SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C.  20549


____________________________________________________





**FORM
      10-KSB**





þ
            **ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
                ACT
                OF 1934**


**For
      the Fiscal Year Ended July 31, 2007**


**OR**





o
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
                ACT
                OF 1934**


**for
      the transaction period
      from  to**


**Commission
      File Number 0-02555**





**EXOBOX
      TECHNOLOGIES CORP.**


(Name
      of
      Small Business Issuer in its charter)





Nevada
            
            88-0456274(State
                or other jurisdiction of incorporation)
            
            (I.R.S.
                Employer Identification No.)6303
                Beverly Hill, Suite 210, Houston, Texas
            
            77057-6501(Address
                of principal executive offices)
            
            (Zip
                code)





Securities
      registered under Section 12(g) of the Exchange Act:


Common
      Stock


(Title
      of
      class)





(Title
      of
      class)


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


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


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


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


State
      issuer’s revenues for its most recent fiscal year. $0.


State
      the
      aggregate market value of the voting stock held by non-affiliates computed
      by
      reference to the price at which the stock was sold, or the average bid and
      asked
      prices of such stock, as of a specified date within the past 60 days. The
      aggregate market value of the common stock held by non-affiliates of the
      registrant was $41,497,291.20, based on the closing price on the over the
      counter Pink Sheets market on October 17, 2007.





As
        of
        October 17, 2007, 348,700,203 shares of the registrant's common stock were
        outstanding.







1





EXOBOX
      TECHNOLOGIES CORP.


INDEX
      TO
      FORM 10-KSB





PAGEPART
                I.
            
            3ITEM
                1.
            DESCRIPTION
                OF BUSINESS
            3ITEM
                2.
            DESCRIPTION
                OF PROPERTY
            12ITEM
                3.
            LEGAL
                PROCEEDINGS
            12ITEM
                4.
            SUBMISSION
                OF MATTERS TO A VOTE OF THE SECURITY
                HOLDERS
            12PART
                II
            
            13ITEM
                5.
            MARKET
                FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL
                BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES
            13ITEM
                6.
            MANAGEMENT'S
                DISCUSSION AND ANALYSIS OR PLAN OF
                OPERATION
            16ITEM
                7.
            FINANCIAL
                STATEMENTS AND RELATED FOOTNOTES
            19ITEM
              8.
            CHANGES
                IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
                FINANCIAL DISCLOSURE
            30ITEM
                8A.
            CONTROLS
                AND PROCEDURES
            30ITEM
                8B.
            OTHER
                INFORMATION
            31PART
                III.
            
            31ITEM
                9.
            DIRECTORS,
                EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
                PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
                ACT
            31ITEM
                10.
            EXECUTIVE
                COMPENSATION
            33ITEM
                11.
            SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
                AND RELATED STOCKHOLDER MATTERS
            34ITEM
                12.
            CERTAIN
                RELATIONSHIPS AND RELATED
                TRANSACTIONS
            35ITEM
                13.
            EXHIBITS
            37ITEM
                14.
            PRINCIPAL
                ACCOUNTANT FEES AND SERVICES
            38Signatures
            38




2
 *Index*





**FORWARD
      LOOKING STATEMENTS**





This
      Form
      10K-SB contains forward-looking statements. These statements relate to future
      events or future financial performance and involve known and unknown risks,
      uncertainties and other factors that may cause Exobox Technologies Corp.
      (“Exobox,” “Company,” “our” or “we”) or its industry’s actual results, levels of
      activity, performance or achievements to be materially different from any future
      results, levels of activity, performance or achievements expressed or implied
      by
      the forward-looking statements.





In
      some
      cases, you can identify forward-looking statements by terminology such as “may,”
“will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,”
“predicts,” “potential,” or the negative of these terms or other comparable
      terminology. These statements are only predictions. Actual events or results
      may
      differ materially.





Although
      the Company believes that the expectations reflected in the forward-looking
      statements are reasonable, the Company cannot guarantee future results, levels
      of activity, performance or achievements. Moreover, neither the Company nor
      any
      other person assumes responsibility for the accuracy and completeness of these
      forward-looking statements. The Company is under no duty to update any of the
      forward-looking statements after the date of this report to conform its prior
      statements to actual results.





Further,
      this report contains forward looking statements within the meaning of Section
      27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the
      Securities Exchange Act of 1934 (The “Exchange Act”)that involve substantial
      risks and uncertainties. Such statements include, without limitation, all
      statements as to expectation or belief and statements as to our future results
      of operations, the progress of any research, product development and clinical
      programs, the need for, and timing of, additional capital and capital
      expenditures, partnering prospects, the protection of and the need for
      additional intellectual property rights, effects of regulations, the need for
      additional facilities and potential market opportunities. The Company’ actual
      results may vary materially from those contained in such forward-looking
      statements because of risks to which the Company is subject, such as lack of
      available funding, competition from third parties, intellectual property rights
      of third parties, regulatory constraints, litigation and other risks to which
      the Company is subject.








**PART
      1**





**ITEM
      1. DESCRIPTION OF BUSINESS**




**Overview**




Exobox
      was established as a network security development company to capitalize upon
      the
      growing need in the computer market for a reliable, efficient, effective and
      proactive network security system capable of protecting computers from the
      menace of cyber threats such as trojans, worms, viruses, spy ware and identity
      theft. Over the last three years, we have developed two proprietary,
      patent-protected software technologies that we believe meets this need by
      providing computers such protection without affecting workflow or requiring
      a
      continuously updated database of known viruses. Our proprietary approach to
      network security presents a different approach from the largely “reactive”
network security software currently available from others. We believe our
      technology offers an effective solution to stop cyber threats. Further, it
      eliminates the need for CRC and viral database to drive retroactive file
      scanning,.




**History**




We
      were
      originally incorporated in December 1999 in the State of Nevada and we
      changed our name to Exobox Technologies Corp. in September 2005. On September
      15, 2005, TMI Acquisition Corp., a newly formed, wholly-owned subsidiary of
      Exobox Nevada, merged into Exobox Technologies Corp., a Delaware corporation,
      and the shareholders of Exobox Delaware received 3,513,825 shares of Exobox
      Nevada convertible preferred stock (2,392,915 shares of Series A convertible
      preferred stock and 1,120,910 shares of Series B convertible preferred stock).
      The majority shareholders were and are three directors, Scott Copeland, Reginald
      Goodman and Marc Pernia.




3
 *Index*





During
      August, September and October 2007, all of the holders of the all of the
      Company’s Class A Common Stock, Series A Preferred Stock, Series B Preferred
      Stock and Series D Preferred Stock converted into shares of the Company’s common
      stock.  Due to the conversions the Company exchanged (i) 9,939,101 shares
      of common stock for 9,939,101 shares of our Class A Common Stock, (ii)
      187,062,449 shares of our common stock for2,031,986 shares of Series A Preferred
      Stock, (iii) 58,041,041shares of our common stock for 660,132 shares of Series
      B
      Preferred Stock and (iv) 14,013,930 shares of our common stock for 104,992
      shares of Series D Preferred Stock.  Therefore, as of October 17, there are
      no longer any shares of Class A Common Stock, Series A Preferred Stock,
      Series B Preferred Stock and Series D Preferred Stock.





Effective
      September 10, 2007, we entered into a settlement agreement and mutual
      release with Manillo Investments, Ltd (“Manillo Settlement”), pursuant to which
      we agreed to issue Manillo Investment, Ltd a new promissory note in the
      principal amount of $500,000 with principal and accrued interest due in five
      years in exchange for Manillo Investment, Ltd. (i) cancelling a convertible
      note
      with an outstanding balance as of July 31, 2007 of $105,000, (ii) terminating
      the securities purchase agreement issued in connection with the convertible
      note, and (iii) assigning the Series C Preferred Stock owned by Manillo
      Investment, Ltd. to us.  Therefore as a result of the Manillo
      Settlement, there are no Series C Preferred Stock outstanding.




**The
      Industry and Markets**




Due
      to
      the fundamental architecture of our technology, our goal is to develop
      variations which will result in several different products reaching across
      several different markets, including, but not limited to:




·
            Endpoint
                and network Internet security


·
            Intrusion
                Detection and Prevention


·
            Security
                and other Administrative Policy
                Enforcement


·
            Disaster/Data
                Recovery


·
            Auditing/Reporting


·
            IP
                Tracking


·
            Data
                and Environment Mobility


·
            Software
                Piracy Protection




Viruses,
      trojans and other cyber threats cost businesses and consumers billions of
      dollars each year by disrupting commerce and creating havoc in our fast-paced,
      communications-based world. Home user computer or a computer network safety
      continues to be one of the most vexing problems for individuals, banks,
      government institutions and millions of businesses. One virus alone can wipe
      out
      several days’ worth of vital transactions or destroy costly equipment. Computer
      security, be it for the individual user or network, is one of
      the foundational elements of a computer-based world that thrives on
      e-commerce and online transactions.  Consider the following market
      statistics:




*Computer/Internet
      User Growth*


·
            According
                to IDC, the number of computer users worldwide is estimated to be
                more
                than 650 million and growing up to 15%
                annually.




*VPN
      and Security Services (1)*


·
            The
                worldwide market for VPN services is estimated to grow from $23.4
                billion
                in 2005 to $28.6 billion in 2009.


·
            The
                worldwide market for network security services is estimated to grow
                from
                $4.8 billion in 2005 to $8.0 billion in
                2009.




*Network
      Security Appliance and Software (2)*


·
            The
                worldwide market for VPN appliances and software is estimated to
                grow from
                $2.9 billion in 2005 to $4.8 billion in
                2009.


·
            The
                worldwide market for IDS/IPS appliances and software is estimated
                to grow
                from $.5 billion in 2005 to $1.0 billion in
                2009.


·
            The
                worldwide market for gateway and antivirus appliances and software
                is
                estimated to grow from $.2 billion in 2005 to $.83 billion in
                2009.





4
 *Index*




*Endpoint
      and Network Anti-Virus Software (3)*


·
            The
                worldwide consumer market for antivirus software is estimated to
                grow from
                $2.76 billion in 2005 to $5.76 billion in
                2009.


·
            The
                worldwide enterprise market for antivirus software is estimated to
                grow
                from $2.03 billion in 2005 to $4.16 billion in
                2009.


_________________________


(1)
            Infonetics
                Research, VPN and Security Services, 2006; Company
                estimates.


(2)
            Infonetics
                Research, Network Security Appliances and Software, 2005; Company
                estimates.


(3)
            Frost
                & Sullivan, World Antivirus Market, 2006; Company
                estimates.




**Business
      Model**




Our
      goal
      is to enhance computer and network security by promoting software that
      eliminates the threat of viruses, trojans, worms, host system compromises (e.g.
      rootkits), spyware and the proliferation of identity theft, which we believe
      to
      be one of the fastest growing crimes in the U.S. We have developed a proprietary
      system that we believe protects computers and entire networks without
      interfering with performance, requiring periodic database updates or
      necessitating staff training.




The
      global market for such software is expanding rapidly as more businesses and
      consumers search for a proactive, effective solution to Internet viruses and
      other menaces that threaten to derail both the home user and computer
      networks.  We intend to structure our business on a
      business-to-business licensing model. In doing so, we plan to identify the
      key
      providers in certain industries, geographic territories and market segments
–
including Internet service providers, banks and financial institutions,
      government agencies, software makers, computer hardware manufacturers, home
      PC
      users, business PC users, educational institutions, and e-commerce companies
–
and license the software for use by those institutions. We believe this model
      will eliminate significant expenses for inventory control, distribution, end
      user tech support and payroll.




**Proposed
      Products**




We
      have
      developed a proprietary, patented technology we believe to be capable of
      providing reliable, efficient and effective endpoint computer and network
      security against all cyber threats such as viruses, worms, trojans, host system
      compromises (e.g., rootkits), spyware, and identity theft.




Currently,
      we do not have sufficient funding to commence product development. We believe
      that a minimum of $7 million is required to develop, market and test our first
      generation of consumer and enterprise solution and derivative
      products. Secure User Zone (“SUZ”) is an enterprise and home user endpoint
      security solution we plan to build using our patented technology for protecting,
      managing and auditing Windows® based computers such as workstations, desktops
      and laptops. A SUZ user environment will be isolated from the hosting computer
      system to the extent that all user interactions while in their
      SUZ  user environment, including process execution, inter-process
      communication (IPC), file system I/O (input/output), Windows® registry I/O and
      network I/O, are isolated from the host computer systems operating
      environment.  SUZ will manage all user transactions with objects
      local to and interfacing with the user environment.  This transaction
      management will allow for granular control of the visibility/accessibility
      of
      all resources and services in both the computers local namespace and across
      the
      external domain. We believe this isolation of the user environment will protect
      the hosting computer, as well as endpoints sharing the local network, from
      any
      user transgressions, such as maliciously caused destruction, unauthorized
      modification, or unauthorized disclosure of data. Management via a server/agent
      component will provide for centralized enterprise level configuration,
      administration and reporting/auditing of SUZ user environments.




From
      our
      SUZ technology platform, once we obtain the necessary capital resources, we
      anticipate developing the following products:




· SUZ  IP
      Tracking Module, which is intended to enable companies to track documents from
      creation to present and allow for remediation, revocation, access control,
      encryption, signing and proximity controls;


· SUZ
‘Data
      Stick’, which is planned to allow its user to transfer his desktop/workspace as
      well as all data. By plugging the Exobox Data Stick into any computer, the
      user
      causes that computer to replicate the user’s original computing environment,
      including clock cycles, memory, operating systems, as well as the user’s
      wallpaper, URL history, documents, Outlook contacts and any other unique
      settings the user chooses;





5
 *Index*





· SUZ
      Disaster Recovery Module, which is intended to allow quick and easy back up
      of
      all data and settings on all network computers by containing each user’s data
      and settings in a SUEZ environment unique to each user;


· SUZ
      Policy Enforcement Module, which is planned to fully prevent any circumvention
      of administration policies by completely denying unauthorized users access
      to
      administration policy settings which permanently reside outside the unique
      SUZ
      environment; and,


· SUZ
      SDK
      Package, which is anticipated to be a comprehensive enterprise solution
      utilizing our SUZ technology platform.




Based
      on
      current market estimates, we anticipate that the completion of the
      above-mentioned products will require a minimum of $7,000,000 in funding and
      likely, substantially more, as we build up other aspects of our business during
      the development phase.




**Business
      Model and Growth Strategy**




We
      intend
      to implement a business-to-business licensing model that identifies key
      providers in certain industries, geographic locations and market segments –
including Internet service providers, banks and financial institutions,
      government agencies, software makers, computer hardware manufacturers, business
      pc users, educational institutions and e-commerce companies – and license the
      software for use by those institutions. We believe this model will differentiate
      us from many traditional software companies.




Furthermore,
      our business strategy is to license our technology on a selective and worldwide
      basis to OEM, computer and software development and services companies which
      design and implement software and network systems for end users.  Such
      companies include, but are not limited to IBM, Accenture, Bearingpoint, EDS,
      CSC
      Computer Sciences Corp. and Perot Systems.  OEMs may include companies
      such as Dell, HP, Apple, Seagate, and EMC, among many others.  To
      date, we have not entered into any arrangement or agreement with any of the
      above referenced companies.




Key
      elements of the business model we intend to implement include:




*Target
      Leading Systems Companies in Multiple Large Markets.* We intend to target
      systems companies in markets that we believe represent the greatest potential
      for sales of our products. We believe that by targeting these market leaders,
      we
      will place competitive pressure on other industry participants to license our
      core technology. We intend to actively participate with our licensees in their
      marketing and selling efforts to systems companies, develop applications, notes
      and other technical material to promote and support the SUZ technology in the
      marketplace, and provide technical support to licensees which have adopted
      our
      SUZ technology.




*Leverage
      Business Model by Sharing Research and Development Efforts with Licensees*.
      We believe that cooperative development efforts with our licensees will allow
      us
      to improve our technology and bring additional products and variations of our
      technology to market faster, cheaper and with broader support than would be
      possible if we were to attempt to develop, manufacture or sell our SUZ-based
      products on our own. While all the development of the fundamental technology
      and
      much of the specific process implementation will be done by us, we envision
      that
      a significant portion of the specific process implementation will be
      accomplished by the partner licensees.  By spreading the cost of developing
      add-ons to our technology among all our licensees, which we will consider to
      be
      our partners in development, we believe our business model will permit us to
      maintain a relatively low cost structure and devote a relatively large portion
      of our resources to further research and development efforts which are directly
      related to our fundamental technology.




*Generate
      Revenue through a Combination of Licensing Fees and Royalties*. We
      anticipate that in addition to gross royalties, licensees will generally pay
      a
      license fee to us. Part of these fees may be due upon the achievement of certain
      milestones, such as provision of certain deliverables by us.




Royalties,
      which are generally a percentage of the gross revenues that will be received
      by
      licensees on sales of their products based on our technology, will normally
      be
      payable by a licensee on sales occurring during the license term. For a typical
      systems application of our technology, we anticipate that we will receive
      royalties from the sale as they are shipped by our licensees. We currently
      anticipate that gross sales royalty rates will range from approximately 3%
      to
      7%, and in some cases may decline based on the passage of time or on the total
      volume. The exact rate and structure of a royalty arrangement with a particular
      licensee may depend on a number of negotiated factors, including the amount
      of
      the license fee to be paid by the licensee and the marketing and engineering
      commitment made by the licensee.




6
 *Index*




*Maintain
        Technology Leadership*. We believe that we have developed a revolutionary
        technology for the protection of computer and network security and we are
        committed to continuing research and development efforts, both internally
        and in
        conjunction with our future partner licensees, to further improve the SUZ
        technology. We plan to continue our emphasis on research and development
        by
        assigning significant portions of our current and future engineering staff
        to
        developing future generations of our fundamental technology.
  **Marketing
        and Sales**
  Consistent
        with our anticipated business model, we plan to focus future sales and marketing
        activities on developing relationships with potential licensees of our
        technology and on participating with existing licensees in marketing, sales
        and
        technical efforts directed to systems companies and companies that market
        directly to home users. We anticipate that our sales and marketing efforts
        will
        include limited applications engineering and other technical support for
        systems
        companies, as well as trade shows, advertising and other traditional marketing
        activities.
  To
        facilitate our product development we commissioned Wilson Research Group
        of San
        Carlos, California and E-Rewards of Scottsdale, Arizona to conduct a market
        survey of Fortune 400 companies. This survey provided us with the data needed
        to
        insure that our design documents properly address specific current industry
        needs and concerns.  We also commissioned Matasano Security, Inc. to
        provide a threat modeling assessment to insure that our software was coded
        to
        protect from every possible vector of attack.
  **Research
        and Development**
  Our
        research and development efforts over the last three years have resulted
        in the
        filing of more than eighteen patent applications for our technology with
        additional patent applications forthcoming.  In fiscal 2007 and 2006,
        we spent $0 and $0, respectively, in research and development.
  We
        intend
        to focus our programming efforts on creating new applications from the SUZ
        technology. Currently, we have identified several different applications
        which
        we intend to build, if we obtain needed capital.
  **Competition**
  The
        markets for the products we plan to build are intensely competitive and are
        subject to rapid changes in technology. We expect competition to continue
        to
        increase in the future. We believe that the principal competitive factors
        affecting these markets include, but are not limited to performance,
        functionality, quality, customer support, breadth of product group, frequency
        of
        upgrades and updates, integration of products, manageability of products,
        brand
        name recognition, reputation, and price.
  Most
        of
        the companies we will be competing against have longer operating histories,
        greater name recognition, stronger relationships with channel partners, larger
        technical staffs, established relationships with hardware vendors and/or
        greater
        financial, technical and marketing resources, all things that we do not have
        at
        this time. These factors may provide our competitors with an advantage in
        penetrating markets with their network security and management
        products.
  *Anti-Virus*.
        Our principal competitors in the anti-virus market are Symantec and Computer
        Associates. Trend Micro remains the strongest competitor in the Asian anti-virus
        market. Sophos, Fsecure, Panda, and Dr. Ahn’s are also showing growth in
        their respective markets. As a result of its GeCAD Software acquisition,
        at some
        point we may also compete directly against Microsoft in the consumer
        market.
  *Network
        Security and Intrusion Detection and Protection*. Our principal competitors
        in the security market vary by product type. For intrusion detection and
        prevention products, we compete with Cisco Systems, Computer Associates,
        Fortinet, Internet Security Systems, NetScreen, Sourcefire, Symantec and
        TippingPoint Technologies. The markets for encryption and virtual private
        network, or VPN, products are highly fragmented with numerous small and large
        vendors. VPN competitors include hardware and software vendors, including
        telecommunications companies and traditional networking
        suppliers.
  7
 *Index*
  *Other
        Competitors*.**In addition to competition from large technology
        companies such as HP, IBM, Intel, Microsoft, and Novell that may offer network
        and system protection products as enhancements to their operating systems,
        we
        also face competition from smaller companies and shareware authors that may
        develop competing products.
  **Protection
        of Intellectual Property**
  We
        have
        filed twenty patent application and fifteen trademark application protecting
        our
        intellectual property.  We attempt to protect our software technology
        by relying on a combination of copyright, patent, trade secret and trademark
        laws, restrictions on disclosure and other methods. In particular, we have
        a
        number of registered trademarks and currently hold patents in the United
        States,
        as well as patent holdings in other countries, relating to our technology
        and
        trade names. We have regularly filed other applications for patents and
        trademarks in order to protect proprietary intellectual property that we
        believe
        is important to our business.
  As
        we
        develop products and begin to market them, we may face a number of risks
        relating to our intellectual property, including unauthorized use and
        unauthorized copying, or piracy of our software solutions. Litigation may
        be
        necessary to enforce our intellectual property rights, to protect trade secrets
        or trademarks, or to determine the validity and scope of the proprietary
        rights
        of others. Furthermore, any patents that have been issued to us could be
        determined to be invalid and may not be enforceable against competitive products
        in every jurisdiction. Moreover, other parties have asserted and may, in
        the
        future, assert infringement claims against us. These claims and any litigation
        may result in invalidation of our proprietary rights. Litigation, even if
        not
        meritorious, could result in substantial costs and diversion of resources
        and
        management attention. In addition, third party licenses may not continue
        to be
        available to us on commercially acceptable terms, or at all.
  To
        mitigate these risks, we intend to implement worldwide strategies on multiple
        intellectual property fronts. As part of this comprehensive strategy, we
        intend
        to initiate plans for our SOS (Secure Operating System, a foundational element
        of our SUZ technology) technology in respect to both domestic and foreign
        filings.  With regard to the foreign filings, patent applications
        covering the SOS technology have been submitted in eleven different foreign
        countries.
  **Employees**
  We
        presently have six employees.
  **Other
          Information**
 
 Our
          Internet address is *www.**exobox**.com.* We make available
          free of charge on our website our annual reports on Form 10-K, quarterly
          reports on Form 10-Q, and current reports on Form 8-K, and amendments
          to those reports filed or furnished pursuant to Section 13(a) or 15(d) of
          the Exchange Act as soon as reasonably practicable after we electronically
          file
          such material with, or furnish it to, the Securities and Exchange Commission,
          or
          SEC. Other than the information expressly set forth in this annual report,
          the
          information contained, or referred to, on our website is not part of this
          annual
          report.
 
 The
          public may also read and copy any materials we file with the SEC at the
          SEC’s
          Public Reference Room at 100 F Street, NE, Room 1580, Washington,
          DC 20549. The public may obtain information on the operation of the Public
          Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains
          a
          website at *www.sec.gov*that contains reports, proxy and information
          statements, and other information regarding issuers, such as us, that file
          electronically with the SEC.
 
 **Risk
        Factors**
  *We
        have a limited operating history with significant losses and expect losses
        to
        continue for the foreseeable future****.***
  We
        have
        incurred annual operating losses since our inception. As a result, at July
        31,
        2007, we had an accumulated deficit of $6,489,749. We had no gross revenues
        for the year ended July 31, 2007, and a loss from operations of $3,548,563.
        As we pursue our business plan, we expect our operating expenses to
        increase significantly, especially in the areas of sales and marketing. As
        a result we expect continued losses in fiscal 2008 and
        thereafter.
  8
 *Index*
  *We
        will**not be able to continue our business operations unless we raise
        additional financing***.**
  We
        are a
        development stage company and as such have generated no revenues or profits
        to
        date.  Our success will depend on the ability to attract external
        financing for our working capital needs and to develop our patent rights
        in
        connection with our software solutions.  As of the date hereof, we do
        not have sufficient funding to satisfy our working capital needs or to develop
        our products and, the failure to obtain sufficient funding, will preclude
        us
        from conducting meaningful business operations. We have historically financed
        our operations through best efforts private equity and debt financings. We
        do not have any commitments for equity or debt funding at this time, and
        additional funding may not be available to us on favorable terms, if at
        all.
  *We
        may not be able to meet our current and future liabilities and remain in
        operation until we receive additional
        capital***.**
  As
        of
        July 31, 2007, we have current assets of $22,363 and current liabilities
        of
        $3,767,304, of which $2,025,042 is for a derivative liability and $105,000
        is a
        convertible note payable.  In connection with the Manillo Settlement,
        the $105,000 convertible note has been replaced with a long term note with
        an
        original principal amount of $500,000. Additionally, as a result of the Manillo
        Settlement, in which the Series C Preferred Stock was returned to us, the
        derivative liability of $2,025,042 will be reversed in the quarter ending
        October 31, 2007 and will no longer be reflected on our balance sheet on
        that
        date.  Our current liquidity position only allows us to meet nominal
        working capital needs.  We will need $750,000 to meet our working
        capital needs through fiscal 2008.  Any failure to obtain such
        financing could force us to abandon or curtail our operations.
  *We
        will need to raise additional funds to fund**product
        development***.**
  Our
        cash
        does not afford us adequate liquidity to fund out product
        development.  In order to fund our product development, including
        marketing and testing, we will need to raise at least an additional $7,000,000,
        Moreover, we anticipate that we will need additional capital in excess of
        $7,000,000 million to continue to fund and expand our business operations.
        There is no assurance that we can raise additional capital from external
        sources, the failure of which could cause us to sell assets or
        curtail operations.
  *Ours
        auditor has substantial doubts as to our ability to continue as a going
        concern.*
  Our
        auditor's report on our July 31, 2007 financial statements expresses an opinion
        that substantial doubt exists as to whether we can continue as an ongoing
        business.  Because we do not have sufficient capital, we may be
        required to suspend or cease the implementation of our business plans within
        12
        months. Because we have been issued an opinion by its auditors that substantial
        doubt exists as to whether we can continue as a going concern it may be more
        difficult for us to attract investors.  Our future is dependent upon
        our ability to obtain financing and upon future profitable operations from
        the
        sale of our products.
  *Additional
        capital may dilute current stockholders***.**
  In
        order
        to provide capital for the operation of our business we may enter
        into additional financing arrangements. These arrangements may involve the
        issuance of new common stock, preferred stock that is convertible into
        common stock, debt securities that are convertible into common stock or
        warrants for the purchase of common stock. Any of these items could result
        in a material increase in the number of shares of common stock outstanding
        which would in turn result in a dilution of the ownership interest of
        existing common shareholders. In addition, these new securities could
        contain provisions, such as priorities on distributions and voting rights,
        which could affect the value of our existing common stock.
  *The
        market price of our common stock is very volatile and the value of your
        investment may be subject to sudden
        decreases***.**
  The
        trading price for our common stock has been, and we expect it to continue
        to be, volatile. For example, the price of our stock has
        fluctuated between $22.00 per share and $0.15 per share since January 1,
        2006. The price at which our common stock trades depends upon a number of
        factors, including our historical and anticipated operating results, and
        general market and economic conditions, which are beyond our control.
 In addition, the stock market has, from time to time, experienced
        extreme price and volume fluctuations. These broad market fluctuations may
        lower the market price of our common stock. Moreover, during periods of
        stock market price volatility, share prices of many companies have often
        fluctuated in a manner not necessarily related to their operating
        performance. Accordingly, our common stock may be subject to greater price
        volatility than the stock market as a whole.
  9
 *Index*
  *We
        lack an operating history which you can use to evaluate us, making any
        investment in**us**risky***.**
  We
        lack
        an operating history which investors can use to evaluate our previous earnings.
        This makes it harder for you as an investor to predict how we may do in the
        future. Therefore, an investment in us is risky because we have no business
        history and it is hard to predict what kind of return our stock will have
        in the
        future, if at all.
  *There
        can be no assurance that we will successfully commercialize any products
        or
        services***.**
 
 There
        can
        be no assurance that we will successfully commercialize any products and
        services based on our technology or manage the related manufacturing, marketing,
        sales, licensing and customer support operations in a profitable manner.
        In
        particular, our prospects must be considered in light of the problems, delays,
        expenses and difficulties encountered by any company in the startup stage,
        many
        of which may be beyond our control. These problems, delays, expenses and
        difficulties include unanticipated problems relating to product development
        and
        formulation, testing, quality control, production, inventory management,
        sales
        and marketing and additional costs and competition, any of which could have
        a
        material adverse effect on our business, financial condition and results
        of
        operations. There can be no assurance that our products and services can
        be
        successfully marketed or that it will ever achieve significant revenues or
        profitable operations.
  *To
        develop our software solutions we will need to engage third party
        developers***.**
  At
        this
        time, we do not have the resources to directly conduct full product development,
        obtain regulatory approvals, or manufacture or commercialize any products.
        Therefore, we depend upon others to carry out such activities. As a result,
        we
        anticipate that we may enter into collaborative agreements with third parties
        able to contribute to developing our technologies. Such agreements may limit
        our
        control over any or all aspects of development.
  *There
        can be no assurance that we will ever be profitable.*
  To
        be
        profitable, we must successfully commercialize our technologies. We are in
        the
        early stages of development and will require significant further research,
        development and testing, and are subject to the risks of failure inherent
        in the
        development of products based on innovative or novel technologies.
  *Our
        industry changes rapidly due to evolving technology standards and our future
        success will depend on our ability to adapt to market
        change***.**
  Our
        future success will depend on our ability to address the
        increasingly sophisticated needs of the market. We will have to
        keep pace with technological developments, evolving industry standards and
        changing customer requirements. We expect that we will have to respond
        quickly to rapid technological change, changing customer needs, frequent
        new product introductions and evolving industry standards that may render
        our contemplated products obsolete. We may not have
        sufficient resources to make the necessary investments, which could have
        a material adverse effect on our business.
  *We
        depend upon our intellectual property and our failure to protect existing
        intellectual property or secure and enforce such rights for new proprietary
        technology could adversely affect our future growth and
        success***.**
  Our
        ability to successfully protect our proprietary technology is essential to
        our
        success. We have filed trademark and patent applications to protect
        intellectual property rights for technology that we have developed. Our future
        success also may depend upon our ability to obtain additional licenses for
        other intellectual properties. We may not be successful in acquiring
        additional intellectual property rights with significant commercial value
        on acceptable terms. Even if we are successful in acquiring such rights,
        it can
        provide no assurance that we will be successful in adapting or deploying
        them as to the timing or cost of such development efforts or as to the
        commercial success of the resulting products or services.
  10
 *Index*
  *Our
        competitors may develop non-infringing products or technologies that adversely
        affect our future growth and revenues***.**
  It
        is
        possible that our competitors will produce proprietary technologies similar
        to ours without infringing on our intellectual property rights. We
        also rely on unpatented proprietary technologies. It is possible that
        others will independently develop the same or similar technologies or
        otherwise obtain access to the unpatented technologies upon which we rely
        for future growth and revenues. Failure to meaningfully protect our trade
        secrets, know-how or other proprietary information could adversely affect
        our future growth and revenues.
  *Our
        success is dependent upon our ability to protect our proprietary
        technologies***.**
  Our
        success is substantially dependent upon our proprietary technologies and
        our
        ability to protect our intellectual property rights. Exobox received a formal
        “Notice of Allowance” from the United States Patent and Trademark Office (USPTO)
        for its second patent, Application No. 11/591,112, issued on August 9, 2007.
        We
        currently have filed for 20 patent applications with the U.S. Patent Office
        and
        other foreign patent offices that relate to software security solutions.
        We rely
        upon our patent applications and trade secret laws, non-disclosure agreements
        with our employees, consultants and third parties to protect our intellectual
        property rights. The complexity of patent and common law, combined with our
        limited resources, create risk that our efforts to protect our proprietary
        technologies may not be successful. We cannot assure you that our patent
        applications will be upheld or that third parties will not invalidate our
        patent
        rights. In the event our intellectual property rights are not upheld, such
        an
        event would have a material adverse effect on us. In addition, there is a
        risk
        that third parties may independently develop substantially equivalent or
        superior technologies.
  *Any
        litigation to protect our intellectual property or any third party claims
        to
        invalidate our patents could have a material adverse effect on our
        business***.**
  Our
        success depends on our ability to protect our intellectual property rights.
        In
        the future, it may be necessary for us to commence patent litigation against
        third parties whom we believe require a license to our patents. In addition,
        we
        may be subject to third-party claims seeking to invalidate our patents. These
        types of claims, with or without merit, may subject us to costly litigation
        and
        diversion of management’s focus. In addition, based on our limited financial
        resources, we may not be able to pursue litigation as aggressively as
        competitors with substantially greater financial resources. Based on our
        limited
        financial resources, it may be necessary for us to engage third party
        professionals on a contingency basis pursuant to which such parties would
        be
        entitled to share in the proceeds of any successful enforcement of our
        intellectual property rights. If third parties making claims against us seeking
        to invalidate our patent are successful, they may be able to obtain injunctive
        or other equitable relief, which effectively could block our ability to license
        or otherwise capitalize on our proprietary technologies. Successful litigation
        against us resulting in a determination that our patent applications are
        invalid
        would have a material adverse effect on us.
  *We
        may be unable to successfully compete against companies with resources greater
        than ours, if we are unable to protect our patent rights and trade secrets,
        or
        if we infringe on the proprietary rights of third
        parties***.**
  We
        will
        need to obtain additional patents on our technology to protect our rights
        to our
        technology. To obtain a patent on an invention, one must be the first to
        invent
        it or the first to file a patent application for it. We cannot be sure that
        the
        inventors of subject matter covered by patents and patent applications that
        we
        own or may license in the future were the first to invent, or the first to
        file
        patent applications for, those inventions. Furthermore, patents we own or
        may
        license in the future may be challenged, infringed upon, invalidated, found
        to
        be unenforceable, or circumvented by others, and our rights under any issued
        patents may not provide sufficient protection against competing software
        or
        otherwise cover commercially valuable software or processes.
  We
        seek
        to protect trade secrets and other un-patented proprietary information, in
        part
        by means of confidentiality agreements with our collaborators, employees,
        and
        consultants. If any of these agreements is breached, we may be without adequate
        remedies. Also, our trade secrets may become known or be independently developed
        by competitors.
  *Our
        industry is competitive and as such competitive pressures could prevent us
        from
        obtaining profits, forcing us to abandon or curtail our business plan and
        possibly liquidate our assets***.**
  One
        of
        the main factors in determining in whether we will be able to realize any
        profits and/or be able to continue its business plan will be whether or not
        we
        are able to successfully compete in the software industry. The virus protection
        software industry is highly competitive and we may be competing against
        companies with greater resources and more experience in the industry. If
        we are
        unable to compete in the marketplace and fail to generate any profits, we
        may be
        forced to liquidate its assets and any investment in us could be
        lost.
  11
 *Index*
  *We
        are under a government investigation which clouds our ability to conduct
        business***.**
  In
        November 2006, we received a subpoena from the United States Securities &
Exchange Commission requesting the production of documents from January 1,
        2000
        until present and testimony; this formal inquiry following up an informal
        inquiry commenced in September 2006. The SEC continues to investigate matters
        related to us and this negatively impacts our ability to raise money and
        hire
        personnel.
  *We
        rely upon key personnel and if any one leaves**us**our business
        plan and our business operations could be adversely
        effected***.**
  We
        rely
        on our executives for our success. Their experience and inputs create the
        foundation for our business and they are responsible for the implementation
        and
        control over our development activities. We currently have six employment
        contracts and we do not hold “key man” insurance on any of these people. Moving
        forward, should they be lost for any reason, we will incur costs associated
        with
        recruiting replacement personnel and could face potential delays in operations.
        If we are unable to replace any one of them with other suitably trained
        individuals, we may be forced to scale back or curtail our business plan.
        As a
        result of this, your securities in us could become devalued.
  *Investors
        may face significant restrictions on the resale of our common stock due to
        federal regulations of penny stocks***.**
  Our
        common stock is not listed on any exchange; however, it is traded in the
        over-the-counter market. If our common stock is listed on the OTC Bulletin
        Board, it will be subject to the requirements of Rule 15(g)9, promulgated
        under
        the Securities Exchange Act, as long as the price of our common stock is
        below
        $5.00 per share. Under such rule, broker-dealers who recommend low-priced
        securities to persons other than established customers and accredited investors
        must satisfy special sales practice requirements, including a requirement
        that
        they make an individualized written suitability determination for the purchaser
        and receive the purchaser’s consent prior to the transaction. The Securities
        Enforcement Remedies and Penny Stock Reform Act of 1990, also requires
        additional disclosure in connection with any trades involving a stock defined
        as
        a penny stock. Generally, the Commission defines a penny stock as any equity
        security not traded on an exchange or quoted on Nasdaq that has a market
        price
        of less than $5.00 per share. The required penny stock disclosures include
        the
        delivery, prior to any transaction, of a disclosure schedule explaining the
        penny stock market and the risks associated with it. Such requirements could
        severely limit the market liquidity of the securities and the ability of
        purchasers to sell their securities in the secondary market.
  **ITEM
        2. DESCRIPTION OF PROPERTY**
 
 During
        2005 we leased approximately 800 square feet of office space in a building
        located at 6303 Beverly Hill, Suite 210, Houston, Texas 77057. The
        premises are leased from an arms-length third party, pursuant to a verbal
        month-to-month lease at the rate of $500 per month.
 
 **ITEM
        3. LEGAL PROCEEDINGS**
  In
        November 2006, we received a subpoena from the United States Securities &
Exchange Commission requesting the production of documents from January 1,
        2000
        until present and testimony; this formal inquiry following up an informal
        inquiry commenced in September 2006. Documents requested included, without
        limitation, formation documents, minutes, records relating to payments or
        services rendered in exchange for as well as offering documents utilized
        in
        connection with the issuance of shares of capital stock, any correspondence
        with
        various current and former shareholders, vendors and other third parties,
        documentation surrounding the 2005 reverse triangular merger, as well as
        documentation relating to our business. The SEC continues to investigate
        matters
        related to us.
 
 **ITEM
        4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
        HOLDERS**
 
 **None.**
  12
 *Index*
  **PART
        II**
 
 **ITEM
        5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS
        AND SMALL
        BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES**
 
 **Market
        Information**
  Our
        common stock has been traded under the stock symbol “EXBX” on the
        over-the-counter Pink Sheets market. The chart below breaks down the high
        and
        the low prices for our last two fiscal years which quotations reflect
        inter-dealer price, without retail mark-up, mark-down or commission, and
        may not
        reflect actual transactions. The trading price for our common stock has been,
        and we expect it to continue to be, volatile. During 2007 and 2006, the
        high and low prices were as follows:
  Quarter
                  Ended
              
              High
              
              
              LowJuly
                  31, 2007
              
              $
              0.55
              
              
              $
              0.35April
                  30, 2007
              
              $
              1.15
              
              
              $
              0.15January
                  31, 2007
              
              $
              0.55
              
              
              $
              0.35October 31,
                  2006
              
              $
              0.60
              
              
              $
              0.25July 31,
                  2006
              
              $
              1.50
              
              
              $
              0.15April
                  30, 2006
              
              $
              18.00
              
              
              $
              1.10January
                  31, 2006
              
              $
              22.00
              
              
              $
              1.35October 31,
                  2005
              
              $
              1.50
              
              
              $
              1.35
 
  On
        October 5, 2007 the last sales price of our common stock was 0.31 per
        share.
  **Holders**
  The
        approximate number of holders of record of our common stock is 71.
  **Dividends**
  We
        have
        not paid any cash dividends on our equity security and our board of directors
        has no present intention of declaring any cash dividends.
 
 **Recent
        Sales of Securities**
 
 On
        March
        9, 2006, we issued 50,000 shares of our common stock to three unaffiliated
        consultants at a price per share of $15.00.
 
 On
        February 9, 2006, Manillo Investors acquired 4,000 shares of Series C Preferred
        Stock in consideration for $100,000.
 
 On
        May
        17, 2006, Manillo Investors acquired 9,460 shares of Series C Preferred Stock
        in
        consideration for $236,000.
 
 On
        June
        8, 2006, Manillo Investors acquired540 shares of Series C Preferred Stock
        in
        consideration for $13,500.
 
 On
        July
        21, 2006, Manillo Investors acquired 6,000 shares of Series C Preferred Stock
        in
        consideration for $150,000.
 
 On
        November 30, 2006 Mr. Pernia converted 252,813 shares of Series B Preferred
        stock into shares 23,216,697 of our common stock.
 
 On
        December 22, 2006, an unaffiliated third party converted 1,634 Series B
        Preferred Stock into 150,056 shares of our common stock.
  13
 *Index*
  On
        January 9, 2007, 110,150 shares of Series B Preferred Stock were transferred
        to
        110,150 shares of Series D Preferred Stock.
 
 On
        January 26, 2007, Mr. Wittenburg converted 3,000 shares of Series A Preferred
        Stock into 275,500 shares of class A common stock.
 
 On
        January 29, 2007, an unaffiliated third party converted 5,534 shares of Series
        B
        Preferred Stock into 508,206 shares of our common stock.
 
 On
        February 8, 2007, two unaffiliated third parties converted 87,840 shares
        of
        Series B Preferred stock into 8,066,654 shares of our common stock.
 
 On
        February 8, 2007, Mr. Goodman converted 2,500 shares of Series A Preferred
        Stock
        into 229,584 shares of our common stock.
 
 On
        February 26, 2007, Manillo Investors Ltd. converted 600 Series C Preferred
        Stock
        was converted into 549,902 shares of common stock.
 
 On
        March
        6, 2007, First Brampton Corporation converted 3,267 shares of Series A Preferred
        Stock into 300,020 shares of our class A common stock.
 
 On
        April
        25, 2007, an unaffiliated third party converted 2,203 shares of Series D
        Preferred Stock  into 293,329 shares of our common stock.
 
 On
        April
        27, 2007, Katherine Pernia converted 50,000 shares of Series A Preferred
        stock
        into 4,591,674 shares of our common stock.
 
 On
        May 4,
        2007, First Brampton Corporation converted 1,089 Series A Preferred Stock
        into
        100,007 of our class A common stock.
 
 On
        May 7,
        2007, an unaffiliated third party converted  545 shares of Series B
        Preferred Stock into 50,049 shares of our common stock.
 
 On
        May
        10, 2007, Mr. Goodman converted 5,000 shares of Series A Preferred Stock
        into
        459,168 shares of our common stock.
 
 On
        May
        10, 2007, two unaffiliated third parties exercised warrants to purchase an
        aggregate of 90,000 shares of our common stock at $0.20 per share.
 
 On
        May
        17, 2007, Mr. Wittenberg converted 8,113 shares of Series A Preferred Stock
        into
        745,045 class A common Stock.
 
 On
        June
        1, 2007, First Brampton Corporation converted 4,814 shares of Series A Preferred
        Stock into 442,086 shares of our class A common stock.
 
 On
        June
        5, 2007, an unaffiliated third party converted 2,178 shares of Series B
        Preferred Stock into 200,013 shares of our common stock.
 
 On
        June
        11, 2007, an unaffiliated third party converted 2,203 shares of Series D
        Preferred stock into 293,328 shares of our common stock.
 
 On
        June
        12, 2007, an unaffiliated third party converted 3,267 shares of Series B
        Preferred stock into 300,020 shares of our common stock.
 
 On
        June
        27, 2007, an unaffiliated third party converted 752 shares of Series D Preferred
        Stock into 100,128 shares of our common stock.
  14
 *Index*
  On
        July
        13, 2007, Mr. Copeland converted 100,000 shares of our Series A Preferred
        Stock
        into 9,183,348 shares of class A common stock.
 
 On
        July
        13, 2007, two unaffiliated third parties converted 35,636 shares of Series
        B
        preferred Stock into 3,272,578 shares of our common stock.
 
 On
        July
        17, 2007, an unaffiliated third party converted 2,178 shares of Series B
        Preferred Stock into 200,013 shares of our common stock.
 
 On
        July
        20, 2007, Sherman D. Pernia converted 126,398 shares of Series A Preferred
        Stock
        into 11,607,568 shares of our common stock.
 
 On
        July
        23, 2007, two unaffiliated third parties converted 1,110 shares of Series
        A
        Preferred into 101,935 shares of our common stock.
 
 On
        July
        26, 2007, Suez Holding GmbH converted 50,000 shares of Series A Preferred
        Stock
        into 4,591,674 shares of our common stock.
 
 On
        July
        26, 2007, Mr. Mark Copeland converted 69,173 shares of Series B Preferred
        Stock
        in to 6,352,397 shares of our common stock.
 
 On
        July
        27, 2007, First Brampton Corporation converted 5,638 shares of Series A
        Preferred Stock into 517,757 shares of class A common stock.
 
 On
        September 13, 2007, an unaffiliated third party converted 175,680 shares
        of
        Series B Preferred Stock into 16,172,912 shares of our common
        stock.
 
 On
        October 3, 2007, two unaffiliated third parties exercised warrants to purchase
        an aggregate of 25,000 shares of our common stock at $0.20 per
        share.
 
 On
        October 10, 2007, an unaffiliated third party exercised a warrant to purchase
        22,500 shares of our common stock at $0.20 per share.
 
 During
        August, September and October 2007, all of the holders of the all of the
        Company’s Class A Common Stock, Series A Preferred Stock, Series B Preferred
        Stock and Series D Preferred Stock converted into shares of the Company’s common
        stock.  Due to the conversions the Company exchanged (i) 9,939,101 shares
        of common stock for 9,939,101 shares of our Class A Common Stock, (ii)
        187,062,449 shares of our common stock for2,031,986 shares of Series A Preferred
        Stock, (iii) 58,041,041shares of our common stock for 660,132 shares of Series
        B
        Preferred Stock and (iv) 14,013,930 shares of our common stock for 104,992
        shares of Series D Preferred Stock.  Therefore, as of October 17, there are
        no longer any shares of Class A Common Stock, Series A Preferred Stock,
        Series B Preferred Stock and Series D Preferred Stock.
 
  **EQUITY
        COMPENSATION PLAN INFORMATION**
  The
        following table sets forth certain information, as of July 31, 2007, concerning
        securities authorized for issuance under the 2007 Stock Option Plan and other
        outstanding options, warrants and rights:
 
 Number
                  of Securities to be Issued Upon Exercise of Outstanding Options,
                  Warrants
                  & Rights
                (a)
              
              Weighted
                  Averaged Exercise Price of Outstanding Options, Warrants &
                  Rights
                (b)
              
              Number
                  of Securities Remaining Available for Future Issuance Under Equity
                  Compensation Plans (Excluding Securities Reflected in Column
                  (a)
                (c)Equity
                  compensation plans approved by security holders:None
              
              --
              
              --
              
              --Equity
                  compensations plans not approved by security holders:2007
                  Directors, Officers and Consultants Stock Option, Stock Warrant
                  and Stock
                  Award Plan
              
              450,000
                  (1)
              
              $0.3844
                  (2)
              
              19,550,000Total
              
              450,000
              
              $0.3844
              
              19,550,000
 ______________
 (1)  The
          Company has issued an aggregate of 450,000 shares to consultants during
          the
          fiscal year ended July 31, 2007.  No options, warrants or other rights
          were issued during this period.
 
 (2)  Calculated
          based on the fair market price of our common stock on the date of
          issuance.
 15
 *Index*
  **ITEM
        6MANAGEMENT'S
        DISCUSSION AND ANALYSIS OR PLAN OF
        OPERATION**
 
 **CRITICAL
        ACCOUNTING POLICIES**
 
 In
        December 2001, the Securities and Exchange Commission requested that all
        registrants discuss their "critical accounting policies" in
        management's discussion and analysis of financial condition and results of
        operations. The SEC indicated that a "critical accounting policy" is one
        that is both important to the portrayal of the company's financial
        condition and results and that requires management's most difficult,
        subjective or complex judgments. Such judgments are often the result of a
        need to make estimates about the effect of matters that are inherently
        uncertain. While Exobox’s significant accounting policies are more fully
        described in Note 1 to its financial statements included elsewhere in this
        prospectus, Exobox currently believes the following accounting policies to
        be critical:
 
 *Development
        Stage Company*
 
 Exobox
        is
        considered to be in the development stage as defined in Statement of
        Financial Accounting Standards (SFAS) No. 7, "Accounting and Reporting by
        Development Stage Enterprises." Exobox has devoted substantially all of its
        efforts to business planning, raising capital, research and development,
        recruiting management and technical staff, and acquiring operating
        assets.  We have experienced a loss since inception.
 
 *Start-up
        Costs*
 
 In
        accordance with the American Institute of Certified Public
        Accountants Statement of Position 98-5, "Reporting on the Costs of Start-up
        Activities", Exobox expenses all costs incurred in connection with its start-up
        and organization.
 
 *Research
        and Development*
 
 Research
        and development costs are related primarily to Exobox developing early
        prototypes. Research and development costs are expensed
        as incurred.
 
 *Income
        Taxes*
 
 The
        income tax benefit is computed on the pre-tax loss based on the current tax
        law. Deferred income taxes are recognized for the tax consequences in
        future years of differences between the tax basis of assets and
        liabilities
 and
        their
        financial reporting amounts at each year-end based on enacted tax laws and
        statutory tax rates. No benefit is reflected for the fiscal year ended July
        31,
        2007.
  16
 *Index*
  *Derivative
        Financial Instruments*
 
 We
        account for all derivatives financial instruments in accordance with SFAS
        No.
        133. Derivative financial instruments are recorded as liabilities in the
        consolidated balance sheet, measured at fair value. When available, quoted
        market prices are used in determining fair value. However, if quoted market
        prices are not available, we estimate fair value using either quoted market
        prices of financial instruments with similar characteristics or other valuation
        techniques.
 
 The
        value
        of the derivative liabilities relating to the convertible note issued in
        September 2006 in the financial statements are subject to the changes in
        the
        trading value of our common stock and other assumptions. As a result our
        financial statements may fluctuate from quarter to quarter based on factors
        such
        as trading value of our common stock, the amount of shares converted connection
        with the convertible note. Consequently, our consolidated financial position
        and
        results of operations may vary from quarter to quarter based on conditions
        other
        than our  operating revenue and expenses.
 
 Derivative
          financial instruments that are not designated as hedges or that do not
          meet the
          criteria for hedge accounting under SFAS No. 133 are recorded at fair value,
          with gains or losses reported currently in earnings. All derivative financial
          instruments held by us as July 31, 2007, were not designated as
          hedges.
 
 As
          a
          result of the Manillo Settlement, the derivative liability of $2,025,042
          will be
          reversed in the quarter endingOctober 31, 2007 and will no longer be reflected
          on our balance sheet at that date.  Additionally, for the three months
          ended October 31, 2007, we will have a one time gain that will offset in
          the
          entirety the loss on derivative for that period.
 
 
 **RESULTS
        OF OPERATIONS THE TWELVE MONTHS ENDED JULY 31, 2007 COMPARED TO JULY 31,
        2006**
 
 *Net
        Sales*. The Company has no sales since inception.
 
 *Research
        and Development Expenses*. The Company had no research and development
        expenses for the year ended July 31, 2007 and July 31, 2006. The Company
        has incurred $288,259 in research and development expenses since inception
        but prior to the current fiscal year ending July 31, 2006.
 
 *General
        and Administrative Expense**("G&A")*. The Company's G&A
        expenses for the years ended July 31, 2006 and 2007 decreased from
        $269,550 to $245,776. The increase was primarily due to the management of
        the company not being paid their full salary during the year.
 
 *Fair
        value of derivatives.*The derivative liability is in connection with the
        convertible notes issued in September 2006, which was $2 million for the
        year
        ended July 31, 2007.
  *Liquidity
        and Capital Resources.* As of July 31, 2007, we have current assets of
        $22,363 and current liabilities of $3,767,304, of which $2,025,042 is for
        a
        derivative liability and $105,000 is a convertible note payable.  In
        connection with the Manillo Settlement, the $105,000 convertible note has
        been
        replaced with a long term note with an original principal amount of
        $500,000.  Additionally, as a result of the Manillo Settlement, in
        which the Series C Preferred Stock was returned to us, the derivative liability
        of $2,025,042 will be reversed in the quarter ending October 31, 2007 and
        will
        no longer be reflected on our balance sheet on that date.  Our current
        liquidity position only allows us to meet nominal working capital
        needs.  We will need $750,000 to meet our working capital needs
        through fiscal 2008.  In order to fund our product development,
        including marketing and testing, we will need to raise at least an additional
        $7,000,000, Moreover, we anticipate that we will need additional capital in
        excess of $7,000,000 million to continue to fund and expand our
        business operations.
  Our
        inability to obtain immediate financing from third parties will negatively
        impact our ability to fund operations and execute our business
        plan.  Any failure to obtain such financing could force us to abandon
        or curtail our operations.  There is no assurance that we can raise
        additional capital from external sources, the failure of which could cause
        us to sell assets or curtail operations.  We have no credit
        facilities in place or commitments to provide any financing and we have
        historically relied on best efforts debt and equity
        funding.   Our auditors have issued a going concern opinion for
        our financial statements due to the substantial doubt about our ability to
        continue as a going concern.
  17
 *Index*
  Off
        Balance Sheet Arrangements
  None.
  Contractual
        Commitments
  None
  18
 *Index*
  **ITEM
        7. FINANCIAL STATEMENTS AND RELATED
        FOOTNOTES**
 
 
 **Report
        of Independent Registered Public Accounting Firm**
 
 To
        the
        Board of Directors
 Exobox
        Technologies Corp.
 (a
        development stage company)
 Houston,
        Texas
 
 We
        have
        audited the accompanying balance sheet of Exobox Technologies Corp. (the
        “Company”) as of July 31, 2007 and the related statements of operations,
        stockholdersholders’ deficit, and cash flows for the two years then ended and
        for the period from October 21, 2002 (inception) through July 31, 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 audits in accordance with standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. An audit includes examining,
        on a
        test basis, evidence supporting the amounts and disclosures in the financial
        statements. An audit also includes assessing the accounting principles used
        and
        significant estimates made by management, as well as evaluating the overall
        financial statement presentation. We believe that our audits provide a
        reasonable basis for our opinion.
 
 In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of Exobox Technologies Corp., as
        of
        July 31, 2007 and the results of its operations and its cash flows for the
        two
        years then ended in conformity with accounting principles generally accepted
        in
        the United States of America.
 
 The
        accompanying financial statements have been prepared assuming that Exobox
        Technologies Corp. will continue as a going concern. As discussed in Note
        2 to
        the financial statements, Exobox Technologies Corp. has suffered recurring
        losses from operations, has negative cash flow from operations, and has an
        accumulated deficit, which raises substantial doubt about its ability to
        continue as a going concern. Management’s plans regarding these matters also are
        described in Note 2. The financial statements do not include any adjustments
        that might result from the outcome of this uncertainty.
 
 As
        discussed in Note 9, the financial statements for the year ended July 31,
        2006
        have been restated.
 
 /s/
        Malone & Bailey, PC
 Malone
        & Bailey, PC
 www.malone-bailey.com
 Houston,
        Texas
 
 October
        29, 2007
  19
 *Index*
  EXOBOX
        TECHNOLOGIES CORP.
 (A
        DEVELOPMENT STAGE COMPANY)
 BALANCE
        SHEET
 July
        31,
        2007
 
 ASSETSCurrent
                  Assets:Cash
              
              $
              8,363Other
                  Current Assets
              
              
              14,000Total
                  Current Assets
              
              
              22,363Property
                  and equipment, net
              
              
              12,164Other
                  Assets:Patents
              
              
              67,233Intangibles,
                  net
              
              
              3,290TOTAL
                  ASSETS
              
              $
              105,050LIABILITIES
                  AND STOCKHOLDERS' EQUITYCurrent
                  Liabilities:Accounts
                  Payable
              
              $
              46,148Accounts
                  Payable-Stockholders
              
              
              4,461Accrued
                  Liabilities
              
              
              1,391,853Advances
                  from Stockholders
              
              
              194,800Convertible
                  Note Payable
              
              
              105,000Derivative
                  Liability
              
              
              2,025,042Total
                  Current Liabilities
              
              
              3,767,304STOCKHOLDERS'
                  EQUITY (DEFICIT)Preferred
                  stock:Series
                  A convertible preferred stock, $0.001 par, 2,500,000 shares
                  authorized,2,031,986 shares issued and outstanding
              
              
              2,032Series
                  B convertible preferred stock, $0.001 par, 2,000,000 shares
                  authorized,660,132 shares issued and outstanding
              
              
              661Series
                  C convertible preferred stock, $0.001 par, 20,000 shares authorized,19,400
                  shares issued and outstanding
              
              
              19Series
                  D convertible preferred stock, $0.001 par, 110,150 shares
                  authorized,104,992 shares issued and outstandingClass
                  A Common stock, $0.001 par value, 9,939,101 shares authorized,
                  9,939,101shares issued and outstanding at July 31,
                  2007
              
              
              9,939Common
                  stock, $0.001 par value, 490,060,899 shares authorized, 78,172,639shares
                  issued and outstanding at July 31, 2007
              
              
              78,173Additional
                  paid-in capital
              
              
              2,736,566Deficit
                  accumulated during development stage
              
              
              (6,489,749
              )Total
                  stockholders' equity (Deficit)
              
              
              (3,662,254
              )TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              105,050
  See
        accompanying notes to the financial statements
  20
 *Index*
  EXOBOX
        TECHNOLOGIES CORP.
 (A
        DEVELOPMENT STAGE COMPANY)
 STATEMENTS
        OF OPERATIONS
 For
        the
        Years Ended July 31, 2007 and 2006,
 and
        October 21, 2002 (Inception) to July 31, 2007
 
 Year
                  Ended July 31,
              
              
              Year
                  Ended July 31,
              
              
              October
                  21, 2002 (Inception) To July 31,2007
              
              
              2006
              
              
              2007(Restated)
              
              
              (Restated)Revenues
              
              $
              -
              
              
              $
              -
              
              
              $
              -Research
                  and Development
              
              
              -
              
              
              
              -
              
              
              
              288,259General
                  &Administrative
              
              
              245,776
              
              
              
              269,550
              
              
              
              559,609Depreciation
                  and amortization
              
              
              8,671
              
              
              
              4,972
              
              
              
              13,643Professional
                  fees
              
              
              200,202
              
              
              
              1,039,051
              
              
              
              1,239,253Payroll
                  expenses
              
              
              1,168,629
              
              
              
              728,608
              
              
              
              1,897,236Software
                  development expense
              
              
              243
              
              
              
              446,150
              
              
              
              446,393Loss
                  on Derivatives
              
              
              1,925,042
              
              
              
              -
              
              
              
              1,925,042Total
                  Operating Expenses
              
              
              3,548,563
              
              
              
              2,488,331
              
              
              
              6,369,435Loss
                  from Operations
              
              
              3,548,563
              
              
              
              2,488,331
              
              
              
              6,369,435Other
                  Income (Expenses)Interest
                  Expense
              
              
              (120,314
              )
              
              
              -
              
              
              
              (120,134
              )Total
                  Other Income (Expenses)
              
              
              (120,314
              )
              
              
              -
              
              
              
              (120,134
              )Loss
                  Before Income Taxes
              
              
              3,668,877
              
              
              
              2,488,331
              
              
              
              6,489,749Provision
                  for Income Taxes
              
              
              -
              
              
              
              -
              
              
              
              -Net
                  Loss
              
              $
              (3,668,877
              )
              
              $
              (2,488,331
              )
              
              $
              (6,489,749
              )Basic
                  and dilutedNet
                  loss per common share
              
              $
              (0.11
              )
              
              $
              (0.23
              )
              
              
              n/aWeighted
                  average shares outstanding
              
              
              34,275,475
              
              
              
              10,900,742
              
              
              
              n/a
 
 See
        accompanying notes to the financial statements
  21
 *Index*
  **EXOBOX
        TECHNOLOGIES CORP.**
 (A
        DEVELOPMENT STAGE COMPANY)
 STATEMENTS
        OF CASH FLOWS
 
 Year
                  Ended July 31,
              
              
              Year
                  Ended July 31,
              
              
              October
                  21, 2002 (Inception) to July 31,2007
              
              
              2006
              
              
              2007CASH
                  FLOWS FROM OPERATING ACTIVITIES
              
              
              
              
              (Restated)
              
              
              (Restated)Net
                  Loss
              
              $
              (3,668,877
              )
              
              $
              (2,488,331
              )
              
              $
              (6,489,749
              )Adjustments
                  to reconcile net loss to net cash used in operating
                  activities:Share-based
                  compensation
              
              
              -
              
              
              
              750,000
              
              
              
              750,000Warrant
                  issued for consulting services
              
              
              -
              
              
              
              12,495
              
              
              
              12,495Stock
                  issued for services
              
              
              173,000
              
              
              
              -
              
              
              
              173,000Depreciation
                  and amortization
              
              
              8,671
              
              
              
              4,972
              
              
              
              13,643Loss
                  on derivative
              
              
              2,030,042
              
              
              
              -
              
              
              
              2,030,042Changes
                  in operating assets and  liabilitiesOther
                  current assets
              
              
              (14,000
              )
              
              
              -
              
              
              
              (14,000
              )Accounts
                  payable
              
              
              (37,305
              )
              
              
              83,453
              
              
              
              46,148Accrued
                  expenses
              
              
              1,081,852
              
              
              
              310,001
              
              
              
              1,392,581Accounts
                  payables to stockholders
              
              
              4,461
              
              
              
              -
              
              
              
              4,461NET
                  CASH USED IN OPERATING ACTIVITIES
              
              
              (422,156
              )
              
              
              (1,327,410
              )
              
              
              (2,081,379
              )CASH
                  FLOW FROM INVESTING ACTIVITIESInvestment
                  in patents
              
              
              -
              
              
              
              (13,200
              )
              
              
              (67,233
              )Investment
                  in intangible assets
              
              
              -
              
              
              
              (7,700
              )
              
              
              (7,700
              )Investment
                  in property and equipment
              
              
              -
              
              
              
              (21,397
              )
              
              
              (21,397
              )NET
                  CASH USED IN INVESTING ACTIVITIES
              
              
              -
              
              
              
              (42,297
              )
              
              
              (96,330
              )CASH
                  FLOWS FROM FINANCING ACTIVITIESCapital
                  contributions
              
              
              -
              
              
              
              1,500,000
              
              
              
              1,874,000Advances
                  from stockholders
              
              
              260,262
              
              
              
              -
              
              
              
              266,712Proceeds
                  from warrants exercised
              
              
              18,000
              
              
              
              
              
              
              
              18,000Repayment
                  of advances from stockholders
              
              
              (65,462
              )
              
              
              (12,628
              )
              
              
              (72,640
              )Convertible
                  note proceeds
              
              
              100,000
              
              
              
              -
              
              
              
              100,000NET
                  CASH PROVIDED BY FINANCING ACTIVITIES
              
              
              312,800
              
              
              
              1,487,372
              
              
              
              2,186,072NET
                  CHANGE IN CASH AND CASH EQUIVALENTS
              
              
              (109,356
              )
              
              
              117,665
              
              
              
              8,363Cash
                  and cash equivalents at beginning of period
              
              
              117,719
              
              
              
              54
              
              
              
              -Cash
                  and cash equivalents at end of period
              
              $
              8,363
              
              
              $
              117,719
              
              
              $
              8,363SUPPLEMENTAL
                  DISCLOSURESCash
                  paid for interest
              
              $
              108,462
              
              
              $
              120
              
              
              $
              120Cash
                  paid for income taxes
              
              
              -
              
              
              
              -
              
              
              
              -NON-CASH
                  TRANSACTIONSConversion
                  of Preferred shares to Common Shares
              
              $
              76,654
              
              
              
              -
              
              
              $
              76,654
 
 See
        accompanying notes to the financial statements
  22
 *Index*
  EXOBOX
        TECHNOLOGIES CORP.
 (A
        DEVELOPMENT STAGE COMPANY)
 STATEMENTS
        OF STOCKHOLDERS’ DEFICIT
 October
        21, 2002, (inception) to July 31, 2007
 
 Members'
              
              
              
              
              
              
              
              
              *Series
                  A*
              
              
              *Series
                  B*
              
              
              *Series
                  C*
              
              
              *Series
                  D*
              
              
              Additional
              
              
              Accumulated
                  Deficit duringCapital
              
              
              *Common
                  Stock*
              
              
              *Preferred
                  Stock*
              
              
              *Preferred
                  Stock*
              
              
              *Preferred
                  Stock*
              
              
              *Preferred
                  Stock*
              
              
              Paid
                  in
              
              
              DevelopmentAmount
              
              
              Shares
              
              
              Amount
              
              
              Shares
              
              
              Amount
              
              
              Shares
              
              
              Amount
              
              
              Shares
              
              
              Amount
              
              
              Shares
              
              
              Amount
              
              
              Capital
              
              
              Stage
              
              
              TotalOctober 21,
                  2002 (LLC inception)
              
              $
              -
              
              
              
              -
              
              
              $
              -
              
              
              
              -
              
              
              $
              -
              
              
              
              -
              
              
              $
              -
              
              
              
              -
              
              
              $
              -
              
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              --Capital
                  Contribution by Members
              
              
              234,000
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              $
              234,000Net
                  Loss
              
              
              (167,747
              )
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              2,393
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (167,747
              )Balances,
                  July 31, 2003
              
              
              66,253
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              66,253Capital
                  Contribution by Members
              
              
              140,000
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              140,000June 28,
                  2004 (corporation inception)
              
              
              (206,253
              )
              
              
              10,867,500
              
              
              
              10,868
              
              
              
              2,392,915
              
              
              
              2,393
              
              
              
              1,120,930
              
              
              
              1,121
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              359,618
              
              
              
              (167,747
              )
              
              
              -Net
                  Loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (152,855
              )
              
              
              (152,855
              )Balance
                  July 31, 2004
              
              
              
              
              
              
              10,867,500
              
              
              
              10,868
              
              
              
              2,392,915
              
              
              
              2,393
              
              
              
              1,120,930
              
              
              
              1,121
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              359,618
              
              
              
              (320,602
              )
              
              
              53,398Net
                  Loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (11,939
              )
              
              
              (11,939
              )Balance
                  July 31, 2005
              
              
              
              
              
              
              10,867,500
              
              
              
              10,868
              
              
              
              2,392,915
              
              
              
              2,393
              
              
              
              1,120,930
              
              
              
              1,121
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              359,618
              
              
              
              (332,541
              )
              
              
              41,459Issuance
                  of capital stock series B in private placement for cash
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              110,150
              
              
              
              110
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              999,890
              
              
              
              
              
              
              
              1,000,000Shares
                  issued for consulting services
              
              
              
              
              
              
              50,000
              
              
              
              50
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              749,950
              
              
              
              
              
              
              
              750,000Issuance
                  of capital stock series C for cash under Security Purchase Agreement
                  w/  Manillo Investors, Ltd.
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              20,000
              
              
              
              20
              
              
              
              
              
              
              
              
              
              
              
              499,980
              
              
              
              
              
              
              
              500,000Warrant
                  Issued for consulting services
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              12,495
              
              
              
              
              
              
              
              12,495Net
                  Loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (2,488,331
              )
              
              
              (2,488,331
              )Balance
                  July 31, 2006 (restated)
              
              
              
              
              
              
              10,917,500
              
              
              
              10,918
              
              
              
              2,392,915
              
              
              
              2,393
              
              
              
              1,231,080
              
              
              
              1,231
              
              
              
              20,000
              
              
              
              20
              
              
              
              
              
              
              
              
              
              
              
              2,621,933
              
              
              
              (2,820,872
              )
              
              
              (184,377
              )Conversion
                  of Series B to Series D
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (110,150
              )
              
              
              (110
              )
              
              
              
              
              
              
              
              
              
              
              110,150
              
              
              
              110
              
              
              
              
              
              
              
              
              
              
              
              -Conversion
                  of Preferred to Common Stock
              
              
              
              
              
              
              76,654,240
              
              
              
              76,654
              
              
              
              (360,929
              )
              
              
              (361
              )
              
              
              (460,798
              )
              
              
              (460
              )
              
              
              (600
              )
              
              
              (1
              )
              
              
              (5,158
              )
              
              
              (5
              )
              
              
              (75,827
              )
              
              
              
              
              
              
              -Stock
                  issued for services
              
              
              
              
              
              
              450,000
              
              
              
              450
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              172,550
              
              
              
              
              
              
              
              173,000Stock
                  issued under exercise of warrants
              
              
              
              
              
              
              90,000
              
              
              
              90
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              17,910
              
              
              
              
              
              
              
              18,000Net
                  Loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (3,668,877
              )
              
              
              (3,668,877
              )Balance
                  July 31, 2007
              
              $
              -
              
              
              
              88,111,740
              
              
              $
              88,112
              
              
              
              2,031,986
              
              
              $
              2,032
              
              
              
              660,132
              
              
              $
              661
              
              
              
              19,400
              
              
              $
              19
              
              
              
              104,992
              
              
              $
              105
              
              
              $
              2,736,566
              
              
              $
              (6,489,749
              )
              
              
              (3,662,254
              )
 
 See
        accompanying notes to the financial statements
  23
 *Index*
  EXOBOX
        TECHNOLOGIES CORP.
 (A
        DEVELOPMENT STAGE COMPANY)
 NOTES
        TO
        THE FINANCIAL STATEMENTS
 
 NOTE
        1 -
        SUMMARY OF ACCOUNTING POLICIES
 
 Organization
        and Nature of Operations. Exobox Technologies Corp. (formerly known as Exobox
        Technologies LLC), referred to as “Exobox” or the “Company”, was incorporated in
        Delaware on June 28, 2004 to patent and market proprietary internet security
        technology. Exobox Technologies LLC was incorporated in Texas on October
        21,
        2002 (inception) and legally dissolved with the formation of Exobox Technologies
        Corp. Kilis, Inc. was originally incorporated in Nevada on December 8,
        1999.  OnJune 22, 2005, Kilis, Inc. changed its
        name to JinPin, Inc.  On September 14, 2005, JinPin, Inc. changed its
        name to Exobox Technologies Corp.  On September 15, 2005, Exobox
        (Nevada) acquired Exobox Technologies Corp., a Delaware corporation (Exobox)
        in
        exchange for 3,513,845 shares of Exobox (Nevada) convertible preferred stock
        (2,392,915 shares of Series A convertible preferred stock and 1,120,930 shares
        of Series B convertible preferred stock).  On the effective date, all
        of the issued and outstanding shares of common stock of Exobox (Nevada) were
        converted into the 3,513,845 shares of preferred stock of Exobox (Nevada)
        with
        the Exobox shareholders owning 100% of Exobox’s outstanding shares of preferred
        stock.
 
 Exobox
        is
        a developer of innovative enterprise and home user endpoint and server security
        software products, headquartered in Houston, Texas. Exobox’s patented and
        patent-pending technology is based on enforcing appropriate system and
        application behaviors by isolating and controlling real-time access to the
        file
        system, memory, network and inter-process communication with the goal to
        insure
        that the security implemented is proactive, not reactive. Exobox’s technology
        creates an isolated user environment that protects the host environment from
        all
        unauthorized modifications by treating all data from all sources as if it
        is
        malicious. Traditional computer security, such as common anti-virus and
        anti-spy/ad-ware, tends to rely on a data-base of known signatures, rendering
        it
        capable only of attempting to provide security against perpetually updated
        lists
        of previously identified threats. Exobox’s technology integrates into the
        operating system, which enables it to provide protection for the user’s computer
        and network.
 
 Use
        of
        Estimates. In preparing financial statements, management makes estimates
        and
        assumptions that affect the reported amounts of assets and liabilities in
        the
        balance sheet and expenses in the statement of expenses. Actual results could
        differ from those estimates. Areas involving the use of significant estimates
        include revenue recognition; estimation of our allowance for doubtful accounts
        and billing adjustments; valuation and recoverability of long-lived assets,
        including depreciation, impairment, amortization and intangible assets;
        determination of technological feasibility and capitalization of software
        development costs; and income taxes.
 
 Property
        and Equipment.  Property and Equipment is stated at cost and
        depreciated using the straight-line method over the shorter of the estimated
        useful life of the asset or the least term, ranging from three to five
        years.  Significant improvements and betterments are
        capitalized.  Routine repairs and maintenance are expensed when
        incurred.  When property and equipment is sold or otherwise disposed
        of, the asset account and related accumulated depreciation account are relieved,
        and any gain or loss is included in operations.
 
 Impairment
        of Long−lived assets. Exobox periodically reviews the carrying value of
        intangible assets not subject to amortization to determine whether impairment
        may exist. Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill
        and Other Intangible Assets”, requires that certain intangible assets be
        assessed annually for impairment using fair value measurement techniques.
        The
        impairment test for other intangible assets not subject to amortization consists
        of a comparison of the fair value of the intangible asset with its carrying
        value. If the carrying value of the intangible asset exceeds its fair value,
        an
        impairment loss is recognized in an amount equal to that excess. The estimates
        of fair value of intangible assets not subject to amortization are determined
        using various discounted cash flow valuation methodologies. Significant
        assumptions are inherent in this process, including estimates of discount
        rates.
        Discount rate assumptions are based on an assessment of the risk inherent
        in the
        respective intangible assets.
 
 Revenue
        Recognition. Exobox recognizes revenue when persuasive evidence of an
        arrangement exists, services have been rendered, the sales price is fixed
        or
        determinable, and collectability is reasonably assured. For the period from
        Inception to July 31, 2007, Exobox had no revenues.
  24
 *Index*
  Income
        Taxes. Income taxes are computed using the asset and liability method. Under
        the
        asset and liability method, deferred income tax assets and liabilities are
        determined based on the differences between the financial reporting and tax
        bases of assets and liabilities and are measured using the currently enacted
        tax
        rates and laws. A valuation allowance is provided for the amount of deferred
        tax
        assets that, based on available evidence, are not expected to be
        realized.
 
 Earnings
        Per Share.  Basic and diluted earnings or loss per share (EPS) amounts
        in the financial statements are computed in accordance with SFAS No. 128,
        "Earnings Per Share." Basic EPS is based on the weighted average number of
        common shares outstanding. Diluted EPS is based on the weighted average number
        of common shares outstanding and dilutive common stock equivalents. Basic
        EPS is
        computed by dividing net income/loss available to common stockholders
        (numerator) by the weighted average number of common shares outstanding
        (denominator) during the period. Weighted average number of shares used to
        calculate basic and diluted loss per share is considered the same as the
        effect
        of dilutive shares is anti-dilutive.
 
 Fair
        Value of Financial Instruments.  Fair value is described as the amount
        at which the instrument could be exchanged in a current transaction between
        informed willing parties, other than a forced liquidation.  Cash and
        cash equivalents, accounts receivable and payable, accrued expenses and other
        current liabilities are reported on the balance sheet at carrying value which
        approximates fair value due to the short-term maturities of these
        instruments.  Exobox does not have any off balance sheet financial
        instruments.
 
 Derivatives.  Exobox
        has used a financial derivative instrument on our debt outstanding. We account
        for our derivative instruments under the provisions of Statement of Financial
        Accounts Standard ("SFAS") No. 133, “Accounting for Derivative Instruments and
        Hedging Activities.” Under this statement, derivative instruments, other than
        those meeting the normal purchases and sales exception or other exceptions,
        are
        recorded on our balance sheet as either assets or liabilities measured at
        fair
        value determined by reference to published future market prices and interest
        rates with changes in the fair value of derivatives recorded in net income
        or
        other comprehensive income as appropriate.
 
 Research
        and Product Development. Research and product development includes all research
        and development expenses and software development costs. We expense all research
        and development expenses as incurred. We expense all software development
        costs
        associated with establishing technological feasibility, which we define as
        completion of beta testing. Because of the insignificant amount of costs
        incurred between completion of beta testing and general customer release,
        we
        have not capitalized any software development costs in the accompanying
        financial statements.
 
 Recent
        Accounting Pronouncements. On February 1, 2006, Exobox adopted SFAS No. 123(R),
        “Share-Based Payment.” SFAS 123(R) replaced SFAS No. 123 and supersedes APB
        Opinion No. 25. SFAS 123(R) requires all share-based payments to employees,
        including grants of employee stock options, to be recognized in the financial
        statements based upon their fair values. The pro forma disclosures
        previously permitted under SFAS No. 123 are no longer an alternative to
        financial statement recognition. As of July 31, 2007, Exobox had no outstanding
        employee stock options.
 
 In
        September 2006, FASB issued SFAS 157 ‘Fair Value Measurements’. This Statement
        defines fair value, establishes a framework for measuring fair value in
        generally accepted accounting principles (GAAP), and expands disclosures
        about
        fair value measurements. This Statement applies under other accounting
        pronouncements that require or permit fair value measurements, the Board
        having
        previously concluded in those accounting pronouncements that fair value is
        the
        relevant measurement attribute. Accordingly, this Statement does not require
        any
        new fair value measurements. However, for some entities, the application
        of this
        Statement will change current practice. This Statement is effective for
        financial statements issued for fiscal years beginning after November 15,
        2007,
        and interim periods within those fiscal years. The Company’s management is
        currently evaluating the effect of this pronouncement on the financial
        statements.
 
 In
        July
        2006, the FASB released FASB Interpretation No. 48, Accounting for Uncertainty
        in Income Taxes, an interpretation of FASB Statement No. 109 (FIN 48) FIN
        48
        clarifies the accounting and reporting for uncertainties in income tax law.
        This
        interpretation prescribes a comprehensive model for the financial statement
        recognition, measurement, presentation and disclosure of uncertain tax positions
        taken or expected to be taken in income tax returns. This statement is effective
        for fiscal years beginning after December 15, 2006. The Company’s management is
        currently evaluating the effect of the adoption of FIN 48.
  25
 *Index*
  In
        February 2006, FASB issued SFAS No. 155, “Accounting for Certain Hybrid
        Financial Instruments.” SFAS No. 155 amends SFAS No 133, “Accounting for
        Derivative Instruments and Hedging Activities,” and SFAF No. 140, “Accounting
        for Transfers and Servicing of Financial Assets and Extinguishments of
        Liabilities.” SFAS No. 155, permits fair value remeasurement for any hybrid
        financial instrument that contains an embedded derivative that otherwise
        would
        require bifurcation, clarifies which interest-only strips and principal-only
        strips are not subject to the requirements of SFAS No. 133, establishes a
        requirement to evaluate interest in securitized financial assets to identify
        interests that are freestanding derivatives or that are hybrid financial
        instruments that contain an embedded derivative requiring bifurcation, clarifies
        that concentrations of credit risk in the form of subordination are not embedded
        derivatives, and amends SFAS No. 140 to eliminate the prohibition on the
        qualifying special-purpose entity from holding a derivative financial instrument
        that pertains to a beneficial interest other than another derivative financial
        instrument. The Company’s management is currently evaluating the effect of this
        pronouncement on the financial statements.
 
 In
        May
        2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections".
        SFAS No. 154 replaces APB Opinion No. 20 "Accounting Changes" and SFAS No.
        3,
        "Reporting Accounting Changes in Interim Financial Statements". SFAS No.
        154
        requires retrospective application to prior periods' financial statements
        of
        changes in accounting principle, unless it is impracticable to determine
        either
        the period-specific effects or the cumulative effect of the change. The adoption
        of SFAS No. 154 did not impact the Company's consolidated financial
        statements.
 
 NOTE
        2 -
        GOING CONCERN
 
 From
        Inception to July 31, 2007, Exobox has accumulated losses of $6,489,749.
        The
        ability of Exobox to emerge from the development stage with respect to any
        planned principal business activity is dependent upon its success in
        raising additional equity financing and/or attaining profitable operations.
        Management has plans to seek additional capital. There is no guarantee that
        Exobox will be able to complete any of the above objectives. These factors
        raise substantial doubt regarding Exobox's ability to continue as a going
        concern.
 
 NOTE
        3 –
PATENTS
 
 Exobox
        has two technological inventions with patents pending in United States and
        throughout the world.   The rights and interest include, among
        other things, (i) the patent applications and any changes or amendments thereto,
        (ii) the invention, (iii) the technical information, trade secrets, identities
        of customers, studies, plans, drawings, blueprints and specifications,
        production methods, (iv) the embodiment of any claim described and claimed
        in
        any valid claim of the patent application, (v) right to file foreign patent
        applications, and (vi) any all patents resulting from current patent
        applications.
 
 Patents
        are mainly comprised of legal services paid to a shareholder and patent
        application fees.  No amortization will be recorded until the patents
        have been granted.
 
 NOTE
        4 -
        INCOME TAXES
 
 Exobox
        has incurred net losses since inception and, therefore, has no tax
        liability.  The net deferred tax asset generated by the loss
        carry-forward has been fully reserved. The cumulative net operating loss
        carry-forward is approximately $2 million at July 31, 2007, and will expire
        in
        the years 2023 through 2025.
 
 At
        July
        31, 2007, deferred tax assets consisted of the following:
 
 Deferred
                  tax assets
              
              $
              750,000Valuation
                  allowance
              
              
              (750,000
              )Net
                  deferred taxes
              
              $
              0
 
 NOTE
        5 –
RELATED PARTIES
 
 Accounts
        payable to stockholders represent amounts owed to stockholders primarily
        for
        reimbursement of general and administrative costs paid on behalf of
        Exobox.  Accounts payable to stockholders totaled $4,461 at July 31,
        2007.
  26
 *Index*
  Certain
        of Exobox’s stockholders have advanced cash to the company for working capital
        purposes.  The advances are payable upon demand and do not accrue
        interest.  Advances totaled $194,800 at July 31, 2007.
 
 Exobox
        paid consulting fees to certain executive officers and stockholders totaling
        $0
        during the year ended July 31, 2007and $6,000 in related party consulting
        fees
        during the year ended July 31, 2006.
 
 NOTE
        6 –
COMMITMENTS
 
 Beginning
        in September 2004, Exobox leased an office in Houston, Texas from a third
        party
        for $500 per month.  The lease is on a month-to-month
        basis.  Rent expense totaled $6,000 for the year ended July 31,
        2007.
  NOTE
        7 –
STOCKHOLDERS’ EQUITY
 
 Exobox
        is
        authorized to issue 500,000,000 shares of Class A common stock and undesignated
        common stock, $.001 par value, and 4,630,150 shares of preferred stock, $.001
        par value, of which 2,500,000 shares have been designated Series A convertible
        preferred stock, 2,000,000 shares have been designated Series B convertible
        preferred stock, 20,000 shares have been designated Series C convertible
        preferred stock and 110,150 shares have been designated Series D convertible
        preferred stock.
 
 Common
        Stock
 
 Holders
        of common stock are entitled to one vote per share on all matters to be voted
        upon by the shareholders and holders of Class A common stock are entitled
        to 100
        votes per share. Except as otherwise provided by law, the holders of shares
        of
        common stock vote as one class.
 
 Except
        for the voting rights for Class A common stock, each share of common stock
        shall
        have the same relative powers, preferences and rights as, and shall be identical
        in all respects with, all our other shares of common stock.
 
 Shares
        of
        Class A common stock convert to shares of common stock in certain circumstances,
        including (i) upon sale or other transfer, (ii) at the time the holder of
        shares
        of Class A common stock ceases to be affiliated with our company, and (iii)
        upon
        the sale of the shares in a registered public offering.
 
 Preferred
        Stock
 
 Exobox
        is
        authorized to issue 4,630,150 shares of preferred stock in one or more
        series.
 
 Series
        A
        Convertible Preferred Stock. Exobox designated 2,500,000 shares as “Series A
        convertible preferred stock." The shares of the Series A preferred stock
        rank
        prior to the common stock, and prior to any class or series of capital stock
        now
        outstanding or hereafter created. No dividends shall be payable to the holder
        of
        shares of Series A preferred stock, except dividends in liquidation. Each
        share
        of Series A preferred stock has the number of votes equal to the number
        authorized by the shares of Class A common stock into which such share of
        Series
        A preferred stock is then convertible. Except as otherwise required by law,
        the
        holders of shares of common stock and Series A preferred stock shall vote
        together and not as separate classes.
 
 Series
        A
        preferred stock is convertible 12 months after issue into common
        stock.  The shares of Series A preferred, along with the shares of
        Series B preferred, are convertible into 92% of the total outstanding common
        before the issuance of any shares of Series C preferred stock. The holders
        of
        Series A preferred vote on an as converted basis.
 
 Series
        B
        Preferred Stock. Exobox has designated 2,000,000 shares as Series B convertible
        preferred stock. The shares of the Series B preferred stock rank prior to
        the
        common stock; and prior to any class or series of capital stock now outstanding
        or hereafter created. No dividends shall be payable to the holder of shares
        of
        Series B preferred stock, except dividends in liquidation. Each share of
        outstanding Series B preferred stock has the number of votes equal to the
        number
        of shares of common stock into which such share of Series B preferred stock
        is
        then convertible. Except as otherwise required by law or by the Articles,
        the
        holders of shares of common stock and Series B preferred stock shall vote
        together and not as separate classes.
  27
 *Index*
  Series
        B
        preferred stock is convertible 12 months after issue into common stock. The
        shares of Series B preferred, along with the shares of Series A preferred,
        are
        convertible into 92% of the total outstanding common before the issuance
        of any
        shares of Series C preferred stock. The holders of Series B preferred vote
        on an
        as converted basis.
 
 Series
        C
        Preferred Stock. Exobox has designated 20,000 shares as Series C convertible
        preferred stock each in the face amount of $25. No dividends shall be payable
        to
        the holders of shares of Series C preferred stock.
 
 The
        Shares of Series C preferred stock are collectively convertible into five
        (5%)
        percent of the total number of outstanding shares of all classes of common
        stock
        immediately after conversion of all outstanding shares of Series A and Series
        Bpreferred stock.
 
 Series
        D
        Preferred Stock. Exobox has designated 110,150 shares as Series D convertible
        preferred stock each in the face amount of $0.001. No dividends shall be
        payable
        to the holders of shares of Series D preferred stock.
 
 The
        Shares of Series D preferred stock are collectively convertible into 4.00064800%
        of the total number of outstanding shares of all classes of common stock
        immediately after conversion of all outstanding shares of Series A, Series
        B,
        and Series C preferred stock.
 
 Stock
        Option, Stock Warrant and Stock Award Plan
 
 On
        September 15, 2005, Exobox adopted a stock option, stock warrant and stock
        award
        plan for officers, directors, consultants and key employees of Exobox. Exobox
        will reserve 1,630,125 shares of common stock, warrants, options, preferred
        stock or any combination thereof for the plan.
 
 On
        June
        18, 2007 Exobox filed with the SEC an S-8 registration statement registering
        20,000,000 shares reserved for officers, directors, consultants and key
        employees of Exobox.
 
 WARRANTS
 At
        July
        31, 2007, Exobox had outstanding and exercisable warrants to purchase an
        aggregate of 4,460,000 shares of
 common
        stock. The weighted average remaining life is 3.26 years and the weighted
        average price per share is $0.20 per share as follows:
 The
        status of the warrants as of July 31, 2007, is as follows:
 
 Warrants
                  Outstanding and Exercisable
              
              Warrants
              
              
              Weighted
                  Average Exercise PriceOUTSTANDING,
                  July 31, 2005
              
              
              -
              
              
              
              -Granted
              
              
              4,550,000
              
              
              $
              0.20Expired
              
              
              -
              
              
              
              -Exercised
              
              
              -
              
              
              
              -OUTSTANDING,
                  July 31, 2006
              
              
              4,550,000
              
              
              $
              0.20Granted
              
              
              -
              
              
              
              -Expired
              
              
              -
              
              
              
              -Exercised
              
              
              (90,000
              )
              
              $
              0.20OUTSTANDING,
                  July 31, 2007
              
              
              4,460,000
              
              
              $
              0.20
 
 Following
        is the details of warrants outstanding as of July 31, 2007
 
 Number
                  of Common Stock Equivalents
              
              Expiration
                  Date
              
              Remaining
                  Contracted Life (Years)
              
              
              Exercise
                  Price4,410,000
              
              10/31/2010
              
              
              3.25
              
              
              $
              0.2050,000
              
              7/31/2011
              
              
              4
              
              
              $
              0.25
  28
 *Index*
  For
        the
        year ended July 31, 2007, 90,000 warrants were exercised at an exercise price
        of
        $0.20 per share for total proceeds of $18,000.  Subsequent to July 31,
        2007, 67,500 warrants were exercised at an exercise price of $0.20 per share
        for
        total proceeds of $13,500.
 
 Note
        Payable
 
 On
        September 14, 2006, Exobox received $100,000 cash from a Preferred Shareholder
        in exchange for a 10% Convertible Promissory Note for $100,000 due on January
        1,
        2007. The conversion option of this note was determined to be a
        derivative.  The note payable was in default at July 31, 2007and was
        subsequently cancelled as detailed below. (See Note 8-Subsequent
        Events).
 
 NOTE
        8 –
SUBSEQUENT EVENTS
 
 During
        August, September and October 2007, all of the holders of the all of the
        Company’s Class A Common Stock, Series A Preferred Stock, Series B Preferred
        Stock and Series D Preferred Stock converted into shares of the Company’s common
        stock.  Due to the conversions the Company exchanged (i) 9,939,101 shares
        of common stock for 9,939,101 shares of our Class A Common Stock, (ii)
        187,062,449 shares of our common stock for2,031,986 shares of Series A Preferred
        Stock, (iii) 58,041,041shares of our common stock for 660,132 shares of Series
        B
        Preferred Stock and (iv) 14,013,930 shares of our common stock for 104,992
        shares of Series D Preferred Stock.  Therefore, as of October 17, there are
        no longer any shares of Class A Common Stock, Series A Preferred Stock,
        Series B Preferred Stock and Series D Preferred Stock.
 
 Effective
        September 10, 2007, we entered into a settlement agreement and mutual
        release with Manillo Investments, Ltd (“Manillo Settlement”), pursuant to which
        we agreed to issue Manillo Investment, Ltd a new promissory note in the
        principal amount of $500,000 with principal and accrued interest due in five
        years in exchange for Manillo Investment, Ltd. (i) cancelling a convertible
        note
        with an outstanding balance as of July 31, 2007 of $105,000, (ii) terminating
        the securities purchase agreement issued in connection with the convertible
        note, and (iii) assigning the Series C Preferred Stock to
        us.  Therefore as a result of the Manillo Settlement, there are no
        Series C Preferred Stock outstanding.
 
 Mr.
        Dillon has $292,000 of accrued salary through July 31, 2007 and has agreed
        to be
        paid in cash of 15% or $43,800 and 85% in Company common stock valued on
        the day
        the Board of Directors approves the plan.
 
 Mr.
        Copeland has $292,000 of accrued salary through July 31, 2007 and has agreed
        to
        be paid in cash of 15% or $43,800 and 85% in Company common stock valued
        on the
        day the Board of Directors approves the plan.
 
 Mr.
        Wittenburg has $292,000 of accrued salary through July 31, 2007 and has agreed
        to be paid in cash of 15% or $43,800 and 85% in Company common stock valued
        on
        the day the Board of Directors approves the plan.
 
 Mr.
        Pernia has $292,000 of accrued
        salary through July 31, 2007 and has agreed to be paid in cash of 15% or
        $43,800
        and 85% in Company common stock valued on the day the Board of Directors
        approves the plan.
 
 Mr.
        Wirtz has $176,000 of accrued
        salary through July 31, 2007 and has agreed to be paid in cash of 15% or
        $26,400
        and 85% in Company common stock valued on the day the Board of Directors
        approves the plan.
 
 NOTE
        9--RESTATEMENT
 
 The
        Company determined that its compensation expense was understated by $322,500
        in
        the year ended July 31, 2006 and needed to accrue in 2006 an amount of
        $322,500.  The Company also restated $12,500 related to compensation
        expense which was over accrued in the prior year.
 
 Below
        is
        the detailed effect of the restatement:
  29
 *Index*
 
 2006
              
              
              2006As
                  Reported
              
              
              As
                  RestatedBalance
                  SheetASSETSCurrent
                  Assets
              
              $
              117,719
              
              
              $
              117,719Non-current
                  Assets
              
              $
              91,357
              
              
              $
              91,357TOTAL
                  ASSETS
              
              $
              209,076
              
              
              $
              209,076LIABILITIESCurrent
                  Liabilities
              
              $
              83,453
              
              
              $
              393,453Non-current
                  Liabilities
              
              
              -
              
              
              
              -Total
                  Liabilities
              
              $
              83,453
              
              
              $
              393,453STOCKHOLDERS'
                  EQUITYCapital
                  Stock
              
              $
              14,562
              
              
              $
              14,562Additional
                  Paid-in capital
              
              $
              2,621,933
              
              
              $
              2,621,933Accumulated
                  Deficit
              
              $
              (2,510,872
              )
              
              $
              (2,820,872
              )TOTAL
                  STOCKHOLDERS' EQUITY
              
              $
              125,623
              
              
              $
              (184,377
              )TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              209,076
              
              
              $
              209,076Statement
                  of OperationsNet
                  Revenue
              
              
              -
              
              
              
              -Total
                  Operating Expenses
              
              $
              2,178,331
              
              
              $
              2,488,331Loss
                  from Operations
              
              $
              (2,178,331
              )
              
              $
              (2,488,331
              )Other
                  Expenses
              
              
              -
              
              
              
              -Loss
                  before Income Taxes
              
              $
              (2,178,331
              )
              
              $
              (2,488,331
              )Provision
                  for Income Taxes
              
              
              -
              
              
              
              -Net
                  Loss
              
              $
              (2,178,331
              )
              
              $
              (2,488,331
              )Earnings
                  (Loss) per common share (basic and diluted)
              
              $
              (0.20
              )
              
              $
              (0.23
              )Weighted
                  averages shares outstanding
              
              
              10,900,742
              
              
              
              10,900,742STATEMENTS
                  OF CASH FLOWSNet
                  Income (Loss)
              
              $
              (2,178,331
              )
              
              $
              (2,488,331
              )Net
                  cash used in operating activities
              
              $
              (1,327,410
              )
              
              $
              (1,327,410
              )Net
                  cash used in investing activities
              
              $
              (42,297
              )
              
              $
              (42,297
              )Net
                  cash provided by financing activities
              
              $
              1,487,372
              
              
              $
              1,487,372Net
                  decrease in cash and cash equivalents
              
              $
              117,665
              
              
              $
              117,665
 
 
 **ITEM
        8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
        AND
        FINANCIAL DISCLOSURE**
 
 None
 
 **ITEM
        8A. CONTROLS AND PROCEDURES**
 
 We
        have
        carried out an evaluation, under the supervision and with the participation
        of our management, including our Chief Executive Officer (the "CEO") and
        our Chief Financial Officer (the "CFO"), of the effectiveness of the design
        and operation of our disclosure controls and procedures (as defined in Rule
        13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
        amended (the "Act")) as of the end of the fiscal quarter covered by this
        report. Based upon that evaluation, our CEO and CFO concluded that our
        disclosure controls and procedures are not effective in providing
        reasonable assurance that (a) the information required to be disclosed by
        us in the reports that we file or submit under the Act is recorded,
        processed, summarized and reported within the time periods specified in the
        Securities and Exchange Commission's rules and forms, and (b) such
        information is accumulated and communicated to our management, including
        our CEO and CFO, as appropriate to allow timely decisions regarding
        required disclosure. Specifically, our independent auditor
        identified weaknesses in our disclosure controls related to valuing and
        accounting for share based payments, derivative financial instruments and
        accrued expenses. We plan to remediate this deficiency in disclosure
        controls by increasing the supervision and training of accounting
        employees.
  30
 *Index*
  There
        has
        been no change in our internal control over financial reporting during the
        fiscal year covered by this report that has materially affected, or is
        reasonably likely to materially affect, our internal control over financial
        reporting
 
 **ITEM
        8B OTHER INFORMATION**
 
 There
        is
        no information required to be disclosed in a report Form 8-K during the fourth
        quarter of the year covered by this Form 10-KSB, but not reported on a Form
        8-K.
 
 **PART
        III**
 
 **ITEM
        9. DIRECTORS AND EXECUTIVE OFFICERS OF THE
        REGISTRANT**
 
 **Directors
        and Executive Officers**.
 
 The
        position(s) held by each of our executive officers and Directors as of July
        31,
        2007 are shown in the following table. Biographical information for each
        is set
        forth following the table. Each Director serves until a successor is elected
        and
        has qualified.
 
 Name
              Age
              
              PositionRobert
                  B. Dillon
              57
              
              President,
                  Chief Executive Officer and Chairman of the BoardScott
                  Copeland
              41
              
              Vice
                  President of Operations and DirectorMichael
                  Wittenburg
              59
              
              Vice
                  President of Business Development, Sec., Treasurer and
                  DirectorMarc
                  Pernia
              40
              
              Chief
                  Product Development Administrator and DirectorMichael
                  G. Wirtz
              48
              
              Vice
                  President-Chief Financial OfficerRichard
                  A. Evans, M.D.
              63
              
              Director
 
 *Robert
        B. Dillon*, a 1971 graduate of the University of Texas and a 1974 graduate
        of the University of Texas School of Law, is a practicing attorney and seasoned
        executive with thirty (30) years of litigation and transactional
        experience.  Mr. Dillon has served as CEO, President and Chairman of
        the Board since April 2004.  Prior thereto, Mr. Dillon was engaged in
        the private practice of law.
 
 *Scott
        Copeland*, a co-founder of Exobox and co-inventor of its technology, is an
        expert programmer with world-wide experience in internet security gained
        during
        his employment with Compaq, Gateway, Matrix and Axis Host.  Mr.
        Copeland has served as vice president and director since 2002. Prior to that
        time, Mr. Copeland was a self-employed computer consultant.
  *Michael
        Wittenburg* has served as vice president of business development, secretary,
        and director since September 2005.  From 2003 to 2005, Mr. Wittenburg
        was Regional Vice President   with Master Plan.  From
        2002 to 2003, Mr. Wittenburg was Vice President of New Business Ventures
        for
        U.S. Health Works. Mr. Wittenburg earned a B.A. from the
        Warburg College and management training at the University of Iowa and
        Harvard University. He is an experienced and successful marketing and
        management professional with over 20 years of responsibility for marketing
        products internationally for such companies as Dornier Medical, a subsidiary
        of
        Daimler Benz A.G., Stuttgart, Germany; Edap Technomed Inc., Lyon France and
        PET
        (Positron Emission Tomography) Scans of America.
 
 *Marc
        Pernia* has served as chief product development administrator and director
        since July 2003.  From 1999 to 2002, Mr. Pernia was a Senior Unix
        Systems Administrator with Electronic Arts.   Mr. Pernia is a
        Senior Unix Systems Administrator with an A.S. degree in Computer Science
        from
        Foothill College in 1994 and Computer Science studies at Stanford University,
        has extensive computer systems program development and administrative experience
        in the industry over the last 10 years for such Silicon Valley entities as
        Electronic Arts, Mind Source, the SETI Institute and the NASA Ames Research
        Center, as well as considerable experience in the configuration and maintenance
        of such software applications as Veritas, Weblogic, Netscape, iPlanet, Marimba,
        LDAP and *SQL, Tomcat, Apache and WebX.
  31
 *Index*
  *Michael
        G. Wirtz* has served as vice president and chief financial officer since
        2005.  Prior to working with the Company, Mr. Wirtz was self
        employed.  Mr. Wirtz is a 1984 MBA graduate of
        Texas Tech University who also earned a B.S. degree in Accounting from
        the University of Mary. He is a financial professional with experience as
        a
        corporate comptroller for a group of marine companies and previously managed
        another public corporation.
 
 *Richard
        A. Evans, M.D.* has served as a director since 2005.  Mr. Evans is
        self employed and has been a practicing physician for the last 5 years
        .  Mr. Evans received his Bachelor of Arts degree from
        Rice University in Houston, and his Doctor of Medicine and Master of
        Science (physiology and immunology) degrees from Tulane University School
        of
        Medicine in New Orleans. He pursued specialty training in general surgery
        at the
        University of California, School of Medicine, San Francisco and at Stanford
        University School of Medicine in Palo Alto. Dr. Evans completed his general
        surgery training at St. Joseph Hospital in Houston. This included training
        at the University of Texas M. D. Anderson Cancer Center and a one year
        fellowship in surgical oncology working under world renowned cancer specialist,
        Dr. John S. Stehlin, Jr. Dr. Evans maintains a private practice in oncology
        and
        alternative medicine in Houston, Texas. He founded the
        Texas Cancer Center, a 501(c)(3) nonprofit organization in
        1998.
 
 **Code
        of Ethics for the CEO, CFO and Senior Financial Officers**
 
 In
        2005,
        in accordance with SEC rules, the Board of Directors adopted the Code of
        Business Conduct and Ethics. The Board of Directors believes that each officer,
        director and employee must set an exemplary standard of conduct, particularly
        in
        the areas of accounting, internal accounting control, auditing and finance.
        This
        code sets forth ethical standards to which the designated officers must adhere
        and other aspects of accounting, auditing and financial compliance.
  **Audit
        Committee and Audit Committee Financial Expert; Nominating
        Directors**
 
 Other
        than Dr. Evans, none of the directors are independent as defined by Rule
        10A-3
        of the Exchange Act.  The Company’s Audit Committee is comprised of
        Mr. Dillon (Chairman of the Audit Committee) and Mr. Wittenburg. The
        Company does not have an “Audit Committee Financial Expert” as a member of its
        audit committee. The Company does not have available any person with the
        requisite background and experience, nor has the Company been able to attract
        anyone to its Board with the requisite background.  We have not
        adopted any procedures regarding security holders’ nominating
        directors.
 
 **Compliance
        with Section 16(a) of The Exchange Act**
 
 To
        our
        knowledge, based solely on a review of the copies of the reports furnished
        to us
        and written representations that no other reports were required, during
        the year ended July 31, 2007, all Section 16(a) filing requirements
        applicable to our officers, directors and greater than 10% beneficial owners
        were complied with and no reports or transactions were filed late except
        for the
        following:  Reginald Goodman failed to timely report a transaction on
        Form 4 for a March 26, 2007, sale, which was subsequently reported on a Form
        4
        on March 29, 2007, transactions on Form 4 for a March 28 and 29, 2007, sale,
        which were subsequently reported on a Form 4 on April 3, 2007, transactions
        on
        Form 4 for a April 16 and 17, 2007, sale, which were subsequently reported
        on a
        Form 4 on April 20, 2007, and a transaction on Form 4 for a May 9, 2007,
        sale,
        which was subsequently reported on a Form 4 on May 14, 2007;  Michael C.
        Wittenburg failed to timely report transactions on Form 4 for March 16, 2007
        and
        April 2, 2007, sales, which were subsequently reported on a Form 4 on April
        9,
        2007, transactions on Form 4 for April 9, 2007, sales, which were subsequently
        reported on a Form 4 on April 16, 2007, transactions on Form 4 for April
        10, 11,
        13, 16 and 17, 2007, sales, which were subsequently reported on a Form 4
        on
        April 20, 2007,  transactions on Form 4 for April 17, 18 and 19, 2007,
        sales, which were subsequently reported on a Form 4 on May 2, 2007, a
        transaction on Form 4 for a May 2, 2007, sale, which was subsequently reported
        on a Form 4 on May 7, 2007, transactions on Form 4 for May 23, 24 & 25,
        2007, sales, which were subsequently reported on a Form 4 on May 29, 2007,
        transactions on Form 4 for May 30 and 31, 2007, sales, which were subsequently
        reported on a Form 4 on June 4, 2007, a transaction on Form 4 for a June
        1,
        2007, sale, which was subsequently reported on a Form 4 on June 5, 2007 a
        transaction on Form 4 for a June 1, 2007, sale, which was subsequently reported
        on a Form 4 on June 5, 2007, a transaction on Form 4 for a June 5, 2007,
        sale,
        which was subsequently reported on a Form 4 on June 8, 2007,and  a
        transaction on Form 4 for a June 8, 2007, sale, which was subsequently reported
        on a Form 4 on June 11, 2007; and  Robert B. Dillon failed to timely
        report a transaction on Form 4 for an April 13, 2007, sale, which was
        subsequently reported on a Form 4 on April 20, 2007, a transaction on Form
        4 for
        a April 23, 2007, sales, which was subsequently reported on a Form 4 on April
        26, 2007, transactions on Form 4 for April 19 & 20, 2007, sales, which were
        subsequently reported on a Form 4 on April 26, 2007, a transaction on Form
        4 for
        a May 16, 2007, sale, which was subsequently reported on a Form 4 on May
        23,
        2007, transactions on Form 4 for May 21, 2007, sales, which were subsequently
        reported on a Form 4 on May 24, 2007, and  transactions on Form 4 for
        June 21, 22, & 25, 2007, sales, which were subsequently reported on a Form 4
        on June 29, 2007.
  32
 *Index*
  **ITEM
        10. EXECUTIVE COMPENSATION**
 
 **Compensation
        of Management**
 
 The
        following table sets forth the compensation paid to our Chief Executive Officer
        or such other officer who fulfilled the duties of the Chief Executive Officer
        for the periods indicated. Except for the individuals named, no executive
        officers had a total annual salary and bonus of $100,000 or more.
  **Summary
        Compensation Table**
 **Name**
                **Principal
                  Position**
              **Year
                  Ended**
              
              **Salary**
                **($)**
              
              
              **Bonus**
                **($)
                  (1)**
              
              
              **Stock
                  Awards**
                **($)**
              
              
              **Option
                  Awards**
                **($)**
              
              
              **Non-Equity
                  Incentive Plan Compensation**
                **($)**
              
              
              **All
                  Other Compensation**
                **($)**
              
              
              **Total**
                **($)**Robert
                  B. Dillon
              7/31/07
              
              $
              240,000
              
              
              
              -
              
              
              
              
              
              
              
              
              
              -
              
              
              
              -
              
              
              $
              240,000Chairman,
                  CEO, Pres. & Director
              7/31/06
              
              $
              132,250
              
              
              $
              10,000
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              $
              142,250Scott
                  Copeland
              7/31/07
              
              $
              242,900
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              $
              242,900Vice
                  President-Operations & Director
              7/31/06
              
              $
              131,857
              
              
              $
              10,000
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              $
              141,857Michael
                  C. Wittenburg
              7/31/07
              
              $
              240,000
              
              
              
              -
              
              
              
              
              
              
              
              
              
              
              
              -
              
              
              
              -
              
              
              $
              240,000Vice
                  President-Marketing & Director
              7/31/06
              
              $
              132,250
              
              
              $
              10,000
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              $
              142,250Marc
                  Pernia
              7/31/07
              
              $
              244,000
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              $
              244,000Admin.
                  &
                  Director
              7/31/06
              
              $
              131,923
              
              
              $
              10,000
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              $
              141,923Michael
                  G. Wirtz
              7/31/07
              
              $
              133,500
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              $
              133,500Vice
                  Pres. & CFO
              7/31/06
              
              $
              79,750
              
              
              $
              10,000
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              $
              89,750
  **Executive
        Employment Agreements**
  Mr.
        Dillon’s employment agreement provides for an annual salary of $240,000, is
        effective through October 1 2008, and automatically renews for successive
        one-year terms unless terminated. In addition, Mr. Dillon is eligible to
        receive
        an annual bonus based on performance criteria as determined by the compensation
        committee of the board of directors.  Mr. Dillon receives
        customary fringe benefits.
  Mr.
        Copeland’s employment agreement provides for an annual salary of $240,000, is
        effective through October 1 2008, and automatically renews for successive
        one-year terms unless terminated. In addition, Mr. Copeland is eligible to
        receive an annual bonus based on performance criteria as determined by the
        compensation committee of the board of directors.  Mr. Copeland
        receives customary fringe benefits.
  Mr.
        Wittenburg’s employment agreement provides for an annual salary of $240,000, is
        effective through October 1 2008, and automatically renews for successive
        one-year terms unless terminated. In addition, Mr. Wittenburg is eligible
        to
        receive an annual bonus based on performance criteria as determined by the
        compensation committee of the board of directors.  Mr. Wittenburg
        receives customary fringe benefits.
  Mr.
        Pernia’s employment agreement provides for an annual salary of 240,000, is
        effective through October 1 2008, and automatically renews for successive
        one-year terms unless terminated. In addition, Mr. Pernia is eligible to
        receive
        an annual bonus based on performance criteria as determined by the compensation
        committee of the board of directors.  Mr. Pernia receives
        customary fringe benefits.
  33
 *Index*
  Mr.
        Wirtz’s employment agreement provides for an annual salary of $144,000, is
        effective through October 1 2008, and automatically renews for successive
        one-year terms unless terminated. In addition, Mr. Wirtz is eligible to receive
        an annual bonus based on performance criteria as determined by the compensation
        committee of the board of directors.  Mr. Wirtz receives
        customary fringe benefits.
  *Business
        Protection, Severance and Non-Compete Agreements*.**Pursuant to
        the terms of each employment agreement with the executives listed above,
        each
        executive is subject to business protection, non-solicitation and non-compete
        covenants. These agreements contain restrictive covenants including a
        confidentiality provision and non-solicitation of employees and customers
        provisions that apply for one year after termination of employment. The
        non-compete provisions generally provides that the executive will not compete
        with us for a period ranging from one year after termination of employment,
        and
        in the event that termination is by us without cause, we are obligated to
        pay
        the executive his salary for such period.
  *Change
        in Control Agreements.*Included in the employment agreements of each of the
        officers identified above are change of control provisions.  The agreements
        have a term equal to the term of each employment agreement (subject to extension
        in our sole discretion) and provide certain benefits to the executive in
        the
        event the executive is terminated without cause or if the executive terminates
        his employment for good reason (as defined in the agreement). Upon a termination
        as a result of the change of control provision, we are obligated to pay an
        amount equal to 24 months of the executives then-current base salary, and
        all the rights and benefits the executive may have under all employee benefit,
        bonus and/or stock option plans and programs of or agreements with
        us.
  **Outstanding
        Equity Awards at Fiscal Year End**
  The
        Company did not grant compensation in the form of stock options to the chief
        executive officer or the other executive officers listed within the Summary
        Compensation Table during fiscal year ended July 31, 2007. The Company has
        no
        outstanding exercised or unexercised stock options granted for compensation
        to
        any executive officer and as such has no aggregated option exercises in the
        last
        fiscal year or fiscal year end stock option value to report related to
        compensation. The Company did not provide compensation awards under any
        long-term incentive plan in fiscal year ended July 31, 2007.
 
 **Director
        Compensation**
 
 Directors
        do not receive any compensation for serving as directors. All directors are
        reimbursed for ordinary and necessary expenses incurred in attending any
        meeting
        of the board of directors or any board committee or otherwise incurred in
        their
        capacities as directors.
  **ITEM
        11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
        MANAGEMENT**
  The
        following table sets forth, as of October 17, 2007, information regarding
        the
        beneficial ownership of shares of common stock by each person known by us
        to own
        five percent or more of the outstanding shares of common stock, and by each
        of
        the named executive officers, directors, and all officers and directors as
        a
        group.
  Beneficial
        ownership has been determined in accordance with Rule 13d-3 of the Exchange
        Act.
        Under this rule, shares may be deemed to be beneficially owned by more than
        one
        person (if, for example, persons share the power to vote or the power to
        dispose
        of the shares). In addition, shares are deemed to be beneficially owned by
        a
        person if the person has the right to acquire shares (for example, upon exercise
        of an option) within 60 days of the date of this table. In computing the
        percentage ownership of any person, the amount of shares includes the amount
        of
        shares beneficially owned by the person by reason of these acquisition rights.
        As a result, the percentage of outstanding shares of any person does not
        necessarily reflect the person’s actual voting power.
  To
        our
        knowledge, except as indicated in the footnotes to this table and pursuant
        to
        applicable community property laws, the persons named in the table have sole
        voting and investment power with respect to all shares of common stock shown
        as
        beneficially owned by them.  Unless otherwise indicated, the business
        address of the individuals listed is 6303 Beverly Hill, Suite 210, Houston,
        Texas 77057.
  34
 *Index*
  NAME
                  AND ADDRESS OF BENEFICAL OWNER
              SHARES
                  OF COMMON STOCK
                BENEFICIALLY
                  OWNEDNUMBER
              %Scott
                  Copeland(1)
              81,008,318
              23.23%Marc
                  Pernia
              22,432,557
              6.43%Michael
                  C. Wittenburg
              17,044,175
              4.89%First
                  Brampton Corporation (2)
              18,046,127
              5.18%Robert
                  B. Dillon (3)
              -
              -Michael
                  G. Wirtz
              3,047,427
              *Richard
                  Evans(4) (5)
              7,931,407
              2.27%Reginald
                  Goodman
              77,818,095
              22.32%Officer
                  and Directors (6 persons)
              149,510,011
              42.87%
  *
        Less
        than 1%.
 
 (1)
              Mr
                  Copeland’s address is 1710 Effie Lane, Pasadena, Texas
                  77502.
 (2)
              Mr.
                  Dillon has investment and voting control for First Brampton
                  Corporation.
 (3)
              Mr.
                  Dillon does not own any shares of record but is deemed to be the
                  beneficial owner of the shares owned of record by First Brampton
                  Corporation.
 (4)
              Mr
                  Evans’ address is 1709 Haver, Houston, Texas
                  77006.
 (5)
              This
                  includes a warrant to purchase 90,000 shares of our common stock
                  at $0.20
                  per share.
 
 
 **ITEM
        12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS; DIRECTORS
        INDEPENDENCE**
  Mr.
        Dillon advanced an aggregate principal amount of $73,062.45 to us during
        the
        fiscal year ended July 31, 2007, this loan does not bear interest.  We
        repaid principal of $71,262 during the most recent fiscal year and the principal
        amount outstanding on July 31, 2007 was $1,800.
  First
        Brampton Corporation, a corporation owned by the Robert B. Dillon 2005 Trust,
        advanced an aggregate principal amount of $83,000 to us during the fiscal
        year
        ended July 31, 2007, this loan does not bear interest..  We repaid
        principal of $0 during the most recent fiscal year and the principal amount
        outstanding on July 31, 2007 was $83,000.
  Mr.
        Wittenburg advanced an aggregate principal amount of $15,000 to us during
        the
        fiscal year ended July 31, 2007, this loan does not bear interest.  We
        repaid principal of $0 during the most recent fiscal year and the principal
        amount outstanding on July 31, 2007 was $15,000.
  Mr.
        Pernia advanced an aggregate principal amount of $50,000 to us during the
        fiscal
        year ended July 31, 2007, this loan does not bear interest.  We repaid
        principal of $0 during the most recent fiscal year and the principal amount
        outstanding on July 31, 2007 was $50,000.
  Mr.
        Wirtz
        advanced an aggregate principal amount of $25,000 to us during the fiscal
        year
        ended July 31, 2007, this loan does not bear interest.  We repaid principal
        of $0 during the most recent fiscal year and the principal amount outstanding
        on
        July 31, 2007 was $25,000.
  Mr.
        Goodman advanced an aggregate principal amount of $20,000 to us during the
        fiscal year ended July 31, 2007, this loan does not bear interest.  We
        repaid principal of $0 during the most recent fiscal year and the principal
        amount outstanding on July 31, 2007 was $20,000.
  In
        October 2007, First Brampton Corporation, an entity owned by Mr. Dillion,
        converted 196,028 shares of Series A Preferred Stock into 18,046,127 shares
        of
        Class A Common Stock, which were subsequently converted into an aggregate
        18,046,127 shares of our common stock.
  35
 *Index*
  In
        October 2007, Mr. Copeland converted 783,161 shares of Series A Preferred
        Stock
        into 72,096,961 shares of Class A Common Stock, which were subsequently
        converted into an aggregate 72,096,961 shares of our common stock.
  In
        October 2007, Mr. Wittenburg converted 184,339 shares of Series A Preferred
        Stock into 16,970,050 shares of Class A Common Stock, which were subsequently
        converted into an aggregate 16,970,050 shares of our common stock.
  In
        October 2007, Mr. Wirtz converted 8,784 shares of Series A Preferred Stock
        and
        24,319 shares of Series B Preferred Stock into an aggregate 3,047,427 shares
        of
        our common stock.
  In
        October 2007, Mr. Goodman converted 844,492 shares of Series A Preferred
        Stock
        into 77,743,027 shares of our common stock.
  In
        October 2007, Mr. Evans converted 2,203 shares of Series D Preferred Stock
        into
        294,048 shares of our common stock.
  In
        October 2005, Mr. Evans acquired 2,203 shares of Series B Preferred Stock
        and a
        warrant to purchase 90 shares of our common stock with an exercise price
        of
        $0.20 per share in connection with a private placement for
        $20,000.  In January 2007, the 2,203 shares of Series B Preferred
        Stock were transferred to 2,203 shares of Series D Preferred Stock.
  On
        November 30, 2006 Mr. Pernia converted 252,813 shares of Series B Preferred
        stock into shares 23,216,697 of our common stock.
 
 On
        January 26, 2007, Mr. Wittenburg converted 3,000 shares of Series A Preferred
        Stock into 275,500 shares of class A common stock.
 
 On
        February 8, 2007, Mr. Goodman converted 2,500 shares of Series A Preferred
        Stock
        into 229,584 shares of our common stock.
 
 On
        February 26, 2007, Manillo Investors Ltd. converted 600 Series C Preferred
        Stock
        was converted into 549,902 shares of common stock.
 
 On
        March
        6, 2007, First Brampton Corporation converted 3,267 shares of Series A Preferred
        Stock into 300,020 shares of our class A common stock.
 
 On
        April
        27, 2007, Katherine Pernia converted 50,000 shares of Series A Preferred
        stock
        into 4,591,674 shares of our common stock.
 
 On
        May 4,
        2007, First Brampton Corporation converted 1,089 Series A Preferred Stock
        into
        100,007 of our class A common stock.
 
 On
        May
        10, 2007, Mr. Goodman converted 5,000 shares of Series A Preferred Stock
        into
        459,168 shares of our common stock.
 
 On
        May
        17, 2007, Mr. Wittenberg converted 8,113 shares of Series A Preferred Stock
        into
        745,045 class A common Stock.
 
 On
        June
        1, 2007, First Brampton Corporation converted 4,814 shares of Series A Preferred
        Stock into 442,086 shares of our class A common stock.
 
 On
        July
        13, 2007, Mr. Copeland converted 100,000 shares of our Series A Preferred
        Stock
        into 9,183,348 shares of class A common stock.
 
 On
        July
        20, 2007, Sherman D. Pernia converted 126,398 shares of Series A Preferred
        Stock
        into 11,607,568 shares of our common stock.
  36
 *Index*
  On
        July
        26, 2007, Suez Holding GmbH converted 50,000 shares of Series A Preferred
        Stock
        into 4,591,674 shares of our common stock.
 
 On
        July
        26, 2007, Mr. Mark Copeland converted 69,173 shares of Series B Preferred
        Stock
        in to 6,352,397 shares of our common stock.
  On
        July
        27, 2007, First Brampton Corporation converted 5,638 shares of Series A
        Preferred Stock into 517,757 shares of class A common stock.
  Other
        than Dr. Evans, none of the directors are independent as defined by Rule
        10A-3
        of the Exchange Act.
  
 **ITEM
        13. EXHIBITS**
 
 **EXHIBIT**
                **NUMBER**
              
              **DESCRIPTION
                  OF EXHIBIT**3.1
              
              Amended
                  and Restated Articles of Incorporation Exobox Technologies Corp.
(1)3.2
              
              Bylaws
                  of Exobox Technologies Corp. (1)3.3
              
              Certificate
                  of Amendment to Articles of Incorporation (3)4.1
              
              Designation
                  of Class A Common Stock (included in Exhibit 3.1) (1)4.2
              
              Designation
                  of Series A Convertible Preferred Stock (included in Exhibit
                  3.1) (1)4.3
              
              Designation
                  of Series B Convertible Preferred Stock (included in Exhibit
                  3.1) (1)4.4
              
              Designation
                  of Series C Convertible Preferred Stock (included in Exhibit
                  3.1) (1)4.5
              
              Designation
                  of Series D Convertible Preferred Stock (included in Exhibit
                  3.1) (1)4.6
              
              Form
                  of Warrants to purchase shares of common stock (1)10.1*
              
              2007
                  Stock Option Plan (2)10.2*
              
              Employment
                  Agreement between Exobox Technologies Corp. and Robert B.
                  Dillon (3)10.3*
              
              Employment
                  Agreement between Exobox Technologies Corp. and Michael C.
                  Wittenburg (3)10.4*
              
              Employment
                  Agreement between Exobox Technologies Corp. and Michael G.
                  Wirtz (3)10.5*
              
              Employment
                  Agreement between Exobox Technologies Corp. and Marcos Pernia (3)10.6*
              
              Employment
                  Agreement between Exobox Technologies Corp. and Reginald
                  Goodman (3)10.7*
              
              Employment
                  Agreement between Exobox Technologies Corp. and Scott Copeland (3)10.8
              
              Securities
                  Purchase Agreement covering Series C Convertible Preferred
                  Stock (1)14.1
              
              Code
                  of Business Conduct and Ethics (1)21.1
              
              Subsidiaries
                  of the Registrant(1)23.1
              
              Consent
                  of auditors for Registrants Form S-8 (2)31.1
              
              Certification
                  of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 200231.2
              
              Certification
                  of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 200232.1
              
              Certification
                  of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350,
                  as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of
                  200232.2
              
              Certification
                  of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,
                  as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002
  37
 *Index*
  *
        Management contract or compensatory plan or arrangement.
  (1) Incorporated
        herein by reference to the Registrant’s Form 10-SB12, filed on December 21,
        2005.
 (2)
        Incorporated herein by reference to the Registrant’s Form S-8, filed on June 29,
        2007.
 (3)
        Incorporated herein by reference to the Registrant’s Form 10-SB12G/A, filed on
        February 3, 2006.
 
 **ITEM
        14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**
 
 During
        2006 and 2007 the Company’s principal accountants have been and remain Malone
& Bailey, PC. They have been the company’s principal accountant since the
        Company’s triangular merger in September, 2005.
 
 **AUDIT
        FEES**
 
 The
        aggregate fees billed for each of the last two fiscal years for professional
        services rendered by the Company’s principal accountants for the audit of the
        Company’s annual financial statements and review of financial statements
        included in the Company’s 10-KSB and 10-QSB filings were: 2007 $29,267 and 2006
        $31,999.
 
 **AUDIT
        RELATED FEES**
 
 The
        aggregate fees billed for each of the last two fiscal years for professional
        services rendered by the Company’s principal accountants for audit related fees:
        2007 $ 0 and 2006 $ 0.
 
 **TAX
        FEES**
 
 No
        services have been provided to date under this caption for the fiscal year
        of
        2006 or 2007.  The Company will retain its principal accountants to
        prepare its annual tax return for the year ending July 31, 2007.
 
 **ALL
        OTHER FEES**
 
 No
        other
        fees were billed in either 2007 or 2006 by the Company’s principal
        accountants.
 
 
 EXOBOX
        TECHNOLOGIES CORP.
 
 SIGNATURES
 
 Pursuant
        to the requirements of the Securities Exchange Act of 1934, the registrant
        has
        duly caused this report to be signed on its behalf of the undersigned
        thereunto duly authorized.
 
 EXOBOX
        TECHNOLOGIES CORP.
 
 Dated:
                  October 29, 2007
              By:  /s/
                  Robert B. DillonRobert
                  B. DillonChief
                  Executive Officer(Principal
                  Executive Officer)
 
 
 Dated:
                  October 29,
              By:
                  /s/ Michael G. WirtzMichael
                  G. WirtzChief
                  Financial Officer(Principal
                  Financial and Accounting Officer)






38