders’ Deficiency

(Expressed in U.S. Dollars)

 

|                                                                                                                   | **Number of common shares issued** | **Capital**

**stock** | **Additional**

**paid-in**

**capital and share subscriptions received in                        advance** | **Warrants** | **Deficit, accumulated during the development                        stage** | **Stockholder’s equity** |
|------------------------------------------------------------------------------------------------------------------------|------------------------------------|------------------------|-------------------------------------------------------------------------------------------------------------|--------------|------------------------------------------------------------------------------|--------------------------------|
|                                                                                                                   |                               |                   |                                                                                                        | **$**        |                                                                         | **$**                          |   | **$** |   | **$** |   | **$** |
|                                                                                                                   |                               |                   |                                                                                                        |         |                                                                         |                           |   |   |   |   |   |   |
| **Balance at 13 May 2005 (inception)**                                                                                 |                               |                   |                                                                                                        |         |                                                                         |                           |   |   |   |   |   |   |
| Common shares issued for cash ($0.001 per share)                                                                       |                               | 13,500,000             |                                                                                                        | 13,500       |                                                                         | (4,500)                        |   | - |   | - |   | 9,000 |
| Net loss for the period                                                                                                |                               | -                      |                                                                                                        | -            |                                                                         | -                              |   |   |   | (5,773) |   | (5,773) |
|                                                                                                                   |                               |                   |                                                                                                        |         |                                                                         |                           |   |   |   |   |   |   |
| **Balance at 31 December 2005**                                                                                        |                               | 13,500,000             |                                                                                                        | 13,500       |                                                                         | (4,500)                        |   | - |   | (5,773) |   | 3,227 |
| Common shares issued for a mineral property ($0.001 per                        share) (Notes 3 and 9)                  |                               | 13,500,000             |                                                                                                        | 13,500       |                                                                         | (4,500)                        |   | - |   | - |   | 9,000 |
| Common shares issued for cash ($0.05 per unit) – 20                        September 2006 (Note 9)               |                               | 30,000,000             |                                                                                                        | 30,000       |                                                                         | 69,975                         |   | - |   | - |   | 99,975 |
| Warrants granted for cash (Note 9)                                                                                     |                               | -                      |                                                                                                        | -            |                                                                         | -                              |   | 10 |   | - |   | 10 |
| Contributions to capital by related party –                        expenses                                      |                               | -                      |                                                                                                        | -            |                                                                         | 8,000                          |   | - |   | - |   | 8,000 |
| Net loss for the year                                                                                                  |                               | -                      |                                                                                                        | -            |                                                                         | -                              |   |   |   | (51,761) |   | (51,761) |
|                                                                                                                   |                               |                   |                                                                                                        |         |                                                                         |                           |   |   |   |   |   |   |
| **Balance at 31 December 2006**                                                                                        |                               | 57,000,000             |                                                                                                        | 57,000       |                                                                         | 68,990                         |   | 10 |   | (57,534) |   | 68,466 |
| Common shares rescinded for cash ($0.001 per share) –                        9 February 2007 (Note 9)            |                               | (17,400,000)           |                                                                                                        | (17,400)     |                                                                         | (40,600)                       |   | - |   | - |   | (58,000) |
| Common shares issued to a director ($0.001 per share)                        – 29 March 2007 (Notes 7, 9 and 12) |                               | 750,000                |                                                                                                        | 750          |                                                                         | 1,750                          |   | - |   | - |   | 2,500 |
| Contributions to capital by related party – expenses                        (Notes 7, 9 and 12)                  |                               | -                      |                                                                                                        | -            |                                                                         | 8,000                          |   | - |   | - |   | 8,000 |
| Share subscriptions received in advance (Note 9)                                                                       |                               | -                      |                                                                                                        | -            |                                                                         | 1,000,000                      |   | - |   | - |   | 1,000,000 |
| Warrants cancelled – 10 September 2007 (Note                        9)                                           |                               | -                      |                                                                                                        | -            |                                                                         | 8                              |   | (8) |   | - |   | - |
| Net loss for the period                                                                                                |                               | -                      |                                                                                                        | -            |                                                                         | -                              |   | - |   | (1,036,698) |   | (1,036,698) |
|                                                                                                                   |                               |                   |                                                                                                        |         |                                                                         |                           |   |   |   |   |   |   |
| **Balance at 31 December 2007**                                                                                        |                               | 40,350,000             |                                                                                                        | 40,350       |                                                                         | 1,038,148                      |   | 2 |   | (1,094,232) |   | (15,732) |

 

 

The        accompanying notes are an integral part of these financial statements.

 

F-5

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Statements of Cash Flows

(Expressed in U.S. Dollars)

 

|                                                                                                   | **For the period from the date of inception on 13 May 2005                        to 31 December**

**2007** | **For the**

**year ended**

**31 December**

**2007** | **For the**

**year ended**

**31 December**

**2006** |
|--------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|--------------------------------------------------------|
|                                                                                                   |                                                                                                         | **$**                                                  |                                                   | **$** |   | **$** |
|                                                                                                   |                                                                                                         |                                                   |                                                   |   |   |   |
| **Cash flows from operating activities**                                                               |                                                                                                         |                                                   |                                                   |   |   |   |
| Net loss for the period                                                                                |                                                                                                         | (1,094,232)                                            |                                                   | (1,036,698) |   | (51,761) |
| Adjustments to reconcile loss to net cash used by operating                        activities          |                                                                                                         |                                                   |                                                   |   |   |   |
| Accrued interest receivable                                                                            |                                                                                                         | (27,329)                                               |                                                   | (27,329) |   | - |
| Accrued interest payable                                                                               |                                                                                                         | 1,233                                                  |                                                   | 1,233 |   | - |
| Acquisition of a mineral property (Notes 3, 7, 9 and                        12)                        |                                                                                                         | 7,998                                                  |                                                   | (1,002) |   | 9,000 |
| Contributions to capital by related party –                        expenses

(Notes 7, 9 and 12) |                                                                                                         | 18,500                                                 |                                                   | 10,500 |   | 8,000 |
| Provision for write-down of loans receivable

(Notes 4,11 and 13)                                      |                                                                                                         | 1,001,096                                              |                                                   | 1,001,096 |   | - |
| Changes in operating assets and liabilities                                                            |                                                                                                         |                                                   |                                                   |   |   |   |
| Decrease (increase) in prepaid expenses                                                                |                                                                                                         | -                                                      |                                                   | 687 |   | (437) |
| Increase in accounts payable and accrued                        liabilities                            |                                                                                                         | 21,918                                                 |                                                   | 12,073 |   | 4,645 |
|                                                                                                   |                                                                                                         |                                                   |                                                   |   |   |   |
|                                                                                                   |                                                                                                         | (70,816)                                               |                                                   | (39,440) |   | (30,553) |
|                                                                                                   |                                                                                                         |                                                   |                                                   |   |   |   |
| **Cash flows from financing activities**                                                               |                                                                                                         |                                                   |                                                   |   |   |   |
| Common shares issued (rescinded) for cash (Note                        9)                              |                                                                                                         | 50,990                                                 |                                                   | (58,000) |   | 99,990 |
| Share subscriptions received in advance (Note 9)                                                       |                                                                                                         | 1,000,000                                              |                                                   | 1,000,000 |   | - |
| Increase in loans payable (Note 8)                                                                     |                                                                                                         | 100,000                                                |                                                   | 100,000 |   | - |
| Increase in loans receivable (Note 4)                                                                  |                                                                                                         | (1,075,000)                                            |                                                   | (1,075,000) |   | - |
| Advances from related party (Note 6)                                                                   |                                                                                                         | 2,500                                                  |                                                   | 2,500 |   | (500) |
| Warrants issued for cash                                                                               |                                                                                                         | 10                                                     |                                                   | - |   | 10 |
|                                                                                                   |                                                                                                         |                                                   |                                                   |   |   |   |
|                                                                                                   |                                                                                                         | 78,500                                                 |                                                   | (30,500) |   | 99,500 |
|                                                                                                   |                                                                                                         |                                                   |                                                   |   |   |   |
| **Increase (decrease) in cash and cash                        equivalents**                            |                                                                                                         | 7,684                                                  |                                                   | (69,940) |   | 68,947 |
|                                                                                                   |                                                                                                         |                                                   |                                                   |   |   |   |
| **Cash and cash equivalents, beginning of                        period**                              |                                                                                                         | -                                                      |                                                   | 77,624 |   | 8,677 |
|                                                                                                   |                                                                                                         |                                                   |                                                   |   |   |   |
| **Cash and cash equivalents, end of period**                                                           |                                                                                                         | 7,684                                                  |                                                   | 7,684 |   | 77,624 |

 

**Supplemental Disclosures with Respect to Cash Flows**(Note 12)

 

The        accompanying notes are an integral part of these financial statements.

F-6

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Notes to        Financial Statements

(Expressed        in U.S. Dollars)

**31 December 2007**

 

|   | **1.** | **Nature and Continuance of Operations** |
|--------|--------|------------------------------------------|

         

Mistral Ventures, Inc. (the “Company”) was incorporated under        the laws of the State of Nevada on 13 May 2005.

         

The Company had previously acquired a mineral property located in the        Province of British Columbia, Canada and determined that the property does not contain        reserves that are economically recoverable. As such, the property has been returned to the        original seller in exchange for forgiveness of an outstanding debt owed by the Company to        the seller (Note 3).

         

The Company is a development stage company as defined by Statement of        Financial Accounting Standard (“SFAS”) No. 7*“Accounting and Reporting by Development Stage        Enterprises”*and Industry Guide 7 of the Securities and        Exchange Commission Industry Guide. The Company no longer has interests in any mineral        properties and is devoting all of its present efforts to securing and establishing a new        business and, as such, its planned principle operations have not commenced. Accordingly, no        revenue has been derived during the organization period.

         

On 7 September 2007, the Company entered into a purchase agreement with        CypherEdge Technologies, Inc. (“CypherEdge”), and Mr. James Linkous, whereby        the Company would have the right to acquire all of the issued and outstanding common shares        of CypherEdge in consideration for the issuance of 83,000,000 shares of the Company to the        stockholders of CypherEdge (Note 11). Under the terms of the purchase agreement, the        closing of the acquisition was to take place no later than 31 December 2007. Concurrently        with the signing of the purchase agreement, the Company entered into a bridge loan        agreement with CypherEdge, whereby the Company would provide a bridging loan of up to        $1,000,000 to CypherEdge. As at 31 December 2007, $975,000 has been advanced to CypherEdge        under the bridge loan agreement (Notes 4 and 11).

         

At 31 December 2007, the purchase agreement has not closed and CypherEdge        was in default on repayment of the $975,000 related to the bridge loan agreement.        CypherEdge was presented with a demand letter on 25 January 2008 and has yet to respond        (Note 13).

         

The Company’s financial statements as at 31 December 2007 and for the        year then ended have been prepared on a going concern basis, which contemplates the        realization of assets and the settlement of liabilities and commitments in the normal        course of business. The Company has a loss of $1,036,698 for the year ended 31 December        2007 (31 December 2006 - $51,761) and has working capital deficit of $15,732 at 31 December        2007 (31 December 2006 – working capital of $68,466).

         

On 2 May 2007 the board of directors of the Company authorized a one to six        forward split of all outstanding common shares and a corresponding forward increase in the        Company’s authorized common stock pursuant to Section 78.209 of the Nevada Revised        Statutes. The forward split and increase in authorized common stock was made effective as        of 1 June 2007. The effect of the forward split was to increase the number of the        Company’s common shares issued and outstanding from 2,690,000 to 16,140,000 and to        increase the Company’s authorized common shares from 75,000,000 shares par value        $0.001 to 450,000,000 shares par value $0.001. The financial statements have been        retroactively adjusted to reflect these stock splits.

 

F-7

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Notes to        Financial Statements

(Expressed        in U.S. Dollars)

**31 December 2007**

 

|   | **1.** | **Nature and Continuance of Operations -                        continued** |
|--------|--------|-----------------------------------------------------------------------------|

         

On 31 August 2007 the board of directors of the Company authorized a one to        2.5 forward split of all outstanding common shares and a corresponding forward increase in        the Company’s authorized common stock pursuant to Section 78.209 of the Nevada        Revised Statutes. The forward split and increase in authorized common stock was made        effective as of 11 September 2007. The effect of the forward split was to increase the        number of the Company’s common shares issued and outstanding from 16,140,000 to        40,350,000 and to increase the Company’s authorized common shares from 450,000,000        shares par value $0.001 to 1,125,000,000 shares par value $0.001. The financial statements        have been retroactively adjusted to reflect these stock splits.

         

Management cannot provide assurance that the Company will ultimately achieve        profitable operations or become cash flow positive, or raise additional debt and/or equity        capital. Management believes that the Company’s capital resources should be adequate        to continue operating and maintaining its business strategy during the fiscal year ending        2007. However, if the Company is unable to raise additional capital in the near future, due        to the Company’s liquidity problems, management expects that the Company will need to        curtail operations, liquidate assets, seek additional capital on less favorable terms        and/or pursue other remedial measures. These financial statements do not include any        adjustments related to the recoverability and classification of assets or the amounts and        classification of liabilities that might be necessary should the Company be unable to        continue as a going concern.

         

At 31 December 2007, the Company has suffered losses from development stage        activities to date. Although management is currently attempting to implement its business        plan, and is seeking additional sources of equity or debt financing, there is no assurance        these activities will be successful. Accordingly, the Company must rely on its president to        perform essential functions without compensation until a business operation can be        commenced. These factors raise substantial doubt about the ability of the Company to        continue as a going concern. The financial statements do not include any adjustments that        might result from the outcome of this uncertainty.

         

|   | **2.** | **Significant Accounting Policies** |
|--------|--------|-------------------------------------|

         

The following is a summary of significant accounting policies used in the        preparation of these financial statements.

         

**Basis of presentation**

         

The financial statements of the Company have been prepared in accordance        with accounting principles generally accepted in the United States of America applicable to        develpment stage companies, and are expressed in U.S. dollars. The Company’s fiscal        year end is 31 December.

         

**Cash and cash equivalents**

         

Cash and cash equivalents include highly liquid investments with original        maturities of six months or less.

         

F-8

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Notes to        Financial Statements

(Expressed        in U.S. Dollars)

**31 December 2007**

 

|   | **2.** | **Significant Accounting Policies -                        continued** |
|--------|--------|------------------------------------------------------------------------|

         

**Mineral property costs**

         

The Company was in the exploration stage since its formation from 13 May        2005 to 7 September 2007 and has not yet realized any revenues from its planned operations.        The Company abandoned its mineral property prior to 31 December 2007.

         

Mineral property acquisition costs are capitalized when incurred. In        accordance with Emerging Task Force Issue 04-02, such costs are classified as tangible        assets and are evaluated for impairment and written down as required.

         

Mineral property exploration costs are charged to operations as incurred.        When it has been determined that a mineral property can be economically developed as a        result of establishing proven and probable reserves, the costs incurred to develop such        property, are capitalized. Such costs will be amortized using the units-of-production        method over the estimated life of the probable reserve.

         

Although the Company will take steps to verify title to mineral properties        in which it has an interest, according to the usual industry standards for the stage of        exploration of such properties, these procedures do not guarantee the Company’s        title. Such properties may be subject to prior agreements or transfers and title may be        affected by undetected defects.

         

**Reclamation costs**

         

The Company’s policy for recording reclamation costs is to record a        liability for the estimated costs to reclaim mined land by recording charges to production        costs for each tonne of ore mined over the life of the mine. The amount charged is based on        management’s estimation of reclamation costs to be incurred. The accrued liability is        reduced as reclamation expenditures are made. Certain reclamation work is performed        concurrently with mining and these expenditures are charged to operations at that        time.

         

**Financial instruments**

         

The carrying value of cash, accounts payable and accrued liabilities, and        due to related party approximates their fair value because of the short maturity of these        instruments. The Company’s operations are in Canada and virtually all of its assets        and liabilities are giving rise to significant exposure to market risks from changes in        foreign currency rates. The Company’s financial risk is the risk that arises from        fluctuations in foreign exchange rates and the degree of volatility of these rates.        Currently, the Company does not use derivative instruments to reduce its exposure to        foreign currency risk.

         

**Derivative financial instruments**

         

The Company has not, to the date of these financial statements, entered into        derivative instruments to offset the impact of foreign currency fluctuations.

 

F-9

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Notes to        Financial Statements

(Expressed        in U.S. Dollars)

**31 December 2007**

 

|   | **2.** | **Significant Accounting Policies -                        continued** |
|--------|--------|------------------------------------------------------------------------|

         

**Environmental expenditures**

         

The operations of the Company have been, and may in the future be, affected        from time to time, in varying degrees, by changes in environmental regulations, including        those for future reclamation and site restoration costs. Both the likelihood of new        regulations and their overall effect upon the Company vary greatly and are not predictable.        The Company’s policy is to meet or, if possible, surpass standards set by relevant        legislation, by application of technically proven and economically feasible        measures.

         

Environmental expenditures that relate to ongoing environmental and        reclamation programs are charged against earnings as incurred or capitalized and amortized        depending on their future economic benefits. Estimated future reclamation and site        restoration costs, when the ultimate liability is reasonably determinable, are charged        against earnings over the estimated remaining life of the related business operation, net        of expected recoveries.

         

**Income taxes**

         

Deferred income taxes are reported for timing differences between items of        income or expense reported in the financial statements and those reported for income tax        purposes in accordance with SFAS No. 109, “*Accounting for        Income Taxes*”, which requires the use of the        asset/liability method of accounting for income taxes. Deferred income taxes and tax        benefits are recognized for the future tax consequences attributable to differences between        the financial statement carrying amounts of existing assets and liabilities and their        respective tax bases, and for tax losses and credit carry-forwards. Deferred tax assets and        liabilities are measured using enacted tax rates expected to apply to taxable income in the        years in which those temporary differences are expected to be recovered or settled. The        Company provides for deferred taxes for the estimated future tax effects attributable to        temporary differences and carry forwards when realization is more likely than        not.

         

**Basic and diluted net loss per share**

         

The Company computes net loss per share in accordance with SFAS No. 128,        “*Earnings per Share*”. SFAS        No. 128 requires presentation of both basic and diluted earnings per share        (“EPS”) on the face of the income statement. Basic EPS is computed by dividing        net loss available to common shareholders (numerator) by the weighted average number of        shares outstanding (denominator) during the period. Diluted EPS gives effect to all        potentially dilutive common shares outstanding during the period using the treasury stock        method and convertible preferred stock using the if-converted method. In computing diluted        EPS, the average stock price for the period is used in determining the number of shares        assumed to be purchased from the exercise of stock options or warrants. Diluted EPS        excludes all potentially dilutive shares if their effect is anti-dilutive.

         

F-10

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Notes to        Financial Statements

(Expressed        in U.S. Dollars)

**31 December 2007**

 

**2.**   **Significant Accounting Policies - continued**

         

**Comprehensive loss**

         

SFAS No. 130, “*Reporting Comprehensive        Income*”, establishes standards for the reporting and        display of comprehensive loss and its components in the financial statements. As at 31        December 2007, the Company has no items that represent a comprehensive loss and, therefore,        has not included a schedule of comprehensive loss in the financial statements.

         

**Segments of an enterprise and related information**

         

SFAS No. 131, “*Disclosures about Segments of        an Enterprise and Related Information*”, supersedes SFAS No.        14, “*Financial Reporting for Segments of a Business        Enterprise*”. SFAS 131 establishes standards for the way        that public companies report information about operating segments in annual financial        statements and requires reporting of selected information about operating segments in        interim financial statements issued to the public. It also establishes standards for        disclosures regarding products and services, geographic areas and major customers. SFAS 131        defines operating segments as components of a company about which separate financial        information is available that is evaluated regularly by the chief operating decision maker        in deciding how to allocate resources and in assessing performance. The Company has        evaluated this SFAS and does not believe it is applicable at this time.

         

**Start-up expenses**

         

The Company has adopted Statement of Position No. 98-5,        “*Reporting the Costs of Start-up        Activities*”, which requires that costs associated with        start-up activities be expensed as incurred.  Accordingly, start-up costs associated        with the Company's formation have been included in the Company's general and administrative        expenses for the period from the date of inception on 13 May 2005 to 31 December        2007.

         

**Foreign currency translation**

         

The Company’s functional and reporting currency is in U.S. dollars.        The financial statements of the Company are translated to U.S. dollars in accordance with        SFAS No. 52, “*Foreign Currency        Translation*”. Monetary assets and liabilities denominated        in foreign currencies are translated using the exchange rate prevailing at the balance        sheet date. Gains and losses arising on translation or settlement of foreign currency        denominated transactions or balances are included in the determination of income. The        Company has not, to the date of these financial statements, entered into derivative        instruments to offset the impact of foreign currency fluctuations.

         

         

         

         

F-11

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Notes to        Financial Statements

(Expressed        in U.S. Dollars)

**31 December 2007**

 

|   | **2.** | **Significant Accounting Policies -                        continued** |
|--------|--------|------------------------------------------------------------------------|

         

**Use of estimates**

         

The preparation of financial statements in conformity with accounting        principles generally accepted in the United States of America requires management to make        estimates and assumptions that affect the amounts of assets and liabilities and disclosures        of contingent assets and liabilities at the date of the financial statements and the        reported amounts of revenues and expenditures during the reporting period. Actual results        could differ from these estimates.

         

**Stock-Based Compensation**

         

Effective January 1, 2006, the Company adopted the provisions of SFAS No.        123(R), “Share-Based Payment”, which establishes accounting for equity        instruments exchanged for employee services. Under the provisions of SFAS 123(R),        stock-based compensation cost is measured at the grant date, based on the calculated fair        value of the award, and is recognized as an expense over the employees’ requisite        service period (generally the vesting period of the equity grant). Before January 1, 2006,        the Company accounted for stock-based compensation to employees in accordance with        Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to        Employees,” and complied with the disclosure requirements of SFAS No. 123,        “Accounting for Stock-Based Compensation”.  The Company adopted FAS 123(R)        using the modified prospective method, which requires the Company to record compensation        expense over the vesting period for all awards granted after the date of adoption, and for        the unvested portion of previously granted awards that remain outstanding at the date of        adoption.  Accordingly, financial statements for the periods prior to January 1, 2006        have not been restated to reflect the fair value method of expensing share-based        compensation.  Adoption of SFAS No. 123(R) does not change the way the Company        accounts for share-based payments to non-employees, with guidance provided by SFAS 123 (as        originally issued) and Emerging Issues Task Force Issue No. 96-18, “Accounting for        Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction        with Selling, Goods or Services”.

         

**Recent accounting pronouncements**

         

In February 2007, the Financial Accounting Standards Board (the        “FASB”) issued SFAS No. 159, “The Fair Value Option for Financial Assets        and Financial Liabilities” (SFAS 159).  SFAS 159 allows the company to choose to        measure many financial assets and financial liabilities at fair value.  Unrealized        gains and losses on items for which the fair value option has been elected are reported in        earnings.  SFAS 159 is effective for fiscal years beginning after November 15,        2007.  The Company is currently evaluating the requirements of SFAS 159 and the        potential impact on the Company’s financial statements.

         

         

         

 

F-12

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Notes to        Financial Statements

(Expressed        in U.S. Dollars)

**31 December 2007**

 

|   | **2.** | **Significant Accounting Policies -                        continued** |
|--------|--------|------------------------------------------------------------------------|

         

**Recent accounting pronouncements - continued**

         

In September 2006, the Financial Accounting Standards Board (the        “FASB”) issued SFAS No. 158, “Employers’ Accounting for Defined        Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements No.        87, 88, 106 and 132(R)” (SFAS 158”). SFAS 158 requires an employer that        sponsors one or more single-employer defined benefit plans to (a) recognize the overfunded        or underfunded status of a benefit plan in its statement of financial position, (b)        recognize as a component of other comprehensive income, net of tax, the gains or losses and        prior service costs or credits that arise during the period but are not recognized as        components of net periodic benefit cost pursuant to SFAS 87, “Employers’        Accounting for Pensions”, or SFAS 106, “Employers’ Accounting for        Postretirement Benefits Other Than Pensions”, (c) measure defined benefit plan assets        and obligations as of the date of the employer’s fiscal year-end, and (d) disclose in        the notes to financial statements additional information about certain effects on net        periodic benefit cost for the next fiscal year that arise from delayed recognition of the        gains or losses, prior service costs or credits, and transition asset or obligation. SFAS        158 is effective for the Company’s fiscal year ending December 31, 2007. The Company        is currently reviewing the impact of this statement.

         

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurement"        ("SFAS 157"). The Statement provides guidance for using fair value to measure assets and        liabilities. The Statement also expands disclosures about the extent to which companies        measure assets and liabilities at fair value, the information used to measure fair value,        and the effect of fair value measurement on earnings. This Statement applies under other        accounting pronouncements that require or permit fair value measurements. This Statement        does not expand the use of fair value measurements in any new circumstances. Under this        Statement, fair value refers to the price that would be received to sell an asset or paid        to transfer a liability in an orderly transaction between market participants in the market        in which the entity transacts. SFAS 157 is effective for the Company for fair value        measurements and disclosures made by the Company in its fiscal year beginning on January 1,        2008. The Company is currently reviewing the impact of this statement.

         

In March 2006, the FASB issued SFAS No. 156,        “*Accounting for Servicing of Financial        Assets*”, which amends SFAS No. 140        “*Accounting for Transfers and Servicing of Financial Assets        and Extinguishments of Liabilities*”. SFAS No. 156 may be        adopted as early as 1 January 2006, for calendar year-end entities, provided that no        interim financial statements have been issued. Those not choosing to early adopt are        required to apply the provisions as of the beginning of the first fiscal year that begins        after 15 September 2006 (e.g. 1 January 2007, for calendar year-end entities).  The        intention of the new statement is to simplify accounting for separately recognized        servicing assets and liabilities, such as those common with mortgage securitization        activities, as well as to simplify efforts to obtain hedge-like accounting.         Specifically, the FASB said SFAS No. 156 permits a service using derivative financial        instruments to report both the derivative financial instrument and related servicing asset        or liability by using a consistent measurement attribute, or fair value.  The adoption        of SFAS No. 156 is not expected to have a material impact on the Company’s        financial position, results of operations or cash flows.

         

F-13

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Notes to        Financial Statements

(Expressed        in U.S. Dollars)

**31 December 2007**

 

|   | **2.** | **Significant Accounting Policies -                        continued** |
|--------|--------|------------------------------------------------------------------------|

         

**Recent accounting pronouncements - continued**

         

In February 2006, the FASB issued SFAS No. 155,        “*Accounting for Certain Hybrid Financial        Instruments*”, which amends SFAS No. 133,        “*Accounting for Derivative Instruments and Hedging        Activities*” and SFAS No. 140. SFAS No. 155        permits fair value measurement for any hybrid financial instrument that contains an        embedded derivative that otherwise would require bifurcation, establishes a requirement to        evaluate interests in securitized financial assets to identify interests that are        freestanding derivatives or hybrid financial instruments containing embedded derivatives.        The adoption of SFAS No. 155 is not expected to have a material impact on the        Company’s financial position, results of operations or cash flows.

         

|   | **3.** | **Mineral Property** |
|--------|--------|----------------------|

         

During the year ended 31 December 2006, the Company acquired a 100% interest        in a mineral property located in the Greenwood Mining Division, British Columbia (the        “Gold Bug Property”) from a director (the “Director”) and        shareholder of the Company for proceeds of 13,500,000 common shares of the Company valued        at $9,000 (Note 9 and 12). In October 2006, the Company commenced the “Phase 1A        Exploration Program” on the Gold Bug Property. Exploration expenditures for the year        ended 31 December 2006 on the Gold Bug Property total $5,230 and consist of consulting,        geology and engineering, and travel of $2,550, $2,005 and $675 respectively.

         

In April 2007, the Company received unfavorable results related to the Phase        1A Exploration Program and subsequently abandoned the Gold Bug Property. The Company        incurred mineral property exploration costs of $1,002 on the Gold Bug Property during the        year ended 31 December 2007. This exploration work was undertaken by the Director of the        Company and the $1,002 owed to the Director by the Company related to these services was        settled by return of the abandoned Gold Bug Property to the Director (Note 7).

 

 

 

 

 

 

 

 

 

F-14

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Notes to        Financial Statements

(Expressed        in U.S. Dollars)

**31 December 2007**

 

| **4.** | **Loans Receivable** |
|--------|----------------------|

         

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | §        **As at 31                        December**

**2007** |   | **As at 31 December 2006** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|--------|----------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | **$**                                                                                                   |   | **$**                      |
| Loan receivable bearing interest at a rate of 10% per annum                        on any unpaid principle balance, secured by a general charge on the assets                        of the payee and is repayable in full on 31 December 2007. The balance of                        $1,001,096 outstanding at 31 December 2007 (31 December 2006 - $Nil)                        consists of principle $975,000 and unpaid accrued interest of $26,096 (31                        December 2006 – $Nil). On 7 September 2007, the Company entered into                        a bridge loan agreement with CypherEdge Technologies Inc. (the                        “borrower”). Under the terms of this loan agreement, the                        Company is committed to lending principal of up to $1,000,000 at the option                        of the borrower (Notes 11 and 13). This loan receivable was not paid at 31                        December 2007 and was in default. |   | 1,001,096                                                                                               |   | -                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                                                    |   |                       |
| Loan receivable bearing interest at a rate of 10% per annum                        on any unpaid principal balance, unsecured, and is repayable in full on or                        before 16 November 2008. The balance of $101,233 at 31 December 2007 (31                        December 2006 - $Nil) consists of principle of $100,000 and unpaid accrued                        interest of $1,233 (31 December 2006 - $Nil). On 16 November 2007, the                        Company entered into a loan agreement with Trustcash Holdings                        Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 101,233                                                                                                 |   | -                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                                                    |   |                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 1,102,329                                                                                               |   | -                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                                                    |   |                       |
| Provision for write-down of loans receivable (Notes 11 and                        13)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | (1,001,096)                                                                                             |   | -                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                                                    |   |                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 101,233                                                                                                 |   | -                          |

         

| **5.** | **Accounts Payable and Accrued Liabilities** |
|--------|----------------------------------------------|

         

Accounts payable and accrued liabilities are non-interest bearing, unsecured        and have settlement dates within one year.

 

| **6.** | **Due to Related Party** |
|--------|--------------------------|

         

As at 31 December 2007, the amount due to related party consists of $2,500        (31 December 2006 - $Nil) payable to a director of the Company. This balance is        non-interest bearing, unsecured and has no fixed terms of repayment.

         

         

 

F-15

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Notes to        Financial Statements

(Expressed        in U.S. Dollars)

**31 December 2007**

 

         

| **7.** | **Related Party Transactions** |
|--------|--------------------------------|

         

During the year ended 31 December 2007, 750,000 shares were issued to a        director and officer of the Company as incentive for joining the Board of Directors. These        shares were valued at $2,500 and have been recorded as an increase in non-cash management        fee expenditures and an increase in common stock and additional paid-in capital (Note 9 and        12).

         

During the year ended 31 December 2007, an officer, director and shareholder        of the Company made contributions to capital for management fees and rent of $9,300 (31        December 2006 - $6,800, cumulative - $16,100) and $1,200 (31 December 2006 - $1,200,        cumulative - $2,400) respectively (Notes 9 and 12). These amounts have been recorded as an        increase in expenditures and an increase in additional paid-in capital.

         

During the year ended 31 December 2006, the Company acquired an interest in        the Gold Bug Property from a director and shareholder of the Company. During the year ended        31 December 2007, this interest was returned to this director and shareholder as settlement        of a balance of $1,002 owed to this director by the Company (Notes**Error! Reference source not found.**, 9 and        12).

 

| **8.** | **Loans Payable** |
|--------|-------------------|

 

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | §        **As at 31                        December**

**2007** |   | **As at 31 December 2006** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|--------|----------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | **$**                                                                                                   |   | **$**                      |
| Loan payable bearing interest at a rate of 10% per annum on                        any unpaid principal balance and is due and payable on or before 16                        November 2008. The loan payable is secured by a general charge on the                        assets of the Company. The balance of $101,233 at 31 December 2007 (31                        December 2006 - $Nil) consists of principle of $100,000 and unpaid accrued                        interest of $1,233 (31 December 2006 - $Nil). On 16 November 2007, the                        Company entered into a loan agreement with Ludwig Holdings Ltd. |   | 101,233                                                                                                 |   | -                          |

 

 

| **9.** | **Capital Stock** |
|--------|-------------------|

 

**Authorized**

         

The total authorized capital is 1,125,000,000 common shares with a par value        of $0.001 per common share.

         

         

 

F-16

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Notes to        Financial Statements

(Expressed        in U.S. Dollars)

**31 December 2007**

 

         

| **9.** | **Capital Stock – continued** |
|--------|-------------------------------------|

         

**Issued****and outstanding**

         

The total issued and outstanding capital stock is 40,350,000 common shares        with a par value of $0.001 per common share.

         

|   | i. | On 9 February 2006, the Company issued 13,500,000 common                        shares valued at $0.001 per share for the acquisition of a mineral property                        (Notes, 7 and 12). |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ii. | On 20 September 2006, 30,000,000 Units (the                        “Units”) of the Company were issued for cash proceeds of                        $100,000. Each Unit consists of one common share of the Company and two                        share purchase warrants. Each share purchase warrant entitles the holder to                        purchase an additional common share of the Company at a price of $0.04 per                        common share expiring 19 September 2008 (Note 9). |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | iii. | On 9 February 2007, the Company chose to offer a rescission                        to shareholders who were not accredited investors. In total, 17,400,000                        shares valued at $58,000 and 34,800,000 warrants were rescinded and the                        cash was repaid to those shareholders. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | iv. | On 2 May 2007 the board of directors of the Company                        authorized a one to six forward split of all outstanding common shares and                        a corresponding forward increase in the Company’s authorized common                        stock pursuant to Section 78.209 of the Nevada Revised Statutes. The                        forward split and increase in authorized common stock was made effective as                        of 1 June 2007. The effect of the forward split was to increase the number                        of the Company’s common shares issued and outstanding from 2,690,000                        to 16,140,000 and to increase the Company’s authorized common shares                        from 75,000,000 shares par value $0.001 to 450,000,000 shares par value                        $0.001. The financial statements have been retroactively adjusted to                        reflect these stock splits. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | v. | On 31 August 2007 the board of directors of the Company                        authorized a one to 2.5 forward split of all outstanding common shares and                        a corresponding forward increase in the Company’s authorized common                        stock pursuant to Section 78.209 of the Nevada Revised Statutes. The                        forward split and increase in authorized common stock was made effective as                        of 11 September 2007. The effect of the forward split was to increase the                        number of the Company’s common shares issued and outstanding from                        16,140,000 to 40,350,000 and to increase the Company’s authorized                        common shares from 450,000,000 shares par value $0.001 to 1,125,000,000                        shares par value $0.001. The financial statements have been retroactively                        adjusted to reflect these stock splits. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | vi. | On 10 September 2007, the Company cancelled 19,800,000                        outstanding warrants. |
|--------|-----|-----------------------------------------------------------------------------------------------------|

|   | vii. | During the year ended 31 December 2007, an officer, director                        and shareholder of the Company made contributions to capital by the payment                        of the Company’s expenses (Notes 7 and 12). |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | viii. | During the year ended 31 December 2007, 750,000 shares were                        issued to a director and officer of the Company as incentive for joining                        the Board of Directors. These shares were valued at $2,500 and have been                        recorded as an increase in non-cash management fee expenditures and an                        increase in common stock and additional paid-in capital (Notes 7 and                        12). |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

F-17

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Notes to        Financial Statements

(Expressed        in U.S. Dollars)

**31 December 2007**

 

 

| **9.** | **Capital Stock – continued** |
|--------|-------------------------------------|

 

**Share subscriptions received in advance**

         

On 4 September 2007, the Company received $1,000,000 as payment for a share        subscription for 2,000,000 shares at a price of $0.50. As at 31 December 2007, the common        shares related to this subscription have not yet been issued.

         

**Warrants**

         

The following share purchase warrants were outstanding at 31 December        2007:

         

|     |   |  

**Exercise price** |   |  

**Number**

**of warrants** |   | **Remaining**

**contractual life (years)** |
|----------|--------|----------------------------|--------|-------------------------------------|--------|---------------------------------------------|
|     |   | **$**                      |   |                                |   |                                        |
|     |   |                       |   |                                |   |                                        |
| Warrants |   | 0.04                       |   | 5,400,000                           |   | 0.80                                        |

         

The following is a summary of warrant activities during the year ended 31        December 2007 and 2006:

         

|                                                                                   |   | **Number of warrants** |   | **Weighted average exercise price** |
|----------------------------------------------------------------------------------------|--------|------------------------|--------|-------------------------------------|
|                                                                                   |   |                   |   | **$**                               |
|                                                                                   |   |                   |   |                                |
| Outstanding and exercisable at 1 January 2007                                          |   | 60,000,000             |   | 0.04                                |
| Granted                                                                                |   | -                      |   | -                                   |
| Exercised                                                                              |   | -                      |   | -                                   |
| Expired                                                                                |   | -                      |   | -                                   |
| Rescinded                                                                              |   | (54,600,000)           |   | 0.04                                |
|                                                                                   |   |                   |   |                                |
| Outstanding and exercisable at 31 December 2007                                        |   | 5,400,000              |   | 0.04                                |
|                                                                                   |   |                   |   |                                |
| Weighted average fair value of warrants granted during the                        year |   |                   |   | -                                   |
|                                                                                   |   |                   |   |                                |
| Outstanding and exercisable at 1 January 2006                                          |   | -                      |   | -                                   |
| Granted                                                                                |   | 60,000,000             |   | 0.10                                |
| Exercised                                                                              |   | -                      |   | -                                   |
| Expired                                                                                |   | -                      |   | -                                   |
| Rescinded                                                                              |   | -                      |   | -                                   |
|                                                                                   |   |                   |   |                                |
| Outstanding and exercisable at 31 December 2006                                        |   | 60,000,000             |   | 0.10                                |

 

 

F-18

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Notes to        Financial Statements

(Expressed        in U.S. Dollars)

**31 December 2007**

 

 

|                                                                                   |   |   |   |     |
|----------------------------------------------------------------------------------------|--------|--------|--------|----------|
| Weighted average fair value of warrants granted during the                        year |   |   |   | 0.000002 |

| **9.** | **Capital Stock – continued** |
|--------|-------------------------------------|

 

|   | **Warrants** |
|--------|--------------|

 

The weighted average grant date fair value of warrants issued during the        year ended 31 December 2007 is $Nil per warrant (31 December 2006 - $0.000002 per warrant).        The fair value of each warrant granted was determined using the Black-Scholes option        pricing model and the following weighted average assumptions:

 

|                    |   |   | **31 December 2007** |   | **31 December 2006** |
|-------------------------|--------|--------|----------------------|--------|----------------------|
|                    |   |   |                 |   |                 |
| Risk free interest rate |   |   | -                    |   | 4.81%                |
| Expected life           |   |   | -                    |   | 2 years              |
| Annualized volatility   |   |   | -                    |   | 101%                 |
| Expected dividends      |   |   | -                    |   | 0%                   |

         

Because the shares of the Company have not begun trading on any recognized        stock exchange, there is no trading history to establish the expected volatility. The        Company has used the average volatility for two companies in the same industry or        considered to be comparable.

         

Option pricing models require the input of highly subjective assumptions        including the estimate of the share price volatility. Changes in the subjective input        assumptions can materially affect the fair value estimate, and therefore, the existing        models do not necessarily provide a reliable single measure of the fair value of the        Company’s stock options.

         

| **10.** | **Income Taxes** |
|---------|------------------|

         

The Company has losses carried forward for income tax purposes to 31        December 2007. There are no current or deferred tax expenses for the year ended 31 December        2007 due to the Company’s loss position. The Company has fully reserved for any        benefits of these losses. The deferred tax consequences of temporary differences in        reporting items for financial statement and income tax purposes are recognized, as        appropriate. Realization of the future tax benefits related to the deferred tax assets is        dependent on many factors, including the Company’s ability to generate taxable income        within the net operating loss carry forward period. Management has considered these factors        in reaching its conclusion as to the valuation allowance for financial reporting        purposes.

         

         

         

 

F-19

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Notes to        Financial Statements

(Expressed        in U.S. Dollars)

**31 December 2007**

 

         

         

| **10.** | **Income Taxes - continued** |
|---------|------------------------------|

         

The provision for refundable federal income tax consists of the        following:

         

|                                                                              |   | **For the year ended 31 December**

**2007** |   | **For the year ended 31 December**

**2006** |
|-----------------------------------------------------------------------------------|--------|----------------------------------------------|--------|----------------------------------------------|
|                                                                              |   | **$**                                        |   | **$**                                        |
|                                                                              |   |                                         |   |                                         |
| Deferred tax asset attributable to:                                               |   |                                         |   |                                         |
| Current operations                                                                |   | 352,477                                      |   | 17,599                                       |
| Contributions to capital by related party –                        expenses |   | (3,570)                                      |   | (2,720)                                      |
| Less: Change in valuation allowance                                               |   | (348,907)                                    |   | (14,879)                                     |
|                                                                              |   |                                         |   |                                         |
| Net refundable amount                                                             |   | -                                            |   | -                                            |

         

The composition of the Company’s deferred tax assets as at 31 December        2007 and 31 December 2006 are as follows:

         

|                                        |   | **31 December**

**2007** |   | **31 December 2006** |
|---------------------------------------------|--------|---------------------------|--------|----------------------|
|                                        |   | **$**                     |   | **$**                |
|                                        |   |                      |   |                 |
| Net income tax operating loss carry forward |   | (1,075,732)               |   | (49,534)             |
|                                        |   |                      |   |                 |
| Statutory federal income tax rate           |   | 34%                       |   | 34%                  |
| Effective income tax rate                   |   | 0%                        |   | 0%                   |
|                                        |   |                      |   |                 |
| Deferred tax assets                         |   | 365,749                   |   | 16,842               |
| Less: Valuation allowance                   |   | (365,749)                 |   | (16,842)             |
|                                        |   |                      |   |                 |
| Net deferred tax asset                      |   | -                         |   | -                    |

 

The potential income tax benefit of these losses has been offset by a full        valuation allowance.

         

As at 31 December 2007, the Company has an unused net operating loss carry        forward balance of approximately $1,075,732 that is available to offset future taxable        income. This unused net operating loss carry forward balance for income tax purposes        expires between the years 2026 and 2027.

 

 

F-20

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Notes to        Financial Statements

(Expressed        in U.S. Dollars)

**31 December 2007**

 

 

 

| **11.** | **Commitments** |
|---------|-----------------|

         

|   | i. | On 7 September 2007, the Company entered into a purchase                        agreement with CypherEdge Technologies, Inc. (“CypherEdge”),                        whereby the Company has the right to acquire all of the issued and                        outstanding common shares of CypherEdge in consideration for the issuance                        of 83,000,000 common shares of the Company to the stockholders of                        CypherEdge. Under the terms of the purchase agreement, the closing of the                        acquisition is to take place no later than December 31, 2007. This                        transaction was not completed by 31 December 2007 (Note 11(ii)). |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

|   | ii. | On 7 September 2007, the Company entered into a bridge loan                        agreement with CypherEdge whereby the Company is to provide a bridging loan                        of up to $1,000,000 to CypherEdge repayable in full by 31 December 2007. At                        31 December 2007, the Company had advanced $975,000 related to this loan                        agreement and the required repayment of the full amount of the loan had not                        been completed. The Company has recorded a provision for write-down of                        $1,001,096 on this loan receivable (principle $975,000 and accrued interest                        $26,096) and is pursuing all legal remedies available to the Company to                        obtain repayment (Notes 4 and 13). |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

| **12.** | **Supplemental Disclosures with Respect to Cash                        Flows** |
|---------|--------------------------------------------------------------------------------|

 

|                                       |   | **For the period from the date of inception on 13 May 2005                        to 31 December**

**2007** |   | **For the year ended 31 December**

**2007** |   | **For the year ended 31 December**

**2006** |
|--------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|--------|----------------------------------------------|
|                                       |   | **$**                                                                                                        |   |                                         |   | **$**                                        |
|                                       |   |                                                                                                         |   |                                         |   |                                         |
| Cash paid during the year for interest     |   | -                                                                                                            |   | -                                            |   | -                                            |
| Cash paid during the year for income taxes |   | -                                                                                                            |   | -                                            |   | -                                            |

         

During the year ended 31 December 2007, 750,000 shares were issued to a        director and officer of the Company as incentive for joining the Board of Directors. These        shares were valued at $2,500 and have been recorded as an increase in non-cash management        fee expenditures and an increase in common stock and additional paid-in capital (Notes 7        and 9).

 

During the year ended 31 December 2007, an officer, director and shareholder        of the Company made contributions to capital for management fees and rent of $9,300 (31        December 2006 - $6,800, cumulative - $16,100) and $1,200 (31 December 2006 - $1,200,        cumulative - $2,400) respectively (Notes 7 and 9).

         

During the year ended 31 December 2007, the Company settled accounts payable        debts of $1,002 to a director and shareholder of the Company by transferring its interest        in the Gold Bug Property to the director and shareholder (Notes 3 and 7).

 

F-21

 

----

 

**Mistral Ventures, Inc.**

**(A        Development Stage Company)**

Notes to        Financial Statements

(Expressed        in U.S. Dollars)

**31 December 2007**

 

         

During the year ended 31 December 2006, the Company issued 13,500,000 common        shares valued at $9,000 for the acquisition of Gold Bug Property (Notes 7 and        9).

 

| **13.** | **Contingency** |
|---------|-----------------|

         

The Company’s loan receivable of $1,001,096 (principle $975,000 and        accrued interest $26,096) to CypherEdge was not repaid in full on 31 December 2007 and the        loan receivable is in default. The Company is pursuing all legal actions available to        recover the outstanding amount (Notes 4 and 11).

         

| **14.** | **Subsequent Event** |
|---------|----------------------|

         

On 30 January 2008, the Company entered into a Binding Term Sheet ("Term        Sheet") with Trustcash Holdings, Inc. ("Trustcash") and Paivis, Corp. ("Paivis") whereby        the Company agreed to finance on a best efforts basis a minimum of $2,000,000 but no more        than $7,000,000 towards the financing required by Trustcash under a Definitive Agreement        and Plan of Merger (the "Merger") between Trustcash and Paivis. The Company further agreed        in the Term Sheet to provide interim financing to both Paivis and Trustcash to cover the        costs of the Merger and miscellaneous working capital at a minimum level of $150,000        combined. The Company and Trustcash have a director and shareholder in common.

         

F-22

 

----

 

| **ITEM 9.** | **CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON                        ACCOUNTING AND FINANCIAL DISCLOSURE** |
|-------------|-----------------------------------------------------------------------------------------------------------------|

 

None.

 

| **ITEM 9A.** | **CONTROLS AND PROCEDURES (ITEM 9A(T))** |
|--------------|------------------------------------------|

 

**Management's Annual Report on Internal Control over Financial        Reporting**

 

The        Company’s management, including our chief executive officer and chief financial        officer, is responsible for establishing and maintaining adequate internal control over our        financial reporting. Internal control over financial reporting is a process designed by, or        under the supervision of, our chief executive and chief financial officers and implemented        by our board of directors, management and other personnel, to provide reasonable assurance        regarding the reliability of financial reporting and the preparation of financial        statements for external purposes in accordance with generally accepted accounting        principles and includes those policies and procedures that: (i) pertain to the        maintenance of records that, in reasonable detail, accurately and fairly reflect the        transactions and dispositions of our assets; (ii) provide reasonable assurance that        transactions are recorded as necessary to permit preparation of financial statements in        accordance with generally accepted accounting principles, and that our receipts and        expenditures are being made only in accordance with authorizations of our management and        directors; and (iii) provide reasonable assurance regarding prevention or timely        detection of unauthorized acquisition, use or disposition of our assets that could have a        material effect on the financial statements. Because of their inherent limitations,        internal control over financial reporting may not prevent or detect misstatements. Also,        projections of any evaluation of effectiveness to future periods are subject to the risk        that controls may become inadequate because of changes in conditions, or that the degree of        compliance with the policies or procedures may deteriorate.

 

Under the        supervision and with the participation of our management, including our principal executive        officer and principal financial officer, we conducted an evaluation of the effectiveness of        our internal control over financial reporting based on the framework in*Internal Control* *— Integrated Framework*issued by the        Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation,        our management concluded that our internal control over financial reporting was effective        as of December 31, 2007.

 

This annual        report does not include an attestation report of our 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        Commission that permit us to provide only the management’s report in this Form        10-K.

 

**Changes in Internal Controls over Financial Reporting**

 

During the        period ended December 31, 2007, there has been no change in internal control over financial        reporting that has materially affected, or is reasonably likely to materially affect our        internal control over financial reporting.

 

| **9B.** | **OTHER INFORMATION** |
|---------|-----------------------|

 

None.

 

 

17

 

----

 

**PART        III**

 

| **ITEM 10.** | **DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE                        GOVERNANCE** |
|--------------|------------------------------------------------------------------------------------|

 

**Officers and Directors**

 

The        following table sets forth the name, age and position of each director and executive        officer of the Company:

 

| ***Name***                                                          | ***Age***                                      | ***Year***

***Elected/Appointed***                | ***Positions Held***                                                                                             |
|---------------------------------------------------------------------|------------------------------------------------|----------------------------------------------------|------------------------------------------------------------------------------------------------------------------|
|  

John Xinos

                         

Kent Carasquero |  

40

                         

41 |  

1998

                         

2007 |  

CEO and director

                         

CFO, PAO, and director

                          |

 

***John        Xinos***has been the chief executive officer and director of        the Company since inception on May 13, 2005. Mr. Xinos was the chief financial officer and        principal accounting officer from inception to March 28, 2007.

 

For the        past 7 years, Mr. Xinos has been the owner and president of two private companies –        Pine Street Investments and Fir Street Investments - which are solely involved in the        purchase and/or rental or sale of real estate within British Columbia. Mr. Xinos has        studied business management at the University of British Columbia although has not        registered for the final year required to complete a degree. Mr. Xinos holds a Free Miner's        Certificate and has registered for a BCeID (British Columbia electronic Identification).        Mr. Xinos currently devotes approximately 5-7 hours per week to our business.

 

Mr. Xinos        has not been an officer or director of any other companies in the past five        years.

 

***Kent        Carasquero***has been the chief financial officer, principal        accounting officer and director of the Company since March 28, 2007.

 

Since 2002,        Mr. Carasquero has been the president of Tyee Capital Consultants, Inc., a private company        involved in assisting publicly and privately held corporations in all major industry groups        with structuring, marketing, investor communications, equity, and debt raising activities.        Mr. Carasquero holds an Advanced BA in Economics from the University of        Manitoba.

 

Mr.        Carasquero has served as interim president and chief financial officer of Trustcash        Holdings, Inc. since February 12, 2008. He has served as a director of Trustcash Holdings,        Inc. since January 21, 2005. He served as Trustcash Holdings, Inc.’s sole executive        officer from January 21, 2005 until June 30, 2007. Mr. Carasquero served as an officer and        director of Intrepid Global 3D Imaging, Inc. from April of 2004 until September of 2004        (formerly “Delta Capital Technologies, Inc.”) and American Unity Investments,        Inc. from February of 2004 until March of 2005 (formerly “Capital Hill Gold,        Inc.”).

 

No other        persons are expected to make any significant contributions to the Company’s executive        decisions who are not executive officers or directors of the Company.

 

 

 

18

 

----

 

***Term        of Office***

 

Our        directors are appointed for a one (1) year term to hold office until the next annual        meeting of our shareholders or until removed from office in accordance with our bylaws. Our        executive officers are appointed by our Board of Directors and hold office until removed by        the board.

 

***Family Relationships***

 

There are        no family relationships between or among the directors or executive officers

 

***Director Independence***

 

The Company        is listed on the OTC Bulletin Board inter-dealer quotation system, which does not have        director independence requirements. However, for purposes of determining director        independence, we have applied the definitions set out in NASDAQ Rule 4200(a)(15). NASDAQ        Rule 4200(a)(15) states that a director is not considered to be independent if he or she is        also an executive officer or employee of the corporation. Accordingly, we do not have any        independent directors.

 

***Involvement in Certain Legal Proceedings***

 

To the best        of our knowledge, during the past five years, none of the following occurred with respect        to a present or former director, executive officer, or employee: (1) any bankruptcy        petition filed by or against any business of which such person was a general partner or        executive officer either at the time of the bankruptcy or within two years prior to that        time; (2) any conviction in a criminal proceeding or being subject to a pending criminal        proceeding (excluding traffic violations and other minor offences); (3) being subject to        any order, judgment or decree, not subsequently reversed, suspended or vacated, of any        court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending        or otherwise limiting his or her involvement in any type of business, securities or banking        activities; and (4) being found by a court of competent jurisdiction (in a civil action),        the Commission or the Commodities Futures Trading Commission to have violated a federal or        state securities or commodities law, and the judgment has not been reversed, suspended or        vacated.

 

**Compliance with Section 16(A) of the Exchange Act**

 

Based        solely upon a review of Forms 3, 4 and 5 furnished to the Company, we are not aware of any        persons who, during the period ended December 31, 2007, failed to file, on a timely basis,        reports required by Section 16(a) of the Securities Exchange Act of 1934.

 

***Code        of Ethics***

 

The Company        has adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-B of the        Securities Exchange Act of 1934. The Code of Ethics applies to directors and senior        officers, such as the principal executive officer, principal financial officer, controller,        and persons performing similar functions. The Company has incorporated a copy of its Code        of Ethics as Exhibit 14 to this form 10-K. Further, our Code of Ethics is available in        print, at no charge, to any security holder who requests such information by contacting        us.

 

 

 

19

 

----

 

**Board        of Directors Committees**

 

The board        of directors has not established an audit committee. An audit committee typically reviews,        acts on and reports to the board of directors with respect to various auditing and        accounting matters, including the recommendations and performance of independent auditors,        the scope of the annual audits, fees to be paid to the independent auditors, and internal        accounting and financial control policies and procedures. Certain stock exchanges currently        require companies to adopt a formal written charter that establishes an audit committee        that specifies the scope of an audit committee’s responsibilities and the means by        which it carries out those responsibilities. In order to be listed on any of these        exchanges, the Company will be required to establish an audit committee.

 

The board        of directors has not established a compensation committee.

**Director Compensation**

 

Directors        currently are not reimbursed for out-of-pocket costs incurred in attending meetings nor are        they compensated for their service as directors. However, Kent Carasquero did receive        750,000 shares of our common stock as an incentive for joining out board of directors (see        the*Summary Compensation Table,*below).        The Company may adopt a provision for compensating directors for their services in the        future.

 

The        following table provides summary information for the year 2007 concerning cash and non-cash        compensation paid or accrued by the Company to or on behalf of our directors.

 

| ***Summary Compensation Table*** |
|----------------------------------|
|  

Name                     |  

Fees earned or paid in cash

($) |  

Stock awards

($) |  

Option

Awards

($) |  

Non-equity incentive plan compensation

($) |  

Nonqualified deferred compensation

($) |  

All other compensation

($)

                          |  

Total

($) |
|  

Kent Carasquero          |  

- |  

2,500

                          |  

-

                          |  

-

                          |  

-

                          |  

-

                          |  

2,500 |

 

| **ITEM 11.** | **EXECUTIVE COMPENSATION** |
|--------------|----------------------------|

 

**Compensation Discussion and Analysis**

 

Since the        Company remains in the development stage it does not offer any form of compensation plan to        its executive officers. While we have deemed that this approach to compensation        arrangements is satisfactory for the time being and is appropriately suited for our        objectives, we do intend to establish a compensation program in the future in the event        that revenue producing operations can be sustained and consideration is given to any future        employees. Elements of future compensation packages may include salaries, options and other        compensatory elements.

 

**Tables**

 

The        following table provides summary information for the years 2007, and 2006 concerning cash        and non-cash compensation paid or accrued by the Company to or on behalf of (i) the chief        executive officer and (ii) any other employee to receive compensation in excess of        $100,000.

 

 

20

 

----

 

 

| ***Summary Compensation Table***      |
|---------------------------------------|
| Name and Principal Position           | Year | Salary

($) | Bonus

($) | Stock Awards

($) | Option

Awards

($) | Non-Equity Incentive Plan Compensation

($) | Change in Pension Value and Nonqualified Deferred                        Compensation

($) | All Other Compensation

($)

                          | Total

($) |
| John Xinos

CEO and director          | 2007

2006

                         

                          | -

-

                         

                          | -

-

                          | -

-

                         

                          | -

-

                          | -

-

                          | -

-

                          | -

-

                          | -

-

                         

                          |
| Kent Carasquero CFO, PAO and director | 2007 | - | - | - | - | - | - | - | - |

 

We have no        “Grants of Plan-Based Awards”, “Outstanding Equity Awards at Fiscal        Year-End”, “Option Exercises and Stock Vested”, “Pension        Benefits”, or “Nonqualified Deferred Compensation”. Nor do we have any        “Post Employment Payments” to report.

 

| **ITEM 12.** | **SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND                        MANAGEMENT AND RELATED STOCKHOLDER MATTERS** |
|--------------|---------------------------------------------------------------------------------------------------------------------------|

 

The        following table sets forth certain information concerning the ownership of the        Company’s 42,350,000 shares of common stock issued and outstanding as of April 4,        2008, with respect to: (i) all directors; (ii) each person known by us to be the beneficial        owner of more than five percent of our common stock; and (iii) our directors and executive        officers as a group.

 

| ***Names and Addresses of Managers and Beneficial                        Owners***                                      | ***Title of Class*** | ***Number of Shares*** | ***Percent of***

***Class*** |
|-------------------------------------------------------------------------------------------------------------------------|----------------------|------------------------|-------------------------------|
| John Xinos

CEO and director809-4438 West 10th AvenueVancouver BC Canada V6R 4R8                                        | Common               | 27,000,000             | 63.8%                         |
| Kent Carasquero

CFO, PAO and director

809-4438 West 10th Avenue, Vancouver, BC, Canada                        V6R 4R8 | Common               | 510,000                | 1.2%                          |
| Officer and Directors as a Group (2)                                                                                    | Common               | 27,510,000             | 65.0%                         |

         

 

 

 

 

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| **ITEM 13.** | **CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND                        DIRECTOR INDEPENDENCE** |
|--------------|-----------------------------------------------------------------------------------------------------|

 

None of our        directors or executive officers, nor any proposed nominee for election as a director, nor        any person who beneficially owns, directly or indirectly, shares carrying more than 5% of        the voting rights attached to all of our outstanding shares, nor any members of the        immediate family (including spouse, parents, children, siblings, and in-laws) of any of the        foregoing persons has any material interest, direct or indirect, in any transaction since        the beginning of our last fiscal year or in any presently proposed transaction which, in        either case, has or will materially affect us, except those listed below.

 

During the        year ended December 31, 2007 the Company issued 750,000 shares of common stock valued at        $2,500 to Kent Carasquero, our chief financial officer, principal accounting officer and        one of our directors, as an incentive to join the board of directors.

 

During the        year ended December 31, 2007, Mr. Xinos, our chief executive officer and a director, made        contributions to capital for management fees and rent incurred of $9,300 and $1,200        respectively.

 

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

***Fees        and Services***

James        Stafford, Chartered Accountants, audited our annual financial statements and reviewed our        quarterly financial statements for fiscal year ended December 31 2006 and 2007. The        following is an aggregate of fees billed for each of the last fiscal years for professional        services rendered by our principal accountant:

| ***Accountant’s Fees***                                                                                        |
|----------------------------------------------------------------------------------------------------------------------|
|                                                                                                                 | **2007** | **2006** |
| Audit fees - auditing of our annual financial statements and                        preparation of auditors' report. |  

$ 6,483.81 | $     5,141.00 |
| Audit-related fees - review of each of the quarterly                        financial statements.                    |  

$ 6,177.00 | $   12,051.47 |
| Tax fees - preparation and filing of three major tax-related                        forms and tax planning.          | - | - |
| All other fees - other services provided by our principal                        accountants.                        | - | - |
| Total fees paid or accrued to our principal                        accountants                                       | $ 12,660.81 | $   17,192.47 |

 

***Audit        Committee Pre-Approval***

 

The Company        does not have a standing audit committee. Therefore, all services provided to the Company        by James Stafford, Chartered Accountants, as detailed above, were pre-approved by the        Company’s board of directors. James Stafford, Chartered Accountants, performed all        work only with their permanent full time employees.

 

 

 

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| **ITEM 15.** | **EXHIBITS AND FINANCIAL STATEMENT SCHEDULES** |
|--------------|------------------------------------------------|

 

***(a)        Consolidated Financial Statements***

 

The        following documents are filed under “*Item 8. Financial        Statements and Supplementary Data,*” pages F-1 through F-21,        and are included as part of this Form 10-K:

         

|   | Financial Statements of the Company for the years ended                        December 31, 2007 and 2006: |
|--------|------------------------------------------------------------------------------------------------------------|

|   | Report of Independent Registered Public Accounting                        Firm |
|--------|--------------------------------------------------------------------------------|

Balance Sheets

Statements of Loss and Comprehensive Loss

Statementsof Changes in Stockholders’        Deficiency

Statements of Cash Flows

Notes to Financial Statements

         

***(b)        Exhibits***

         

The        exhibits required to be attached by Item 601 of Regulation S-B are listed in the Index to        Exhibits on page 25 of this Form 10-K, and are incorporated herein by this        reference.

         

***(c)        Financial Statement Schedules***

 

We are not        filing any financial statement schedules as part of this Form 10-K because such schedules        are either not applicable or the required information is included in the financial        statements or notes thereto.

 

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**SIGNATURES**

 

In        accordance with the requirements of the Securities Exchange Act of 1934, the registrant        caused this report to be signed on its behalf by the undersigned thereunto duly authorized        this 5th day of April, 2008.

 

**MISTRAL VENTURE, INC.**

 

 

/s/ John Xinos

John Xinos

Chief Executive Officer

         

/s/ Kent Carasquero

Kent Carasquero

Chief Financial Officer and Principal Accounting Officer

 

 

In        accordance with the Exchange Act, this report has been signed below by the following        persons on behalf of the registrant and in the capacities and on the dates        indicated.

 

|   | ***Signature*** | ***Title*** | ***Date*** |
|--------|-----------------|-------------|------------|

         

         

|   | /s/ John Xinos | Director | April 5, 2008 |
|--------|----------------|----------|---------------|

John Xinos

         

|   | /s/ Kent Carasquero | Director | April 5, 2008 |
|--------|---------------------|----------|---------------|

Kent Carasquero

         

 

 

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**INDEX        TO EXHIBITS**

 

| ***Exhibit*** | ***Description*** |
|---------------|-------------------|

         

| 3(i)*              | Articles of Incorporation (incorporated by reference from                        our Form SB-2 Registration Statement, filed April 20, 2006). |
|-------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| 3(ii)*            | Bylaws (incorporated by reference from our Form SB-2                        Registration Statement, filed April 20, 2006). |
|--------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------|

| 10(i)*         | Common Shares Subscription Agreement dated September 4,                        2007, with Ludwig Holdings Limited. |
|--------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------|

| 10(ii)(a)*       | Purchase Agreement dated September 7, 2007 with CypherEdge                        Technologies Inc., the stockholders of CypherEdge Technologies Inc., James                        Linkous, and John Xinos (incorporated by reference from our Form 8-K, filed                        November 5, 2007). |
|------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10(ii)(b)*       | Bridge Loan Agreement dated September 7, 2007 with                        CypherEdge Technologies Inc. (incorporated by reference from our Form 8-K,                        filed November 5, 2007). |
|------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10(ii)(c)*     | Security Agreement dated September 7, 2007 with CypherEdge                        Technologies Inc. (incorporated by reference from our Form 8-K, filed                        November 5, 2007). |
|------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10(ii)(d)*     | Promissory Note of CypherEdge Technologies Inc. dated                        September 7, 2007 (incorporated by reference from our Form 8-K, filed                        November 5, 2007). |
|------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14 | Code of Ethics adopted April 4, 2008. |
|----|---------------------------------------|

| 31(a) | Certification of the Chief Executive Officer pursuant to                        Rule 13a-14 of the Securities and Exchange Act of 1934, as amended, as                        adopted pursuant to Section 302 of the Sarbanes-Oxley Act of                        2002. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31(b) | Certification of the Chief Financial Officer pursuant to                        Rule 13a-14 of the Securities and Exchange Act of 1934, as amended, as                        adopted pursuant to Section 302 of the Sarbanes-Oxley Act of                        2002. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32(a) | Certification of the Chief Executive Officer pursuant to 18                        U.S.C. Section 1350 as adopted pursuant to Section 906 of the                        Sarbanes-Oxley Act of 2002. |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32(b) | Certification of the Chief Financial Officer pursuant to 18                        U.S.C. Section 1350 as adopted pursuant to Section 906 of the                        Sarbanes-Oxley Act of 2002. |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

|   | * | Incorporated by reference to previous filings of the                        Company. |
|--------|---|--------------------------------------------------------------------------------------|

 

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