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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-QSB

[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2007

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT

For the transition period from _____________to
______________

Commission File Number: 000-50919

MGN TECHNOLOGIES, INC.(Exact name of small business issuer as specified in its
charter)

|British Columbia, Canada                                             | N/A                                 
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)

#12  1730 Broadway Street, Port Coquitlam, British
Columbia V3C 2M8(Address of principal executive office)

Issuers telephone number: 604-945-2405

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
[X] No [ ]

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

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date: 68,710,950
shares of our common stock were outstanding as of November 16, 2007

Transitional Small Business Disclosure Format: Yes [ ] No [X]

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PART I  FINANCIAL INFORMATION

|Item 1. | Financial Statements
|------- | --------------------

---

MGN Technologies, Inc. 
  (A Development Stage Company)

September 30, 2007 (Unaudited)

|                                                                   | Index
|------------------------------------------------------------------ | -----
|                                                                   |      
|Consolidated Balance Sheets                                        | F1  
|Consolidated Statements of Operations and
      Comprehensive Loss | F2  
|Consolidated Statements
      of Cash Flows                        | F3  
|Notes to the Consolidated Financial Statements                     | F4  

---

|MGN Technologies, Inc.       
|-----------------------------
|(A Development Stage Company)
|Consolidated Balance Sheets  
|(Expressed in U.S. dollars)  

|                                                                        |  | September 30, |   |  | December 31, |  
|----------------------------------------------------------------------- |  | ------------- | - |  | ------------ | -
|                                                                        |  | 2007          |   |  | 2006         |  
|                                                                        |  | $             |   |  | $            |  
|                                                                        |  | (Unaudited)   |   |  |              |  
|ASSETS                                                                  |  |               |   |  |              |  
|Current Assets                                                          |  |               |   |  |              |  
|Receivables                                                             |  | 17,800        |   |  | 8,759        |  
|Total Current Assets                                                    |  | 17,800        |   |  | 8,759        |  
|Deferred Issue Costs, net of accumulated amortization
      of $75,805  |  |               |   |  |              |  
|(December 31, 2006 - $40,490)                                           |  | 144,495       |   |  | 179,810      |  
|Property and Equipment (Note 4)                                         |  | 51,536        |   |  | 65,778       |  
|Total Assets                                                            |  | 213,831       |   |  | 254,347      |  
|                                                                        |  |               |   |  |              |  
|LIABILITIES AND CAPITAL DEFICIT                                         |  |               |   |  |              |  
|Current Liabilities                                                     |  |               |   |  |              |  
|Bank overdraft                                                          |  | 36,252        |   |  | 48,925       |  
|Accounts payable and accrued liabilities                                |  | 1,177,801     |   |  | 1,231,142    |  
|Accrued interest (Note 6)                                               |  | 56,679,257    |   |  | 543,386      |  
|Notes payable (Note 6)                                                  |  | 556,156       |   |  | 794,910      |  
|Total Current Liabilities                                               |  | 58,449,466    |   |  | 2,618,363    |  
|Convertible Debt (Note 7)                                               |  | 2,765,000     |   |  | 2,765,000    |  
|Total Liabilities                                                       |  | 61,214,466    |   |  | 5,383,363    |  
|Contingencies and Commitments (Notes 2 and
      10)                    |  |               |   |  |              |  
|Capital Deficit                                                         |  |               |   |  |              |  
|Preferred Stock                                                         |  |               |   |  |              |  
|Authorized: Unlimited Class A Preferred shares,
      without par value |  |               |   |  |              |  
|Issued: no shares                                                       |  |              |   |  |             |  
|Common Stock (Note 8)                                                   |  |               |   |  |              |  
|Authorized: Unlimited common shares,
      without par value            |  |               |   |  |              |  
|Issued: 66,510,950 shares (December 31, 2006 
      42,828,350 shares) |  | 3,352,342     |   |  | 2,944,103    |  
|Additional Paid-In Capital                                              |  | 3,268,790     |   |  | 2,734,849    |  
|Accumulated Other Comprehensive Income                                  |  | 21,579        |   |  | 77,525       |  
|Deficit Accumulated During the Development Stage                        |  | (67,643,346   | ) |  | (10,885,493  | )
|Total Capital Deficit                                                   |  | (61,000,635   | ) |  | (5,129,016   | )
|Total Liabilities and Capital Deficit                                   |  | 213,831       |   |  | 254,347      |  

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

F-1

---

|MGN Technologies, Inc.                                      
|------------------------------------------------------------
|(A Development Stage Company)                               
|Consolidated Statements of Operations and Comprehensive Loss
|(Expressed in U.S. dollars)                                 
|(Unaudited)                                                 

|                                          |  | Accumulated from    |   |  | For the       |   |  | For the       |   |  | For the       |   |  | For the       |  
|----------------------------------------- |  | ------------------- | - |  | ------------- | - |  | ------------- | - |  | ------------- | - |  | ------------- | -
|                                          |  | March 3, 2003       |   |  | Three Month   |   |  | Three Month   |   |  | Nine Month    |   |  | Nine Month    |  
|                                          |  | (Date of Inception) |   |  | Period Ended  |   |  | Period Ended  |   |  | Period Ended  |   |  | Period Ended  |  
|                                          |  | to September 30,    |   |  | September 30, |   |  | September 30, |   |  | September 30, |   |  | September 30, |  
|                                          |  | 2007                |   |  | 2007          |   |  | 2006          |   |  | 2007          |   |  | 2006          |  
|                                          |  | $                   |   |  | $             |   |  | $             |   |  | $             |   |  | $             |  
|                                          |  |                     |   |  |               |   |  |               |   |  |               |   |  |               |  
|                                          |  |                     |   |  |               |   |  |               |   |  |               |   |  |               |  
|Revenue                                   |  | 74,407              |   |  | 17,985        |   |  | 4,256         |   |  | 23,485        |   |  | 13,423        |  
|                                          |  |                     |   |  |               |   |  |               |   |  |               |   |  |               |  
|                                          |  |                     |   |  |               |   |  |               |   |  |               |   |  |               |  
|Operating Expenses                        |  |                     |   |  |               |   |  |               |   |  |               |   |  |               |  
|                                          |  |                     |   |  |               |   |  |               |   |  |               |   |  |               |  
|Consulting fees                           |  | 4,244,730           |   |  | 136,010       |   |  | 306,778       |   |  | 839,128       |   |  | 2,813,824     |  
|Depreciation                              |  | 176,431             |   |  | 4,748         |   |  | 26,870        |   |  | 14,242        |   |  | 81,750        |  
|General and administrative                |  | 607,450             |   |  | 4,010         |   |  | 33,866        |   |  | 42,470        |   |  | 267,854       |  
|Professional fees                         |  | 483,123             |   |  | 18,037        |   |  | (5,863        | ) |  | 57,319        |   |  | 205,757       |  
|Regulatory & transfer agent fees          |  | 13,554              |   |  |              |   |  |              |   |  |              |   |  |              |  
|Rent                                      |  | 119,258             |   |  |              |   |  | 10,609        |   |  |              |   |  | 88,891        |  
|Research
      & development              |  | 2,554,018           |   |  |              |   |  |              |   |  |              |   |  | 774,915       |  
|                                          |  |                     |   |  |               |   |  |               |   |  |               |   |  |               |  
|Total Operating Expenses                  |  | 8,198,564           |   |  | 162,805       |   |  | 372,260       |   |  | 953,159       |   |  | 4,232,991     |  
|                                          |  |                     |   |  |               |   |  |               |   |  |               |   |  |               |  
|Loss from Operations                      |  | (8,124,157          | ) |  | (144,820      | ) |  | (368,004      | ) |  | (929,674      | ) |  | (4,219,568    | )
|                                          |  |                     |   |  |               |   |  |               |   |  |               |   |  |               |  
|Other Income (Expense)                    |  |                     |   |  |               |   |  |               |   |  |               |   |  |               |  
|                                          |  |                     |   |  |               |   |  |               |   |  |               |   |  |               |  
|Loss on exchange of convertible debt      |  |                     |   |  |               |   |  |               |   |  |               |   |  |               |  
|(Note
        7)                          |  | (1,971,506          | ) |  |              |   |  | (1,971,506    | ) |  |              |   |  | (1,971,506    | )
|Loss on impairment of intangible assets   |  | (126,383            | ) |  |              |   |  |              |   |  |              |   |  |              |  
|Amortization of debt issue costs          |  | (365,305            | ) |  | (11,948       | ) |  | (21,346       | ) |  | (35,315       | ) |  | (318,200      | )
|Financing costs                           |  | (207,774            | ) |  |              |   |  | (506          | ) |  |              |   |  | (207,774      | )
|Interest (Note 6)                         |  | (57,912,999         | ) |  | (45,744,825   | ) |  | (238,198      | ) |  | (56,857,642   | ) |  | (551,198      | )
|Gain
      on settlement of debt (Note 8) |  | 1,064,778           |   |  | 1,064,778     |   |  |              |   |  | 1,064,778     |   |  |              |  
|                                          |  |                     |   |  |               |   |  |               |   |  |               |   |  |               |  
|Net Loss                                  |  | (67,643,346         | ) |  | (44,836,815   | ) |  | (2,599,560    | ) |  | (56,757,853   | ) |  | (7,268,246    | )
|                                          |  |                     |   |  |               |   |  |               |   |  |               |   |  |               |  
|Other Comprehensive Income (Loss)         |  |                     |   |  |               |   |  |               |   |  |               |   |  |               |  
|Foreign currency translation adjustment   |  | 21,579              |   |  | (7,933        | ) |  | (8,728        | ) |  | (55,946       | ) |  | (32,873       | )
|                                          |  |                     |   |  |               |   |  |               |   |  |               |   |  |               |  
|Comprehensive Loss                        |  | (67,621,767         | ) |  | (44,844,748   | ) |  | (2,608,288    | ) |  | (56,813,799   | ) |  | (7,301,119    | )
|                                          |  |                     |   |  |               |   |  |               |   |  |               |   |  |               |  
|Loss Per Share  Basic and Diluted        |  |                     |   |  | (0.74         | ) |  | (0.06         | ) |  | (1.16         | ) |  | (0.17         | )
|                                          |  |                     |   |  |               |   |  |               |   |  |               |   |  |               |  
|Weighted Average Shares Outstanding       |  |                     |   |  | 60,813,000    |   |  | 42,464,219    |   |  | 49,028,000    |   |  | 41,972,000    |  

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

F-2

---

|MGN Technologies, Inc.               
|-------------------------------------
|(A Development Stage Company)        
|Consolidated Statements of Cash Flows
|(Expressed in U.S. dollars)          
|(Unaudited)                          

|                                                                      |  | Accumulated from    |   |  | For the       |   |  | For the       |  
|--------------------------------------------------------------------- |  | ------------------- | - |  | ------------- | - |  | ------------- | -
|                                                                      |  | March 3, 2003       |   |  | Nine Month    |   |  | Nine Month    |  
|                                                                      |  | (Date of Inception) |   |  | Period Ended  |   |  | Period Ended  |  
|                                                                      |  | to September 30,    |   |  | September 30, |   |  | September 30, |  
|                                                                      |  | 2007                |   |  | 2007          |   |  | 2006          |  
|                                                                      |  | $                   |   |  | $             |   |  | $             |  
|                                                                      |  |                     |   |  |               |   |  |               |  
|Operating Activities                                                  |  |                     |   |  |               |   |  |               |  
|                                                                      |  |                     |   |  |               |   |  |               |  
|Net loss for the period                                               |  | (67,643,346         | ) |  | (56,757,853   | ) |  | (7,268,246    | )
|                                                                      |  |                     |   |  |               |   |  |               |  
|Adjustments to reconcile net loss
      to net cash used in operating |  |                     |   |  |               |   |  |               |  
|activities:                                                           |  |                     |   |  |               |   |  |               |  
|                                                                      |  |                     |   |  |               |   |  |               |  
|Accretion of convertible debt discount                                |  | 120,580             |   |  |              |   |  | 100,803       |  
|Accretion of discount
      on notes payable                          |  | 290,114             |   |  |              |   |  | 290,114       |  
|Accrued interest                                                      |  | 56,679,257          |   |  | 56,135,871    |   |  | 169,025       |  
|Amortization of
      debt issue costs                                |  | 365,305             |   |  | 35,315        |   |  | 318,200       |  
|Depreciation                                                          |  | 176,431             |   |  | 14,242        |   |  | 81,750        |  
|Gain on settlement
      of debt                                      |  | (1,064,778          | ) |  | (1,064,778    | ) |  |              |  
|Loss on exchange of convertible
      debt                            |  | 1,971,506           |   |  |              |   |  | 1,971,506     |  
|Loss on impairment
      of intangible assets                         |  | 126,383             |   |  |              |   |  |              |  
|Stock-based compensation                                              |  | 1,473,590           |   |  | 462,023       |   |  | 428,592       |  
|Stock issued for
      services                                       |  | 1,998,750           |   |  | 35,000        |   |  | 1,921,250     |  
|Financing costs                                                       |  | 157,268             |   |  |              |   |  | 157,268       |  
|                                                                      |  |                     |   |  |               |   |  |               |  
|Changes in operating assets and liabilities:                          |  |                     |   |  |               |   |  |               |  
|Receivables                                                           |  | (15,218             | ) |  | (9,041        | ) |  | (6,422        | )
|Accounts payable and accrued liabilities                              |  | 2,159,059           |   |  | 958,486       |   |  | 492,004       |  
|Deferred revenue                                                      |  |                    |   |  |              |   |  | (12,501       | )
|Prepaid expenses                                                      |  |                    |   |  |              |   |  | 36,456        |  
|                                                                      |  |                     |   |  |               |   |  |               |  
|Net Cash Used in Operating
      Activities                           |  | (3,205,099          | ) |  | (190,735      | ) |  | (1,320,201    | )
|                                                                      |  |                     |   |  |               |   |  |               |  
|Investing Activities                                                  |  |                     |   |  |               |   |  |               |  
|Cash acquired from recapitalization                                   |  | 879                 |   |  |              |   |  |              |  
|Mobile game and marketing software                                    |  | (250,000            | ) |  |              |   |  |              |  
|Purchase of property and equipment                                    |  | (104,351            | ) |  |              |   |  | (13,127       | )
|                                                                      |  |                     |   |  |               |   |  |               |  
|Net Cash Used in Investing Activities                                 |  | (353,472            | ) |  |              |   |  | (13,127       | )
|                                                                      |  |                     |   |  |               |   |  |               |  
|Financing Activities                                                  |  |                     |   |  |               |   |  |               |  
|Increase (decrease) in bank overdraft                                 |  | 36,252              |   |  | (12,673       | ) |  | 47,449        |  
|Proceeds from issuance
      of convertible debt, net of commission   |  | 2,544,700           |   |  |              |   |  | 945,000       |  
|Advances on notes payable, net of cash
      issuance costs           |  | 1,282,078           |   |  | 136,186       |   |  | 645,892       |  
|Repayment of notes payable                                            |  | (500,000            | ) |  |              |   |  | (500,000      | )
|Proceeds
      from issuance of common stock                          |  | 166,450             |   |  | 66,000        |   |  |              |  
|                                                                      |  |                     |   |  |               |   |  |               |  
|Net Cash Provided
      by Financing Activities                       |  | 3,529,480           |   |  | 189,513       |   |  | 1,138,341     |  
|                                                                      |  |                     |   |  |               |   |  |               |  
|Net decrease in Cash                                                  |  | (29,091             | ) |  | (1,222        | ) |  | (194,987      | )
|                                                                      |  |                     |   |  |               |   |  |               |  
|Effect of Foreign Exchange on Cash                                    |  | 29,091              |   |  | 1,222         |   |  | (32,873       | )
|                                                                      |  |                     |   |  |               |   |  |               |  
|Cash  Beginning
      of Period                                      |  |                    |   |  |              |   |  | 227,860       |  
|                                                                      |  |                     |   |  |               |   |  |               |  
|Cash  End of
      Period                                            |  |                    |   |  |              |   |  |              |  
|                                                                      |  |                     |   |  |               |   |  |               |  
|Non-cash Investing and Financing Activities                           |  |                     |   |  |               |   |  |               |  
|Stock issued for recapitalization                                     |  | 659,903             |   |  |              |   |  |              |  
|Stock issued for services                                             |  | 1,998,750           |   |  | 35,000        |   |  | 1,921,250     |  
|Stock issued to settle debt                                           |  | 307,239             |   |  | 307,239       |   |  |              |  
|Stock issued for finders fees                                        |  | 220,000             |   |  |              |   |  | 220,000       |  
|Increase in value of detachable warrants                              |  | 157,268             |   |  |              |   |  | 157,268       |  
|                                                                      |  |                     |   |  |               |   |  |               |  
|Supplemental Disclosures:                                             |  |                     |   |  |               |   |  |               |  
|                                                                      |  |                     |   |  |               |   |  |               |  
|Interest paid                                                         |  | 6,250               |   |  |              |   |  |              |  
|Income
      taxes paid                                               |  |                    |   |  |              |   |  |              |  

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

F 3

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|MGN Technologies, Inc.                        
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   
|(Unaudited)                                   

|1. | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The unaudited interim consolidated financial statements
        have been prepared by MGN Technologies, Inc. (the Company
        or MGN) in accordance with generally accepted accounting principles
        in the United States for interim financial information and conform with
        instructions to Form 10-QSB of Regulation S-B and reflects all adjustments
        (all of which are normal and recurring in nature) that, in the opinion
        of management, are necessary for fair presentation of the interim periods
        presented. The results of operations for the interim periods presented
        are not necessarily indicative of the results to be expected for any subsequent
        quarter or for the entire year ending December 31, 2007. Certain information
        and footnote disclosures normally included in financial statements prepared
        in accordance with generally accepted accounting principles in the United
        States have been condensed or omitted. These unaudited interim consolidated
        financial statements and notes included herein should be read in conjunction
        with the Companys audited consolidated financial statements and
        notes for the year ended December 31, 2006, included in the Companys
        Annual Report on Form 10-KSB. The accounting principles applied in the
        preparation of these interim consolidated financial statements are consistent
        with those applied for the year ended December 31, 2006.                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2. | Nature of Business and Ability to Continue Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | MGN was incorporated under the laws of the Province
        of British Columbia, Canada on December 23, 1999 as Tryx Ventures Corp.
        On October 25, 2005 the Company closed the transaction contemplated in
        the Share Exchange Agreement (the Agreement) dated July 29,
        2005 with Ignition Technologies Inc. (Ignition), a company
        incorporated under the laws of the state of Nevada on March 3, 2003. Ignition
        conducts business as Mobile Gaming Now, Inc. Under the Agreement, the
        Company agreed to acquire all of the issued and outstanding shares of
        Ignition in exchange for 24,750,000 common shares of the Company. As of
        the closing date, the former shareholders of Ignition held approximately
        60% of the issued and outstanding common shares of the Company. The acquisition
        of Ignition was recorded as a reverse acquisition for accounting purposes.
        Ignition, the acquired entity, is regarded as the predecessor entity as
        of October 25, 2005 and the Company adopted the year end of Ignition,
        being December 31.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company previously focused its business efforts
        on the acquisition, exploration, development, and exploitation of mineral
        and oil and gas properties. In contemplation of the share exchange transaction
        with Ignition, the Company abandoned its original business plan and terminated
        two agreements for the acquisition of oil and gas properties. As of the
        closing date of the Agreement, the Company commenced the business of developing
        and licensing mobile media entertainment applications for online wireless
        gaming activities, namely poker. On April 1, 2005, Ignition acquired a
        mobile gaming platform and opportunity code technology. In 2007, the Company
        changed its focus from building a gaming membership through licenses to
        focusing on marketing advertising, lead generation and branding to become
        an internet mobile marketer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | These interim consolidated financial statements are
        prepared in accordance with accounting principles generally accepted in
        the United States of America, and include the accounts of the Company
        and its wholly-owned subsidiary, Ignition Technologies Inc. All significant
        inter-company transactions have been eliminated on consolidation. The
        Company is currently in the development stage and presents its financial
        statements in accordance with Statement of Financial Accounting Standard
        (SFAS) No. 7, Accounting and Reporting by Development
        Stage Enterprises.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | These accompanying interim consolidated financial statements
        have been prepared on a going concern basis, which contemplates the realization
        of assets and the satisfaction of liabilities and commitments in the normal
        course of business. To September 30, 2007, the Company has recognized
        cumulative revenue of $74,407, has negative working capital and has a
        consolidated accumulated deficit of $67,643,346 as at September 30, 2007.
        The continuation of the Company is dependent upon the continuing support
        of creditors and stockholders as well as achieving a profitable level
        of operations. The Company is in the development stage and has a limited
        operating history. The successful implementation of its business strategy
        depends on numerous factors including economic competitive, technological
        factors and uncertainties, the ability to hire and retain qualified personnel,
        and the ability to obtain financing on acceptable terms to continue the
        development of its plans. Adverse economic or competitive conditions,
        the failure to hire and retain qualified personnel or obtain financing
        on acceptable terms when required could affect the Companys future
        operations. The Company has only earned nominal revenue since inception,
        has negative working capital, has incurred losses since its inception,
        and has no assurance of future profitability. These conditions raise substantial
        doubt about the Companys ability to continue as a going concern.
        The Company will continue to require financing from external sources to
        finance its operating and investing activities until sufficient positive
        cash flows from operations can be generated.

F-4

---

|MGN Technologies, Inc.                        
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   
|(Unaudited)                                   

|2. | Nature of Business and Ability to Continue Operations
        (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Management anticipates that it requires approximately
        $2.4 million over the next twelve months ended September 30, 2008 to continue
        operations. To the extent that cash needs are not achieved from operating
        cash flow, the Company plans to raise necessary cash through equity issuances
        and/or debt financing. The Company plans to manage its resources and assets
        on hand and pursue opportunities for further long-term financing, as well
        as achieving and maintaining a profitable level of operations. Assets
        on hand and any additional amounts raised will be used for further development
        of the Companys products and for other working capital purposes.
        There is no assurance that further financing or profitable business will
        be achieved, accordingly, there is substantial doubt about the Companys
        ability to continue as a going concern. The Companys financial statements
        do not include any adjustments related to the recoverability and classification
        of recorded asset amounts or the amounts and classification of liabilities
        that may be necessary should the Company be unable to continue in existence.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3. | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | In February 2006, FASB issued SFAS No. 155, Accounting
        for Certain Hybrid Financial Instruments  an Amendment of FASB Statements
        No. 133 and 140.Among other things, SFAS No. 155 permits the
        election of fair value re- measurement for certain hybrid financial instruments
        that would otherwise require bifurcation under Statement 133, Accounting
        for Derivative Instruments and Hedging Activities. These hybrid financial
        instruments would include both assets and liabilities. SFAS No. 155 is
        effective for fiscal years beginning after September 15, 2006. The Company
        has determined that SFAS No.155 did not have a material impact on its
        financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | In September 2006, the Financial Accounting Standards
        Board (FASB) issued Statement of Financial Accounting Standard
        (SFAS) No. 157, Fair Value Measurements(FAS
        157). FAS 157 defines fair value, establishes a framework for measuring
        fair value in accordance with generally accepted accounting principles,
        and expands disclosures about fair value measurements. The provisions
        of FAS 157 are effective fiscal years beginning after November 15, 2007.
        The Company is currently evaluating the impact of the provisions of SFAS
        No. 157.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | In June 2006, the Financial Accounting Standards Board
        (FASB) issued interpretation No. 48, Accounting for
        Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109
        (FAS No. 109)(FIN 48). This interpretation prescribes
        a recognition threshold and measurement attribute for tax positions taken
        or expected to be taken in a tax return. This interpretation also provides
        guidance on de-recognition, classification, interest and penalties, accounting
        in interim periods, disclosure and transition. The evaluation of a tax
        position in accordance with this interpretation is a two- step process.
        In the first step, recognition, the Company determines whether it is more-likely-
        than-not that a tax position will be sustained upon examination, including
        resolution of any related appeals or litigation processes, based on the
        technical merits of the position. The second step addresses measurement
        of a tax position that meets the more-likely- than-not criteria. The tax
        position is measured at the largest amount of benefit that is greater
        than 50 percent likely of being realized upon ultimate settlement. Differences
        between tax positions taken in a tax return and amounts recognized in
        the financial statements will generally result in a) an increase in a
        liability for income taxes payable or a reduction of an income tax refund
        receivable, b) a reduction in a deferred tax asset or an increase in a
        deferred tax liability or c) both (a) and (b). Tax positions that previously
        failed to meet the more-likely-than-not recognition threshold should be
        recognized in the first subsequent financial reporting period in which
        that threshold is met. Previously recognized tax positions that no longer
        meet the more-likely-than-not recognition threshold should be de- recognized
        in the first subsequent financial reporting period in which that threshold
        is no longer met. Use of a valuation allowance as described in FAS No.
        109 is not an appropriate substitute for the de-recognition of a tax position.
        The requirement to assess the need for a valuation allowance for deferred
        tax assets based on sufficiency of future taxable income is unchanged
        by this interpretation. This Interpretation is effective for fiscal years
        beginning after December 15, 2006. There were no material effects on the
        consolidated financial statements as a result of the implementation of
        this new standard.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | In September 2006, the FASB issued SFAS No. 158, Employers
        Accounting for Defined Benefit Pension and Other Postretirement Plans
         an amendment of FASB Statements No. 87, 88, 106, and 132(R).
        This statement requires employers to recognize the overfunded or underfunded
        status of a defined benefit postretirement plan (other than a multiemployer
        plan) as an asset or liability in its statement of financial position
        and to recognize changes in that funded status in the year in which the
        changes occur through comprehensive income of a business entity or changes
        in unrestricted net assets of a not-for-profit organization. This statement
        also requires an employer to measure the funded status of a plan as of
        the date of its year-end statement of financial position, with limited
        exceptions. The provisions of SFAS No. 158 are effective for employers
        with publicly traded equity securities as of the end of the fiscal year
        ending after December 15, 2006. The adoption of this statement is not
        expected to have a material effect on the Company's financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

F-5

---

|MGN Technologies, Inc.                        
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   
|(Unaudited)                                   

|3. | Recent Accounting Pronouncements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | In February 2007, the FASB issued SFAS No. 159, The
        Fair Value Option for Financial Assets and Financial Liabilities 
        Including an Amendment of FASB Statement No. 115. This statement
        permits entities to choose to measure many financial instruments and certain
        other items at fair value. Most of the provisions of SFAS No. 159 apply
        only to entities that elect the fair value option. However, the amendment
        to SFAS No. 115 Accounting for Certain Investments in Debt and
        Equity Securities applies to all entities with available-for-sale
        and trading securities. SFAS No. 159 is effective as of the beginning
        of an entitys first fiscal year that begins after November 15, 2007.
        Early adoption is permitted as of the beginning of a fiscal year that
        begins on or before November 15, 2007, provided the entity also elects
        to apply the provision of SFAS No. 157, Fair Value Measurements.The adoption of this statement is not expected to have a material
        effect on the Company's financial statements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|4. | Property and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

| |                  |   | September 30, |  |   | December 31, | 
| | ---------------- | - | ------------- |  | - | ------------ | 
| |                  |   | 2007          |  |   | 2006         | 
| |                  |   |               |  |   | Accumulated  | 
| |                  |   | Cost          |  |   | Depreciation | 
| | Computer         |   |               |  |   |              | 
| | equipment        | $ | 91,456        |  | $ | 46,247       | 
| | Furniture and    |   |               |  |   |              | 
| | fixtures         |   | 4,667         |  |   | 1,351        | 
| | Office equipment |   | 4,546         |  |   | 1,535        | 
| |                  | $ | 100,669       |  | $ | 49,133       | 

|5. | Related Party Transactions                                                                                                                                                   
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                              
|   | Related party transactions not disclosed elsewhere
        in these interim consolidated financial statements are as follows:                                                
|   |                                                                                                                                                                              
|   | a)                                                                                                                                                                           
|   |                                                                                                                                                                              
|   | b)                                                                                                                                                                           
|   |                                                                                                                                                                              
|   | c)                                                                                                                                                                           
|   |                                                                                                                                                                              
|   | d)                                                                                                                                                                           
|   |                                                                                                                                                                              
|   | e)                                                                                                                                                                           
|   |                                                                                                                                                                              
|   | These related party transactions are recorded
        at the exchange amount, being the amount established and agreed to by
        the related parties.                     
|   |                                                                                                                                                                              
|6. | Notes Payable                                                                                                                                                                
|   |                                                                                                                                                                              
|   | Notes payable to a stockholder of the Company
        amounting to $80,883 (December 31, 2006 - $80,883) are non-interest bearing,
        unsecured and repayable on demand.
|   |                                                                                                                                                                              
|   | Notes payable to a director of the Company
        amounting to $40,324 (December 31, 2006 - $24,027) are non-interest bearing,
        unsecured and repayable on demand.   

F-6

---

|MGN Technologies, Inc.                        
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   
|(Unaudited)                                   

|6. | Notes Payable (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In March 2006, the Company issued a note payable in
        the amount of $400,000 to an arms length party, and share purchase
        warrants to acquire 200,000 shares of common stock exercisable at $1.00
        per share until March 26, 2011. The note was secured by 500,000 free trading
        shares (Secured Shares) of the Companys common stock
        held by the Vice- President of Investor Relations of the Company. Pursuant
        to the Pledge and Escrow Agreement, the Company is required to place additional
        shares in escrow if the quoted market price of the Secured Shares fell
        below a pre- determined threshold. As of September 30, 2007, the Company
        is thus obligated to place 7,557,234,400 shares in escrow as additional
        security, none of which has been put into escrow by the Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | On June 30, 2006, the Company entered into an amendment
        to the above loan agreement by extending the repayment terms from June
        26, 2006 to July 31, 2006. To extend the repayment terms, the Company
        must pay on or before July 7, 2006, $90,000 comprised of (i) an extension
        fee of $44,406, (ii) interest of $40,000, and (iii) administration fees
        of $5,594. These amounts are included in accrued liabilities. In addition,
        the warrants are increased from 200,000 to 400,000 warrants, the exercise
        price of these 400,000 warrants was reduced from $1.00 per share to $0.50
        per share, and the exercise period is extended to June 30, 2011. As a
        result of these amendments to the detachable warrants, financing costs
        of $157,268 (based on the increase in value of the amended warrants compared
        to the original warrants immediately before the amendments calculated
        using Black Scholes option pricing model) were included in the total financing
        costs of $207,774 charged to the Statement of Operations in 2006. On July
        31, 2006, the Company defaulted on the note and the shares were seized
        by the lender as the Company continues to operate under the extended terms
        of the amendment until repayment of the principal. Default interest is
        payable at the rate of 10% per month on the entire unpaid principal, along
        with any accrued and unpaid interest. In the event that any amounts remain
        unpaid more than sixty days from July 31, 2006, the default interest rate
        will increase 5% each thirty day period thereafter until the debt is paid
        in full. As at September 30, 2007, default interest of $56,679,257 (December
        31, 2006 - $388,771) has been accrued. As a result of the Company default
        on the note, all the Secured Shares were transferred to the lender as
        partial payment of approximately $96,000 of the debt (which approximates
        the quoted market value of the Secured Shares on the date of settlement).
        This amount was accrued in accounts payable and accrued liabilities. The
        Company is currently in discussions with the lender regarding the repayment
        of amounts due under the note.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company paid debt issue costs of $49,500 and issued
        100,000 common shares with a fair value of $220,000 as a finders
        fee. The costs have been capitalized as debt issue costs and were being
        amortized over the term of the debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In April 2006, the Company issued a note payable in
        the amount of $200,000 to an arms length party, and share purchase
        warrants to acquire 100,000 shares of common stock exercisable at $1.00
        per share until April 27, 2009. The principal amount of the loan is due
        in full on the earlier of August 25, 2006, or the date upon which the
        Company closes a round of equity financing with commitments in the aggregate
        of not less than $1,500,000. Interest is payable at the rate of 10% per
        annum during the term of the debt. The Company allocated the proceeds
        of issuance between the note payable and the detachable warrants based
        on their relative fair values. Accordingly, the Company recognized the
        fair value of the detachable warrants of $92,007 as additional paid-in
        capital. The carrying value of the note payable will be accreted to the
        face value of $200,000 to maturity. At September 30, 2007, the debt discount
        of $92,007 has been fully accreted. On August 25, 2006, the Company defaulted
        on the note. Default interest is payable at the rate of 10% per month
        on the entire unpaid principal, along with any accrued and unpaid interest.
        In the event that any amounts remain unpaid more than sixty days from
        August 25, 2006, the default interest rate will increase to 15% per month
        thereafter until the debt is paid in full. On July 17, 2007, the Company
        entered into a debt settlement agreement and issued 6,000,000 shares of
        common stock to repay and settle an aggregate of $719,805 of indebtedness,
        which included the principal plus accrued interest. As a result of the
        agreement, $629,805 was recorded as a gain on settlement of debt in the
        Statement of Operations. The shares issued were accounted for based on
        the quoted market value of the Companys common stock on the date
        of the settlement agreement. (Note 8)                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company paid debt issue costs of $20,000 as a finders
        fee. The costs have been capitalized as debt issue costs and are being
        amortized over the term of the debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Notes payable to Androgas Property S.A., an Austrian
        company, amounting to $34,949 (December 31, 2006 - $90,000) are non interest
        bearing, and unsecured with no terms of repayment. On July 17, 2007, the
        Company entered into a debt settlement agreement with Androgas Property
        S.A. to settle a portion of the amount owing and 3,498,800 shares of common
        stock were issued as a repayment of $174,940 of indebtedness. The shares
        issued were accounted for based on the quoted market value of the Companys
        common stock on the date of settlement agreement and the difference was
        recognized as a gain of $122,458 in the Statements of Operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

F-7

---

|MGN Technologies, Inc.                        
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   
|(Unaudited)                                   

|7. | Convertible Debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | On October 25, 2005, the Company closed a Credit Facility
        Agreement dated October 21, 2005 with Androgas Property S.A., an Austrian
        company, whereby Androgas Property has provided the Company a $2,765,000
        credit facility that may be drawn down by the Company over a period of
        time not exceeding one year. The credit facility matures on October 21,
        2010. On August 31, 2006, the Company entered into an amendment to the
        above credit facility agreement by decreasing the conversion price from
        $0.70 per unit to $0.25 per unit consists of one common share and one
        share purchase warrant, and the exercise price of each warrant from $1.00
        per share to $0.50 per share for a period of three years from the date
        of issuance.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | In lieu of interest on the convertible note, the Company
        will pay a royalty fee based upon a percentage of the Companys gross
        revenue that may exceed the five year term of the convertible debenture
        as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| | (i)   | 5% of the first $10 million;   
| | ----- | -------------------------------
| | (ii)  | 4% of the next $20 million;    
| | (iii) | 3% of the next $35 million; and
| | (iv)  | 2% of the next $55 million.    

The Royalty may be purchased at the option
  of the Company at any time by paying 60% of the future Royalty payments that
  could still be earned as at the date of the payment. As at September 30, 2007,
  an insignificant royalty amount has been accrued in relation to this convertible
  note payable.

In 2006, the Company had drawn down the
  full amount of the credit facility of $2,765,000. The Company paid an 8% commission
  of $220,300 which was capitalized as debt issue costs and is being amortized
  over the term of the debt. In accordance with Emerging Issue Task Force (EITF)
  Abstract 00-27, the Company recorded a total beneficial conversion feature of
  $1,981,486 as a discount to the convertible debt and initially credited this
  amount to additional paid-in capital. The discount and deferred issue costs
  were being amortized to interest expense over the term of the debt using the
  effective interest rate method. For the nine month period ended September 30,
  2007, interest expense of $nil (September 30, 2006 - $60,077) has been recorded
  in the Consolidated Statement of Operations. The discount has been fully recognized
  at the time of modification as described below.

On August 31, 2006, the Company modified
  the convertible debt by decreasing the conversion price from $0.70 per unit
  to $0.25 per unit, and the exercise price of each warrant from $1.00 per share
  to $0.50 per share. In accordance with EITF 96-19 Debtors Accounting
  for a Modification or Exchange of Debt Instrument and EITF 05-7 Accounting
  for Modification of Conversion Options Embedded in Debt Instruments and Related
  Issues, for accounting purposes, the modification was accounted for
  as an extinguishment of the original debt with the issuance of a new convertible
  debt. The excess over the face value of the convertible debt of $110,600 was
  recorded immediately in 2006 as a charge to the Consolidated Statement of Operations
  with the offsetting credit to additional paid-in capital. The difference between
  the fair value of the modified convertible debt and the carrying value of the
  original debt was recorded as a loss on exchange of convertible debt of $1,971,506
  in the Consolidated Statement of Operations in 2006.

|8. | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Companys authorized capital stock consists
        of an unlimited number of common stock with no par value and an unlimited
        number of Class A preferred stock with no par value. The Companys
        board of directors, without any action by the Companys stockholders,
        is authorized to designate and issue shares of preferred stock in any
        class or series as it deems appropriate and to establish many of the rights,
        preferences and privileges of these shares. The holders of preferred stock
        shares rank, both in regards to dividends and to return of capital, in
        priority to all other shares of the Company and may have other superior
        rights to the rights granted to the holders of existing shares of the
        Companys common stock.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | During the nine month period ended September 30, 2007,
        the Company issued 1,000,000 restricted shares of common shares to Z7media
        at the quoted market price of $0.035 per share. The common shares were
        issued to satisfy a Software Licence and Content Agreement that was entered
        into on April 23, 2007, in order to licence a search engine media platform.                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | On July 17, 2007, the Company entered into debt settlement
        agreements with five creditors whereby a total of 20,482,600 shares of
        common stock were issued as a repayment and settlement of an aggregate
        of $1,443,935 of indebtedness. The shares issued were accounted for based
        on the quoted market value of the Companys common stock of $0.015
        on the date of settlement agreement. As a result of the transaction, $71,918
        was recorded against additional paid in capital in respect of related
        party debts settled (Note 5), $307,239 was recorded as an increase to
        share capital and the remaining gain of $1,064,778 was recorded as a gain
        on settlement of debt in the Statements of Operations.                                        

F-8

---

|MGN Technologies, Inc.                        
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   
|(Unaudited)                                   

|8. | Common Stock (continued)                                                                                                                                                                                     
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                              
|   | On September 18, 2007, the Company issued 2,200,000
        shares of common stock to a director of the Company pursuant to the exercise
        of stock options at $0.03 per share for proceeds of $66,000.
|   |                                                                                                                                                                                                              
|   | Warrants                                                                                                                                                                                                     
|   |                                                                                                                                                                                                              
|   | The following table summarizes the continuity of the
        Companys warrants:                                                                                                                             

| |                             |  |           |  |  | Weighted | 
| | --------------------------- |  | --------- |  |  | -------- | 
| |                             |  |           |  |  | Average  | 
| |                             |  | Number of |  |  | Exercise | 
| |                             |  | Warrants  |  |  | Price    | 
| |                             |  |           |  |  |          | 
| | Balance, December 31, 2006  |  | 550,000   |  |  | US$ 0.64 | 
| | Granted during the period   |  | -         |  |  | -        | 
| | Exercised during the period |  | -         |  |  | -        | 
| |                             |  |           |  |  |          | 
| | Balance, September 30, 2007 |  | 550,000   |  |  | US$ 0.64 | 

| |  |  | Number of |  |  | Exercise |  |  |                | 
| |  |  | --------- |  |  | -------- |  |  | -------------- | 
| |  |  | Warrants  |  |  | price    |  |  | Expiry Date    | 
| |  |  |           |  |  |          |  |  |                | 
| |  |  | 100,000   |  |  | US$1.00  |  |  | April 27, 2009 | 
| |  |  | 50,000    |  |  | US$1.00  |  |  | April 30, 2009 | 
| |  |  | 400,000   |  |  | US$0.50  |  |  | June 30, 2011  | 
| |  |  |           |  |  |          |  |  |                | 
| |  |  | 550,000   |  |  | US$0.64  |  |  |                | 

These warrants are fully vested and exercisable.

|9. | Stock Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On January 11, 2006, the Company adopted its 2006 Stock
        Option Plan. The 2006 Stock Option Plan provides for the granting of up
        to 4,000,000 stock options to eligible employees, directors, advisory
        board members, and consultants of the Company. The exercise price and
        the vesting terms of the options are determined by the Companys
        Board of Directors. The exercise price will generally be at least equal
        to the market price of the common shares at the date of the grant.                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On June 12, 2007, the Company adopted its 2007 Stock
        Option Plan (the Plan). The Plan provides for the granting
        of up to 10,000,000 stock options to eligible employees, directors, advisory
        board members, and consultants of the Company. The exercise price and
        the vesting terms of the options are determined by the Companys
        Board of Directors. The exercise price will generally be at least equal
        to the market price of the common shares at the date of the grant.                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On January 11, 2006, the Company granted 600,000 stock
        options to employees and directors with an exercise price of $2.00 per
        share, expiring on January 11, 2011. These options vest one-quarter per
        every six-month period commencing on July 11, 2006. The fair value for
        options granted was estimated at the date of grant using the Black-Scholes
        option- pricing model assuming an expected life of 5 years, a dividend
        rate of Nil%, a risk-free rate of 4.80% and an expected volatility of
        115%. The weighted average grant date fair value of stock options granted
        during the 6 month period ended June 30, 2007 was $1.88 per share. During
        the year ended December 31, 2006, 225,000 stock options were cancelled
        by the Company.                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On January 11, 2006, the Company granted 500,000 stock
        options to consultants with an exercise price of $2.00 per share, expiring
        on January 11, 2011. These options vest one-quarter per every six-month
        period commencing on July 11, 2006. The fair value for options granted
        was estimated at the balance sheet date using the Black-Scholes option-
        pricing model assuming an expected life of 5 years, a dividend rate of
        Nil%, a risk-free rate of 4.80% and an expected volatility of 115%. The
        weighted average grant date fair value of stock options granted during
        the period ended June 30, 2007 was $1.88 per share. Unvested options to
        consultants were re-measured on each balance sheet date until fully vested.
        During the year ended December 31, 2006, 325,000 stock options were cancelled
        by the Company.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On June 12, 2007, the Company granted 8,300,000 stock
        options to consultants with an exercise price of $0.03 per share, expiring
        June 12, 2009. These options vested immediately upon the grant date. The
        fair value for options granted was estimated at the balance sheet date
        using the Black-Scholes option-pricing model assuming an expected life
        of 2 years, a dividend rate of Nil%, a risk free rate of 4.93% and an
        expected volatility of 204%. The weighted average grant date fair value
        of stock options granted during the period ended September 30, 2007 was
        $0.02 per share.                                                                                                                                                                                                                                                          

F-9

---

|MGN Technologies, Inc.                        
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   
|(Unaudited)                                   

|9. | Stock Options (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | During the nine month period ended September 30, 2007,
        the Company recognized stock-based compensation of $462,023 (2006 - $428,592)
        which is included in consulting expense on the Consolidated Statement
        of Operations. As at September 30, 2007, $111,808 of compensation costs
        related to the unvested employee and director options remained to be amortized
        over the remaining vesting periods through January 2008.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | A summary of the Companys stock option activity
        is as follows:                                                                                                                                                                                                                                                                                                                                                                                           

| |                                       |  |            |   |   | Weighted       |  |  | Remaining   |  |   | Aggregate | 
| | ------------------------------------- |  | ---------- | - | - | -------------- |  |  | ----------- |  | - | --------- | 
| |                                       |  | Number of  |   |   | Average        |  |  | Contractual |  |   | Intrinsic | 
| |                                       |  | Options    |   |   | Exercise Price |  |  | Life        |  |   | Value     | 
| | Outstanding, January 1, 2007          |  | 550,000    |   | $ | 2.00           |  |  | 3.28        |  | $ |          | 
| | Granted                               |  | 8,300,000  |   |   | 0.03           |  |  | 1.70        |  |   |          | 
| | Cancelled / Forfeited                 |  |           |   |   |               |  |  |            |  |   |          | 
| | Exercised                             |  | (2,200,000 | ) |   | 0.03           |  |  |            |  |   |          | 
| | Outstanding, September 30, 2007       |  | 6,650,000  |   | $ | 0.19           |  |  | 1.83        |  | $ |          | 
| | Exercisable, September
      30, 2007 |  | 6,512,500  |   | $ | 0.15           |  |  | 1.80        |  | $ |          | 

A summary of the status of the Companys
  unvested shares as of September 30, 2007, and changes during the nine month
  period ended September 30, 2007, is presented below:

| |                                |  |           |   |   | Weighted-Average | 
| | ------------------------------ |  | --------- | - | - | ---------------- | 
| |                                |  | Number of |   |   | Grant-Date       | 
| | Unvested shares                |  | Shares    |   |   | Fair Value       | 
| |                                |  |           |   |   |                  | 
| | Unvested at January 1, 2007    |  | 412,500   |   | $ | 1.88             | 
| |                                |  |           |   |   |                  | 
| | Granted                        |  |          |   |   |                 | 
| | Forfeited                      |  |          |   |   |                 | 
| | Vested                         |  | (275,000  | ) | $ | 1.88             | 
| |                                |  |           |   |   |                  | 
| | Unvested at September 30, 2007 |  | 137,500   |   | $ | 1.88             | 

|10. | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Effective October 15, 2006, the Company signed an agreement
        with MarketVoice Inc. The term of the engagement is 6 months. Both parties
        have the option to cancel the agreement. The Company agreed to pay a fee
        of $5,000 per month and issue 300,000 common shares as consideration for
        services within 14 days of signing the agreement. As at September 30,
        2007, $5,000 relating to fees and $87,000 relating to common shares to
        be issued are included in accounts payable.                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | During the nine month period ended September 30, 2007,
        the Company entered into agreements with five consultants for consulting
        services. The agreements allowed for a lump sum payment of $249,000, in
        aggregate, for services provided to the Company commencing April 1, 2007.
        At September 30, 2007, these amounts have not been paid and are included
        in accounts payable and accrued liabilities. In addition, the agreements
        provide for monthly service fees of $500 to be paid to each consultant
        for a two year period, as well the Company granted the consultants an
        aggregate of 8,300,000 options exercisable at $0.03 that vest immediately
        and have a term of 2 years, expiring on the anniversary of the date the
        consulting agreements were signed (see Note 9).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|11. | Legal Proceedings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | On March 15, 2007 a lawsuit was filed by Tira Wireless
        of Toronto, Ontario. Tira Wireless has claimed it is owed $21,000 by Ignition
        Technologies, a subsidiary of MGN Technologies. The lawsuit is currently
        pending. At this point, it is indeterminable as to the outcome of this
        lawsuit. Any loss to be recognized will be recognized in the period it
        becomes likely. An amount for $21,000 has been recorded in accounts payable
        as at September 30, 2007.                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|12. | Subsequent Event                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | On October 5, 2007, the Company issued 2,200,000 shares
        of common stock pursuant to the exercise of stock options at $0.03 per
        share for proceeds of $66,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

F-10

---

|Item 2. | Managements Discussion and Analysis or Plan
      of Operations
|------- | ----------------------------------------------------------------

In this quarterly report: (i) references to we, us, our,
MGN or our company refer to MGN Technologies, Inc., and our wholly-owned
subsidiary, Ignition Technologies, Inc., unless the context suggests
otherwise; (ii) Ignition Technologies refers to our wholly-owned subsidiary,
Ignition Technologies, Inc., (iii) all dollar amounts are expressed in United
States dollars; and (iv) all references to common shares are to the shares of
common stock of our company.

You should read the following discussion and analysis of our
financial condition, results of operations and plan of operations together with
the interim consolidated financial statements and the notes to the interim
consolidated financial statements included in this quarterly report, as well as
our most recent annual report on Form 10-KSB for the year ended December 31,
2006.

Forward-Looking Statements

This quarterly report contains forward-looking statements
within the meaning of the

Private Securities Litigation Reform Act of 1995. These
statements relate to future events or our future financial performance. You can
often identify forward-looking statements by terminology such as may, will,
should, intends, expects, plans, anticipates, believes, estimates,
predicts, potential, goal, or continue or the negative of these terms or
other comparable terminology. These statements are only predictions and involve
known and unknown risks and uncertainties, including the risks and uncertainties
set forth in reports and other documents we have filed with or furnished to the
SEC, including, without limitation, our annual report on Form 10-KSB for the
year ended December 31, 2006, any of which may cause our actual results, levels
of activity or performance to be materially different from any future results,
levels of activity or performance expressed or implied by these forward-looking
statements.

Although we believe that the expectations reflected in such
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity or performance. Except as required by applicable law, we do
not undertake to update any of the forward-looking statements to conform these
statements to actual results.

Overview

Our Corporate Organization

We were incorporated on December 23, 1999 under the laws of the
Province of British Columbia, Canada as Tryx Ventures Corp. We changed our name
to MGN Technologies, Inc. on December 6, 2005.

We initially focused our business efforts on the acquisition
and exploration of mineral and oil and gas properties. We abandoned these
initial business efforts in order to focus on the business of developing and
marketing online and mobile software games for

---

consumers upon the completion of our acquisition of Ignition
Technologies. Due to passing of The Safe Port Act, as discussed below, we have
retooled our business plans for deployment of our mobile platform and are
presently implementing new business plans for the commercial exploitation of our
software and/or the acquisition of a related business or technology.

On October 25, 2005, we acquired Ignition Technologies, a
Nevada corporation, in exchange for 24,750,000 common shares in the capital of
our company. As a result of this acquisition, our business changed to being a
developer and marketer of online and mobile software games for consumers.
Ignition Technologies was incorporated under the laws of the state of Nevada on
March 3, 2003. On April 1, 2005, Ignition Technologies completed the acquisition
of a mobile gaming platform, mobile poker and mobile gaming marketing system for
the purchase price of $250,000 from Illuminated Technologies, Inc., a company
incorporated under the laws of British Columbia, Canada. In contemplation of the
acquisition of Ignition Technologies, we terminated certain Purchase, Sale and
Assumption Agreements that we had entered into in connection with the proposed
acquisition of interests in certain oil and gas leases and other assets pursuant
to unwind agreements dated October 21, 2005.

On December 6, 2005, we subdivided all of our issued and
outstanding common shares without par value on the basis of every one common
share being subdivided into 5.5 common shares and we changed our name to MGN
Technologies, Inc. to reflect the change in our business. All share information
presented in this quarterly report is on a post-split basis.

Our Business

Through our subsidiary, Ignition Technologies, we were a
developer and marketer of online and mobile software games for consumers. We
developed a gaming platform that creates simultaneous play between a web browser
on a personal computer and a mobile phone device. Our gaming platform is based
on our mobile software platform that enables us to offer computer software games
and services to mobile phone devices. We also developed an online marketing
network of over 250 websites for lead generation for our gaming. Our goal was to
assist licensees of our gaming products with creating website traffic.

Due to the passing of the Safe Port Act, as discussed below, we
changed our focus from building a gaming membership through licensees to
focusing on marketing as a core competency and, specifically, advertising as a
revenue stream. Weve repositioned our Company as a marketing agency focusing on
lead generation marketing to small businesses in the United States. Our business
model will primarily utilize pay-per-click networks of different sizes to
generate leads for clients at an optimum price. In addition to pay-per-click
were also utilizing direct mail, telemarketing and B2B networking. We have no
intentions of operating in the gaming space due to the dramatic shift in online
gaming.

---

In March 2007 the Company signed a Letter of Intent (LOI) with
Frazoo, LLC, a pay-per-click search engine company headquartered in California
to purchase Frazoo. Frazoo is a tier three search engine which displays an
advertisers sponsored links. Sponsored links are purchased through a
pay-per-click keyword bidding system. It works the same as Google Adwords or
Yahoo! Sponsored Search. Advertisers, who want to promote their products or
services in the sponsored listed, pay a per click fee based on bidding with
competitors for strategic keywords.

We are currently in the process of conducting due diligence
efforts. As of November 16 2007 due diligence is not complete. Frazoo has been
unable to deliver sufficient accounting for an audit to be performed. To date,
we have not executed any definitive agreement for the acquisition of Frazoo and
there is no assurance that (i) a definitive agreement will be executed, or (ii)
even if a definitive agreement is executed, that we will be able to complete
this acquisition.

On June 8th, 2007, while the due diligence process
is proceeding, we entered into a Services Agreement with Frazoo wherein MGN will
assist Frazoo with the marketing of the search engine website at
www.frazoo.com, advertiser registration and sales, product development,
branding, and revenue generation in exchange for compensation of 20% of Frazoos
gross revenues. The Company continues to provide consulting services to
Frazoo.

In May of 2007 the Company completed the purchase of a license
of a portal product from Z7 Media for payable by way of 1 million shares of MGN
common stock. The Z7Media.com Media Platform consists of a dynamic portal for
website content, search results and sponsored advertising listings. We currently
arent using the portal product. Site concepts have been launched but the
marketing for the sites was cost prohibitive. We will utilize the portal product
at the appropriate time.

We plan to market to businesses interested in search marketing
on the Internet. The average revenue of a first-time advertising account on
Frazoo is $450. Its common for first-time advertisers to put $5,000 in an
account to pay for pay-per-click marketing. Frazoos gross margin is 60%. In the
meantime, we have recognized $17,985 in servicing revenue from the Service
Agreement with Frazoo during the three months ended September 30, 2007 ($23,485
 Nine months ended September 30, 2007).

In April 2007 the Company implemented an online marketing
strategy to build its marketing network of websites to support Frazoo. The
Company is focusing its marketing network on local markets. More than forty
websites have been launched and are operating today.

In June of 2007 the Company started a telemarketing campaign
focused on several categories of local businesses such as automotive,
homebuilders, high end restaurants and high end retailers. These businesses are
being contacted to determine interest in pay-per-click advertising. The Company
is initially testing the telemarketing in Seattle and Atlanta. In response to
the Seattle calls, the Company launched a local marketing

---

network of websites. It consists of
www.frazoo/com/seattle as well as several local marketing websites such
as www.cadillac.seattle-cars.com. The goal is to create a local marketing
base for pay-per-click, banner advertising and email marketing to support
Frazoo.

We will continue to seek out web applications we can use to
generate traffic. The more users we can create through our Internet publishing
efforts the more we promote Frazoo and our branded portals. Like other
successful publishers, we want to own and operate our content and be able to
market ourselves to target markets.

Products

1. Pay-Per-Click Agency. We provide pay-per-click management
services to companies wanting to generate leads or traffic using search engine
marketing. We use Frazoo as a low-cost, low traffic solution as well as Google,
Yahoo and MSN for high level traffic and impact.

2. Lead Generation. In addition to pay-per-click we use direct
mail, telemarketing and traditional referral marketing for lead generations
efforts for local companies. Weve launched several campaigns for clients
beginning in September of 2007.

3. Web Development. We offer a media portal product thats a
state-of-the art proprietary media software application for development,
implementation, management and processing of online marketing campaigns. We also
develop stand-alone websites for clients for the purpose of furthering their
marketing efforts.

With the passing of The Safe Port Act, as discussed below, we
halted our business efforts to commercially deploy our mobile platform for
licensing to the online gambling and land-based casino gaming.

Revenue

Through our search engines, portals and websites we expect to
generate revenue through advertising, promotion and lead generation. Businesses
will pay us for services such as pay-per-click, pay-per acquisition and
consulting. Ultimately the revenue is created by an end user clicking on a
sponsored search link, banner, button or text-line based on a cost per search or
page view which are recognized when the services are delivered. For the nine
months ended September 30, 2007, we have recognized gross service revenues of
$23,485.

Our Mobile Gaming Platform

Our original business plan was to license our gaming platform
to strategic partners in the gaming industry, including land-based casinos,
poker operators and corporations. We developed and commenced operations of our
own sophisticated, Internet marketing

---

programs that have been designed to drive customer acquisition.
Our website at www.mgnpoker.net was designed to be our in-house distribution
platform for our games. We launched this web site in January of 2006, however we
have since ceased operation of the web site.

Our original intentions were to derive revenue through our
licensing program with strategic partners in the gaming industry. We also
planned to expand our target markets to include consumer-based companies beyond
gaming. Our original goal was to create multiple revenue streams through
multiple channels of distribution for our products and services. We initially
planned to offer through our licensees expanded service offerings to include
membership fees and lead generation programs.

We have presently halted our efforts to license our mobile
gaming platform due to the fact that our potential licensees have withdrawn from
the mobile gaming market as a result of the passing of The Safe Port Act. We
believe that this business opportunity has been adversely impacted by the
passing of The Safe Port Act and the current regulatory environment in the
United States. Thus, we have changed our focus to focusing on marketing
advertising, lead generation and branding to become an internet mobile marketer.

Passing of the Unlawful Internet Gambling Enforcement Act
of 2006

Our business plans were adversely impacted by the passing of
The Safe Port Act by the U.S. House of Representatives in May 2006. This statute
went on to become a law in October of 2006. Included in the Safe Port Act was
the Unlawful Internet Gambling Enforcement Act of 2006. This title (found at 31
U.S.C. § 5361-5367) prohibits the transfer of funds from a financial institution
to an Internet gambling site, with the notable exceptions of "fantasy" sports,
online lotteries, and horse/harness racing.

As a result of the passing of this legislation, all online
gambling sites listed on the London Stock Exchange or similar markets stopped
taking United States players due to the passage of the Act. Many non-public
companies ceased gaming activities in the U.S. Non-gambling sectors of gaming
such as skill-gaming, sweepstakes gaming and play-for-free gaming were also
affected.

As a result of the passing of the Safe Port Act, our potential
customers and licensees effectively halted their business activities that would
involve using our mobile gaming platform and related software products. This
including companies in online and land-based gambling. Accordingly, our
immediate business opportunities in mobile and online games ceased to exist due
to the passage of the Safe Port Act.

Our Websites

The Companys corporate website is located at
www.mgn-inc.com. We have several marketing websites we operate for
prospecting and product delivery. We jointly operate www.frazooleads.com
with Frazoo. The website promotes our local lead generation

---

marketing. We also operate www.500dollartest, a website promoting marketing testing. We have local marketing websites such as www.frazoo.com/seattle to attract pay-per-click customers.  We have these type of sites for 22 different
cities.  We have other websites to attract new clients such as www.service.frazooleads.com or www.auto.frazooleads.com.  We currently have more than 60 websites operating to support our marketing and services.

Employees

As of November 16, 2007, Mark Jensen, our president and CEO was our only employee.

Our Financial Condition

We are currently generating revenues solely from our Services Agreement with Frazoo. We ceased operation of our websites in fiscal 2006 and have not generated any revenues from our websites to date. We have incurred recurring losses and had a
working capital deficiency of $58,431,666 as at September 30, 2007 (December 31, 2006 - $2,609,604). As at the date of this quarterly report, we had drawn down the entire amount of a $2,765,000 credit facility available to us. In
addition, we are currently in default under one of the notes payable, and currently owe $56,679,257 in accrued interest, which includes default interest. Under one of the notes payable, there is an obligation for the Company to place
7,557,234,400 common shares in escrow as security for the amount owing in relation to the note payable as well as the related accrued interest. The Company has not placed any shares in escrow as required by the obligation.

We have issued promissory notes and share purchase warrants to raise capital to pursue our business plan. We are currently in default under one of the notes we issued and are currently in discussions with the lenders regarding its repayment. For
more information, see Liquidity and Capital Resources below.

We will require additional capital to pursue our business plan.  We intend to pursue various financing alternatives to meet our immediate and long-term cash requirements, including through future equity offerings or debt financing, if available.
There are no assurances that we will be able to obtain further funds required for our continued operations or that additional financing will be available to us when needed, or if available, that it can be obtained on commercially reasonable terms.
If we are not able to obtain additional financing on a timely basis, we will be unable to conduct our operations as planned, as a result of which we may be required to scale back or cease operations.

Plan of Operations

We estimate our operating expenses for the next twelve months to be as follows:

Operating Expenses

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|Sales and
      Marketing               | $ | 120,000   | 
|--------------------------------------- | - | --------- | 
|General and
      Administrative        |   | 15,000    | 
|Research
      and Development          |   | 12,000    | 
|Consulting Fees                         |   | 100,000   | 
|Professional Fees                       |   | 200,000   | 
|Rent                                    |   | 1,300     | 
|Capital
      Expenditures              |   | 20,000    | 
|Officer and Employee
      Compensation |   | 180,000   | 
|Working
      Capital                   |   | 1,750,000 | 
|Total                                   | $ | 2,398,300 | 

These estimates do not include any potential capital
requirements in the event that we identify any products or businesses the
acquisition of which may add value to our company. In the event that we do not
achieve the financing necessary to enable us to pursue our plan of operations,
then we will scale back our plan of operations to be within our available
financial resources.

Sales and Marketing

Our company performs all of its own sales and marketing
activities and we also offer sales and marketing services to corporations or
other persons who license our products or otherwise request such services. We
anticipate spending approximately $120,000 on sales and marketing activities in
the next twelve months. These activities include website development, search
engine optimization, affiliate programs, reciprocal linking, and local internet
marketing.

General and Administrative

We anticipate spending approximately $15,000 on general and
administrative matters in the next twelve months. These costs will consist
primarily of banking, licenses and permits, and telephone and utility bills.

Research and Development

We anticipate spending approximately $12,000 on product
development in the next twelve months. This relates to the development and
maintenance of our internet websites.

Consulting Fees

We anticipate spending approximately $100,000 on consulting
fees in the next twelve months relating to the management and operation of our
business.

Professional Fees

We anticipate spending approximately $200,000 on professional
fees in the next twelve months relating mainly to legal, accounting and
regulatory compliance expenses.

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Rent

We anticipate spending approximately $1,300 on rent for our executive offices in the next twelve months.

Capital Expenditures

We estimate spending approximately $20,000 for computer hardware and software equipment for servers, including financial servers, merchant servers, and marketing servers, during the next 12 months.

Officer and Employee Compensation

We estimate spending approximately $180,000 in officer and employee hiring and compensation during the next twelve months. We currently employ one executive officer, Mark Jensen, who acts as our President, Chief Executive Officer and a Director.
We are seeking and intend to hire other suitable individuals with specific industry knowledge in the software development and internet marketing business for the following positions within the next twelve month period: Chief Financial Officer,
Controller/Compliance Director, and Sales Director.

Working Capital

We anticipate spending approximately $1,750,000 in working capital in the next twelve months to cure our working capital deficiency. This excludes the accrued interest of $56,679,257, as the intention of the Company is settle this amount
thru the issuance of common shares. Such settlement is currently under negotiations.

Results of Operations

The following table provides information relating to our operating results for the periods indicated:

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Three months ended September 30,
      2007
    Three months ended September 30,
      2006
    Nine months ended September 30,
      2007
    Nine months ended September 30,
      2006Revenues
    $
      17,985
    $
      4,256
    $
      23,485
    $
      13,423Operating Expenses
    162,805
    372,260
    953,159
    4,232,991Loss from
      Operations
    (144,820)
    (368,004)
    (929,674)
    (4,219,568)Loss on exchange
      of convertible debt
    -
    (1,971,506)
    -
    (1,971,506)Amortization of
      debt issuance costs
    (11,948)
    (21,346)
    (35,315)
    (318,200)Financing costs
    -
    (506)
    -
    (207,774)Interest Expense
    (45,744,825)
    (238,198)
    (56,857,642)
    (551,198)Gain on Settlement
      of Debt
    1,064,778
    -
    1,064,778
    -Net Loss
    (44,836,815)
    (2,599,560)
    (56,757,853)
    (7,268,246)


Revenues

For the nine month period ended September 30, 2007, we
recognized revenues of $23,485 compared to $13,423 in the nine month period
ended September 30, 2006. We are currently earning revenues solely from our
Services Agreement with Frazoo.

For the three month period ended September 30, 2007, we
recognized revenues of $17,985 compared to $4,256 in the three month period
ended September 30, 2006. We are currently earning revenues solely from our
Services Agreement with Frazoo.

Consulting Fees

For the nine month period ended September 30, 2007, we incurred
consulting fees of $839,128 compared to $2,813,824 in the nine months ended
September 30, 2006, pursuant to consulting and other agreements relating to the
management and operation of our business and stock compensation expenses. The
decrease is due to a slow down in business operations while the Company retools
and refocuses its business plan.

For the three month period ended September 30, 2007, we
incurred consulting fees of $136,010 compared to $306,778 in the three months
ended September 30, 2006, pursuant to consulting and other agreements relating
to the management and operation of our business and stock compensation expenses.
The decrease is due to a slow down in business operations while the Company
retools and refocuses its business plan.

Depreciation

For the nine month period ended September 30, 2007,
depreciation relating to our software, property and equipment was $14,242
compared to $81,750 in the nine month period ended September 30, 2006. The
lesser depreciation charge in the nine month period ended September 30, 2006 was
due to the abandonment of our mobile game and

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marketing software, for which we recorded an impairment loss
during the year ended December 31, 2006.

For the three month period ended September 30, 2007,
depreciation relating to our software, property and equipment was $4,748
compared to $26,870 in the three month period ended September 30, 2006. The
lesser depreciation charge in the nine month period ended September 30, 2006 was
due to the abandonment of our mobile game and marketing software, for which we
recorded an impairment loss during the year ended December 31, 2006.

General and Administrative

For the nine month period ended September 30, 2007, our general
and administrative expenses were $42,470 compared to $267,854 in the nine month
period ended September 30, 2006. The decrease is due to a slow down in business
operations while the Company retools and refocuses its business plan.

For the three month period ended September 30, 2007, our
general and administrative expenses were $4,010 compared to $33,866 in the three
month period ended September 30, 2006. The decrease is due to a slow down in
business operations while the Company retools and refocuses its business plan.

Professional Fees

For the nine months ended September 30, 2007, we paid
professional fees of $57,319 compared to $205,757 in the nine month period ended
September 30, 2006. These fees are attributable mainly to auditing, legal,
accounting and regulatory compliance expenses.

For the three months ended September 30, 2007, we paid
professional fees of $18,037 compared to $(5,863) in the three month period
ended September 30, 2006. These fees are attributable mainly to auditing, legal,
accounting and regulatory compliance expenses.

Loss from Operations

For the nine month period ended September 30, 2007, our loss
from operations was $929,674 compared to $4,219,568 in the nine month period
ended September 30, 2006. This decrease was due to the slow down of business
operations while the Company retooled and refocused its business efforts.

For the three month period ended September 30, 2007, our loss
  from operations was $144,180 compared to $368,004 in the three month period
  ended September 30, 2006. This decrease was due to the slow down of business
  operations while the Company retooled and refocused its business efforts.

***Loss on Exchange of Convertible Debt***

For the nine month period ended September 30, 2007, loss on exchange of convertible
  debt was $NIL compared to $1,971,506 in the nine month period ended September
  30, 2006.

For the three month period ended September 30, 2007, loss on exchange of convertible
  debt was $NIL compared to $1,971,506 in the three month period ended September
  30, 2006.

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Amortization of Debt Issue Costs

For the nine month period ended September 30, 2007, amortization
  of debt issue costs were $35,315 compared to $318,200 in the nine month period
  ended September 30, 2006.

For the three month period ended September 30, 2007, amortization
  of debt issue costs were $11,948 compared to $21,346 in the three month period
  ended September 30, 2006.

***Financing Costs***

For the nine month period ended September 30, 2007, financing costs were $NIL
  compared to $207,774 in the nine month period ended September 30, 2006.

For the three month period ended September 30, 2007, financing costs were $NIL
  compared to $506 in the three month period ended September 30, 2006.

Interest Expense

For the nine month period ended September 30, 2007, interest
expense was $56,857,642 compared to $551,198 in the nine month period ended
September 30, 2006. Interest expenses were primarily attributable to our loan
from Alliance Capital Ventures and is expected to increase considerably unless
we are able to repay or settle the amount outstanding under this loan. See
discussion below under Notes Payable.

For the three month period ended September 30, 2007, interest
  expense was $45,744,825 compared to $238,198 in the three month period ended
  September 30, 2006. Interest expenses were primarily attributable to our loan
  from Alliance Capital Ventures and is expected to increase considerably unless
  we are able to repay or settle the amount outstanding under this loan. See discussion
  below under Notes Payable.

***Gain on Settlement of Debt***

For the nine month period ended September 30, 2007, gain on settlement of debt
  was $1,064,778 compared to $NIL in the nine month period ended September 30,
  2006. This was as a result of the settlement of amounts owing to various creditors.
  See discussion below under “Notes Payable”.

For the three month period ended September 30, 2007, gain on settlement of
  debt was $1,064,778 compared to $NIL in the three month period ended September
  30, 2006. This was as a result of the settlement of amounts owing to various
  creditors. See discussion below under “Notes Payable”.

Loss for the Period

Our company incurred a net loss of $56,757,853 for the nine
month period ended September 30, 2007 compared to $7,268,246 in the nine month
period ended September 30, 2006.

Our company incurred a net loss of $44,836,815 for the three
month period ended September 30, 2007 compared to $2,599,560 in the three month
period ended September 30, 2006.

Liquidity and Capital Resources

As at September 30, 2007, our company had cash on hand of $Nil
(December 31, 2006 - $Nil) and a working capital deficiency of $58,431,666
(December 31, 2006 - $2,609,604). We will require additional financing to pursue
our plan of operations.

On July 17, 2007, the company issued 20,482,600 common shares
to various parties (see Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds) to settle a total debt amount of $1,443,935.

Plan of Operations and Financing Requirements

We plan to spend approximately $2,398,300 over the next twelve
months in carrying out our plan of operations, subject to our ability to obtain
additional financing, and in repaying the note payables. Such amount excludes
financing required to rectify our working capital deficiency of which we hope to
negotiate settlement in common stock

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where possible. Should we be required to settle all payables and to repay the convertible debt in cash, our cash requirements would be approximately $4.5 million which excludes the accrued interest which we hope to negotiate in settlement with
common stock. We have incurred recurring losses in our operations. To date, we have had negative cash flows from operations, are in default on one note payable and have been dependent on debt financing for our cash requirements. Based on these
factors and our limited cash and working capital, we will require additional capital to pursue our plan of operations, as outlined above.

We intend to fulfill our additional cash requirements through the sale of equity securities or debt financing from current stockholders, if available. There can be no assurance that we will achieve any sale of our equity securities to obtain the
funding required. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely
basis, we will not be able to meet our obligations as they become due and we will be required to scale down or cease the operation of our business.

Credit Facility Agreement

On October 21, 2005, we entered into a Credit Facility Agreement pursuant to which our company could draw down up to $2,765,000 for a period of one year until October 21, 2006. We had drawn down the entire amount of the credit facility during
the fiscal year ended December 31, 2006.  The amounts advanced under the credit facility were originally convertible into units at a price of $0.70 per unit whereby each unit consists of one common share and one share purchase warrant. The
warrants may be exercised for a period of three years from the date of issuance and were originally exercisable at $1.00 per share. On August 31, 2006, the Company entered into an amendment to the above credit facility agreement by decreasing
the conversion price from $0.70 per unit to $0.25 per unit, and the exercise price of each warrant from $1.00 per share to $0.50 per share.

Notes Payable

On March 27, 2006, we entered into a loan agreement with Alliance Capital Ventures, LLC pursuant to which we issued a note payable in the principal amount of $400,000 and share purchase warrants to acquire 200,000 shares of our common stock
exercisable at a price of $1.00 per share until March 26, 2011. The note was secured by 500,000 free trading shares (Secured Shares) of the Companys common stock held by the former Vice-President of Investor Relations of the
Company. Pursuant to the Pledge and Escrow Agreement, the Company is required to place additional shares in escrow if the quoted market price of the Secured Shares fell below a pre-determined threshold.  As of September 30, 2007, the Company is
required to place 7,557,234,400 shares in escrow as additional security, in accordance with the Pledge and Escrow Agreement to the note, of which nil has been put into escrow by the Company . The interest on the loan was originally 10% of the
principal amount of the loan and the full amount of such interest is due and payable irrespective of whether the loan is paid on or before the date of maturity.

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The principal amount of the loan was originally due in full on June 26, 2006. On June 30, 2006, we entered into an amendment to the loan agreement pursuant to which the maturity date was extended from June 26, 2006 to July 31, 2006. In addition, the
number of warrants issued was increased from 200,000 to 400,000, the exercise price of the warrants was reduced from $1.00 per share to $0.50 per share, and the exercise period of the warrants was extended to June 30, 2011.  As a result of
these amendments to the detachable warrants, financing costs of $157,268 (based on the increased in value of the amended warrants compared to the original warrants immediately before the amendments) were included in the total financing costs of
$207,774 charged to our statement of operations in fiscal 2006.  We have defaulted on this note, however, the lender has not as yet taken any action upon the default. We are currently in discussions with the lender regarding the repayment of
amounts due under the note. We plan to raise additional funds through an issuance of our shares, a portion of which could be used to repay the principal amount of the loan, however, there can be no assurance that we will be able to complete such a
financing.  As a result of the note being in default, all the Secured Shares were transferred to the lender as partial payment of approximately $96,000 of the debt (which approximates the quoted market value of the Secured Shares) on the date of
settlement. The Company has agreed to repay the former Vice President of Investor Relations $96,000 for the 500,000 Secured Shares that was transferred to the lender.

Default interest is payable at the rate of 10% per month on the entire unpaid principal, along with any accrued and unpaid interest. In the event that any amounts remained unpaid more than sixty days from July 31, 2006, the default interest rate
will increase 5% each thirty day period thereafter until the debt is paid in full. As at September 30, 2007, default interest of $56,679,257 has been accrued. The Company paid debt issue costs of $49,500 and issued 100,000 common shares with
a fair value of $220,000 as a finders fee. The costs have been capitalized as debt issue costs and were being amortized over the term of the debt. The current rate of interest at November on this debt is 80% per month and the amount
outstanding is $56,679,257 as of September 30, 2007. With respect to the Pledge and Escrow Agreement, the Company is required to place in escrow 7,557,234,400 common shares, based on the requirements of the agreement.

On April 27, 2006, we entered into a loan agreement with Abettor Agencies, Ltd. pursuant to which we issued a note payable in the principal amount of $200,000 and share purchase warrants to acquire 100,000 shares of our common stock exercisable
at a price of $1.00 per share until April 27, 2009. The principal amount of the loan was due in full on the earlier of August 25, 2006, or at the date upon which we close a round of equity financing with commitments in the aggregate of not less
than $1,500,000. Interest is payable at the rate of 10% per annum during the term of the loan. We had defaulted on this note on August 25, 2006. Default interest is payable at the rate of 10% per month on the entire unpaid principal, along with
any accrued and unpaid interest. In the event that any amounts remain unpaid more than sixty days from August 25, 2006, the default interest rate will increase to 15% per month thereafter until the debt is paid in full. The Company paid debt issue
costs of $20,000 as a finders fee. The costs have been capitalized as debt issue costs and have been fully amortized.  On July 17th, 2007, we

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entered into a debt settlement agreement with Abettor wherein, the parties agreed to settle the outstanding debt for a value of $719,805 payable by way of 6,000,000 common shares. In addition, the Company entered into a debt settlement agreement
with Androgas Property, SA to settle the outstanding debt for a value of $174,940 payable by way of 3,498,800 common shares, and the Company also entered into debt settlement agreements with three additional creditors to settle an aggregate
outstanding amount of $549,190 payable by way of 10,983,800 common shares.

Cash Flows from Operating Activities

Operating activities used cash of $190,735 in the nine month period ended September 30, 2007 compared to $1,320,201 in the nine month period ended September 30, 2006. Due to our inability to generate cash from operations, we rely on cash
from financing activities to fund our operations.

Cash Flows from Financing Activities

In the nine month period ended September 30, 2007, financing activities provided cash of $189,513 as compared to $1,138,341 for the nine month period ended September 30, 2006. Proceeds from advances on notes payable provided cash of
$136,186 during the first nine months of fiscal 2007 as compared to $645,892 for the same period in fiscal 2006. Proceeds from issuance of common stock on exercise of stock options provided cash of $66,000 during the nine months of
fiscal 2007 as compared to $NIL for the same period in fiscal 2006.

Outlook

There are no assurances that we will be able to generate revenues, generate cash flows from operations or obtain further funds required for our continued operations. We intend to pursue various financing alternatives to meet our immediate and
long-term financial requirements. There can be no assurance that additional financing will be available to us when we need it, or if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain additional
financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be required to scale down or cease our operations.

Going Concern

Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on our audited consolidated financial statements as at and for the years ended December 31, 2006 and 2005, our independent auditors included an
explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. The notes to such financial statements describe the circumstances that lead to this concern by our independent auditors. Our consolidated financial
statements do not include any adjustments that might result from the outcome of this uncertainty.

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Critical Accounting Policies and Estimates

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Our management routinely makes judgments and estimates about the effects of matters that are inherently
uncertain. Actual results could differ from those estimates.

Revenue Recognition

The Company follows the provisions of Staff Accounting Bulletin (SAB) No. 104 Revenue Recognition and Statement of Position (SOP) 97-2, Software Revenue Recognition), as amended for accounting and
recognizing revenue. In accordance with SAB No. 104 and SOP 97-2, the Company recognizes revenue. In accordance with SAB No. 104 and SOP 97-2, the Company recognizes the monthly licensing fees when the amount is due which is when all the criteria
under SOP 97-2 have been met provided that no significant production, modification or customization of the software is required. Also in accordance with SOP 97-2, the Company defers and recognizes initial non-refundable set-up fees on a
straight-line basis over the term of the underlining licensing agreement. If collectibility will not be considered probable, revenue will be recognized when the fee is collected. In an arrangement with multiple deliverables, the Company will
allocate fees to various elements based on vendor-specific objective evidence of fair value as defined in SOP 97-2. Amounts collected or billed prior to satisfying the above revenue recognition criteria are reflected as deferred revenue.

Service revenue will be primarily derived from fees for consulting services related to the Companys mobile gaming software, which are recognized as the services are performed.

Research and Development

Research and development costs are charged to expenses as incurred.

In accordance with SFAS No. 86, development costs incurred in the development of software are capitalized from the time that technological feasibility in the form of a working model has been established through to the general release to the
customer.

The Company follows Emerging Issue Task Force (EITF) No. 00-2, Accounting for Website Development Costs, and capitalized direct internal and external costs associated with the development of the features, content and
functionality of the Company's website incurred during the application development stage. All other costs are expensed including those incurred after the date upon which the website is declared operational, except for

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those costs incurred in respect of significant functionality enhancements. As at September 30, 2007, no website development costs have been capitalized.

Stock-based Compensation

The Company has a stock-based compensation plan, whereby stock options are granted in accordance with the policies of regulatory authorities.

Prior to January 1, 2006, the Company accounted for stock-based awards under the recognition and measurement provisions of Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees
using the intrinsic value method of accounting, under which compensation expense was only recognized if the exercise price of the Companys employee stock options was less than the market price of the underlying common stock on the date of
grant. For the period from inception of its subsidiary to December 31, 2005, the Company had not previously granted any stock options or warrants.

Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123R Share Based Payments, using the modified retrospective transition method. The Company had not issued any stock options or share
based payments prior to the period of adoption, and therefore, the results for prior periods have not been restated.

All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is
more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

New Accounting Pronouncements

In February 2006, FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments  an Amendment of FASB Statements No. 133 and 140.Among other things, SFAS No. 155 permits the election of fair value
re-measurement for certain hybrid financial instruments that would otherwise require bifurcation under Statement 133, Accounting for Derivative Instruments and Hedging Activities. These hybrid financial instruments would include both assets and
liabilities. SFAS No. 155 is effective for fiscal years beginning after September 15, 2006. The Company has determined that SFAS No.155 did not have a material impact on its financial statements.

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 157, Fair Value Measurements (FAS 157). FAS 157 defines fair
value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of FAS 157 are

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effective fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of the provisions of SFAS No. 157.

In June 2006, the Financial Accounting Standards Board (FASB) issued interpretation No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109 (FAS No. 109) (FIN 48).
This interpretation prescribes a recognition threshold and measurement attribute for tax positions taken or expected to be taken in a tax return. This interpretation also provides guidance on de-recognition, classification, interest and penalties,
accounting in interim periods, disclosure and transition. The evaluation of a tax position in accordance with this interpretation is a two-step process. In the first step, recognition, the Company determines whether it is more-likely- than-not that
a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step addresses measurement of a tax position that meets the
more-likely-than-not criteria. The tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Differences between tax positions taken in a tax return and amounts
recognized in the financial statements will generally result in a) an increase in a liability for income taxes payable or a reduction of an income tax refund receivable, b) a reduction in a deferred tax asset or an increase in a deferred tax
liability or c) both (a) and (b). Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously
recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be de- recognized in the first subsequent financial reporting period in which that threshold is no longer met. Use of a valuation allowance as
described in FAS No. 109 is not an appropriate substitute for the de-recognition of a tax position. The requirement to assess the need for a valuation allowance for deferred tax assets based on sufficiency of future taxable income is unchanged by
this interpretation. This Interpretation is effective for fiscal years beginning after December 15, 2006. There were no material effects on the consolidated financial statements as a result of the implementation of this new standard.

In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106, and 132(R). This statement requires
employers to recognize the over funded or under funded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status
in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization. This statement also requires an employer to measure the funded status of a plan as of
the date of its year-end statement of financial position, with limited exceptions. The provisions of SFAS No. 158 are effective for employers with publicly traded equity securities as of the end of the fiscal year ending after December 15, 2006. The
adoption of this statement is not expected to have a material effect on the Company's financial statements.

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In February 2007, the FASB issued SFAS No. 159, The Fair
Value Option for Financial Assets and Financial Liabilities  Including an
Amendment of FASB Statement No. 115. This statement permits entities to
choose to measure many financial instruments and certain other items at fair
value. Most of the provisions of SFAS No. 159 apply only to entities that elect
the fair value option. However, the amendment to SFAS No. 115 Accounting for
Certain Investments in Debt and Equity Securities applies to all entities
with available-for-sale and trading securities. SFAS No. 159 is effective as of
the beginning of an entitys first fiscal year that begins after November 15,
2007. Early adoption is permitted as of the beginning of a fiscal year that
begins on or before November 15, 2007, provided the entity also elects to apply
the provision of SFAS No. 157, Fair Value Measurements. The adoption of
this statement is not expected to have a material effect on the Company's
financial statements.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on our
financial condition, changes in financial condition, revenues, expenses, results
of operations, liquidity, capital expenditures or capital resources that is
material to investors.

|Item 3. | Controls and Procedures
|------- | -----------------------

As required by Rule 13a-15 under the Exchange Act, we have
carried out an evaluation of the effectiveness of the design and operation of
out companys disclosure controls and procedures as of the end of the period
covered by this quarterly report, being September 30, 2007. This evaluation was
carried out under the supervision and with the participation of our companys
management, including our companys principal executive officer and principal
financial officer. Based upon that evaluation, our companys principal executive
officer and principal financial officer concluded that our companys disclosure
controls and procedures are effective as at the end of the period covered by
this quarterly report to ensure that information required to be disclosed by us
in the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified by the
rules and forms of the SEC.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our companys reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported, within time periods specified in the
Securities and Exchange Commissions rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our companys reports filed
under the Exchange Act is accumulated and communicated to management, including
our principal executive officer and principal financial officer, as appropriate,
to allow timely decisions regarding required disclosure.

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There have been no changes in our internal controls over
financial reporting that occurred during our most recent quarter ended September
30, 2007 that have materially affected, or are reasonably likely to materially
affect our internal controls over financial reporting.

PART II  OTHER INFORMATION

|Item 1. | Legal Proceedings
|------- | -----------------

From time to time, the Company may become involved in various
claims and lawsuits incidental to its business.

A lawsuit was filed by Tira Wireless of Toronto, Ontario,
Canada on March 15, 2007. Tira Wireless has claimed it is owed $21,000 by
Ignition Technologies, a subsidiary of MGN Technologies. The lawsuit is
currently pending. We know of no other material, active or pending legal
proceedings against us, nor are we involved as a plaintiff in any material
proceedings or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholders,
are an adverse party or has a material interest adverse to us.

|Item 2. | Unregistered Sales of Equity Securities and
      Use of Proceeds
|------- | -----------------------------------------------------------------

We have reported sales of securities without registration under
the Securities Act of 1933, as amended (the Securities Act) in our Form 10-KSB
for the year ended December 31, 2006 filed with the Securities and Exchange
Commission. In addition to these reported issuances, we completed the issuances
described below during the nine month period ended September 30, 2007:

On May 25, 2007, our company issued 1,000,000 common shares
(500,000 to Mathew Bird and 500,000 to Craighton McFarlane) in connection with
the Software License and Content Agreement dated April 23, 2007 between MGN
Technologies, Inc. and Z7media, Inc. for $35,000. The shares issued were made
pursuant to exemptions from registration provided by Section 4(2) of the
Securities Act and/or Rule 506 of Regulation D promulgated thereunder, and
exemptions available under applicable state securities laws and regulations.
These shares will bear the appropriate restrictive legend.

On July 17, 2007, our company issued 6,000,000 shares to
Abettor Agencies, Inc. in connection with a debt settlement letter to settle a
note payable in the amount of $719,805. The shares issued were made pursuant to
exemptions from registration provided by Section 4(2) of the Securities Act
and/or Rule 506 of Regulation D promulgated thereunder, and exemptions available
under applicable state securities laws and regulations. These shares will bear
the appropriate restrictive legend.

On July 17, 2007, our company issued 423,340 shares to William
Callan, PLLC in connection with a debt settlement letter to settle accounts
payable in the amount of $21,167. The shares issued were made pursuant to
exemptions from registration provided by Section 4(2) of the Securities Act
and/or Rule 506 of Regulation D

---

promulgated thereunder, and exemptions available under
applicable state securities laws and regulations. These shares will bear the
appropriate restrictive legend.

On July 17, 2007, our company issued 2,054,813 shares to DVRC,
Inc. in connection with a debt settlement letter to settle amounts owing
totalling $102,741. The shares issued were made pursuant to exemptions from
registration provided by Section 4(2) of the Securities Act and/or Rule 506 of
Regulation D promulgated thereunder, and exemptions available under applicable
state securities laws and regulations. These shares will bear the appropriate
restrictive legend.

On July 17, 2007, our company issued 8,505,647 to Illuminated
Technologies Inc. in connection with a debt settlement letter to settle amounts
owing totalling $425,282. The shares issued were made pursuant to exemptions
from registration provided by Rule 904 of Regulation S promulgated thereunder,
and exemptions available under applicable state securities laws and regulations.
These shares will bear the appropriate restrictive legend.

On July 17, 2007, our company issued 3,498,800 to Androgas
Property, SA in connection with a debt settlement letter to settle amounts owing
totaling $174,940. The shares issued were made pursuant to exemptions from
registration provided by Rule 904 of Regulation S promulgated thereunder, and
exemptions available under applicable state securities laws and regulations.
These shares will bear the appropriate restrictive legend.

On September 21, 2007, our company issued 2,200,000 to Don
Currie, in connection with stock options exercised. The shares issued were made
pursuant to exemptions from registration provided by Rule 904 of Regulation S
promulgated thereunder, and exemptions available under applicable state
securities laws and regulations. These shares will bear no restrictive legend
pursuant to Form S-8 filed by the Company with the Securities and Exchange
Commission.

On October 10, 2007, our company issued 2,200,000 to Darryl
Cardey in connection with stock options exercised. The shares issued were made
pursuant to exemptions from registration provided by Rule 904 of Regulation S
promulgated thereunder, and exemptions available under applicable state
securities laws and regulations. These shares will bear no restrictive legend
pursuant to Form S-8 filed by the Company with the Securities and Exchange
Commission.

|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

We are currently in default under a loan in the principal
amount of $400,000 from Alliance Capital Ventures, LLC for failing to repay
amounts due upon maturity of the loan on July 31, 2006. The loan is secured by
substantially all of our assets and our former Vice-President of Investor
Relations had pledged 500,000 shares of our common stock as further security for
the loan. Subsequent to this, the pledged shares have been transferred to
Alliance Capital Ventures, LLC as partial payment, and $96,000 has been accrued
in accounts payable and accrued liabilities as an amount owing to our former

---

Vice-President of Investor Relations. In the event that any
amounts remained unpaid more than sixty days from July 31, 2006, as has been the
case, the default interest rate will increase 5% each thirty day period
thereafter until the debt is paid in full. The current rate of interest on this
debt is 80% per month, and the amount outstanding is $56,679,257 as of September
30, 2007. The lender has not as yet taken any action upon the default and we are
currently in discussions with the lender regarding the repayment of amounts due
under the loan. For more information, see Liquidity and Capital Resources.

|Item 4. | Submission of Matters To a Vote of Security
      Holders
|------- | ---------------------------------------------------------

None

|Item 5. | Other Information
|------- | -----------------

None.

|Item 6. | Exhibits
|------- | --------

|Exhibit |                                                                                                                                                                                                                       
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                           
|3.1     | Memorandum dated December 23, 1999 (incorporated by
      reference from our Registration Statement on Form SB-2 filed on August 8,
      2003)                                                                       
|3.2     | Notice of Articles (incorporated by reference from our
      Form 10-KSB filed on April 17, 2006)                                                                                                                     
|3.3     | Notice of Alteration (incorporated by reference from our
      Form 10-KSB filed on April 17, 2006)                                                                                                                   
|3.4     | Notice of Alteration (incorporated by reference from our
      Form 10-KSB filed on April 17, 2006)                                                                                                                   
|3.5     | Articles of Incorporation (incorporated by reference from
      our Form 10- KSB filed on April 17, 2006)                                                                                                             
|4.1     | Specimen ordinary share certificate (incorporated by
      reference from our Registration Statement on Form SB-2 filed on August 8,
      2003)                                                                      
|10.1    | Purchase, Sale and Assumption Agreement dated March 1,
      2004 to acquire Tridents interests in the East Corning Area (incorporated
      by reference from our Current Report on Form 8-K filed on March 8, 2005)
|10.2    | Purchase, Sale and Assumption Agreement dated March 1,
      2004 to acquire Atlas interests in the Triangle T Area (incorporated by
      reference from our Current Report on Form 8-K filed on March 8, 2005)   
|10.3    | Third Amended Property Option Agreement, dated February
      15, 2004                                                                                                                                                

---

|Exhibit |                                                                                                                                                                                                                                                                                                  
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                                                                                      
|        | (incorporated by reference from our
      Registration Statement on Form SB-2/A filed on July
      12, 2004)                                                                                                                                                                                    
|10.4    | Intellectual Property Development and
      Transfer Agreement dated January10, 2005, between
      Ignition Technologies, Inc., dba MobileGamingNow,Inc.
      and Illuminated Technologies, Inc. (incorporated by reference fromour Current Report on Form 8-K filed on October 31,
      2005)
|10.5    | Consulting Agreement dated April 1, 2005,
      between IgnitionTechnologies, Inc. dba Mobile Gaming
      Now, Inc. and D.C. Goldman &Associates
      (incorporated by reference from our Current Report on Form 8-K filed on October 31, 2005)                                                
|10.6    | Software License Agreement dated August 10,
      2005, between Fortuna UKand MobileGamingNow, Inc.
      (incorporated by reference from our CurrentReport on
      Form 8-K filed on October 31, 2005)                                                                                         
|10.7    | Consulting Agreement dated April 1, 2005,
      between IgnitionTechnologies, Inc. dba Mobile Gaming
      Now, Inc. and DVRC, Inc.(incorporated by reference
      from our Current Report on Form 8-K filed onOctober
      31, 2005)                                                          
|10.8    | Consulting/Development Agreement dated May
      1, 2005, between IgnitionTechnologies, Inc. dba
      Mobile Gaming Now, Inc. and IlluminatedTechnologies,
      Inc. (incorporated by reference from our Current Report onForm 8-K filed on October 31, 2005)                                  
|10.9    | Consulting Agreement dated June 1, 2005,
      between IgnitionTechnologies, Inc. dba Mobile Gaming
      Now, Inc. and Adam Morand(incorporated by reference
      from our Current Report on Form 8-K filed onOctober
      31, 2005)                                                          
|10.10   | Consulting Agreement dated June 1, 2005,
      between IgnitionTechnologies, Inc. dba Mobile Gaming
      Now, Inc. and Don Currie(incorporated by reference
      from our Current Report on Form 8-K filed onOctober
      31, 2005)                                                           
|10.11   | Kahnawake Gaming Commission Temporary Client
      ProviderAuthorization (incorporated by reference from
      our Current Report onForm 8-K filed on October 31,
      2005)                                                                                                                    
|10.12   | Credit Facility Agreement dated October 21,
      2005, between TryxVentures Corp. and Androgas
      Property S.A. (incorporated by referencefrom our
      Current Report on Form 8-K filed on October 31, 2005)                                                                               
|10.13   | General Security Agreement dated October 21,
      2005, between Tryx                                                                                                                                                                                                                            

---

|Exhibit |                                                                                                                                                                                                                   
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                       
|        | Ventures Corp. and Androgas Property S.A. (incorporated
      by reference from our Current Report on Form 8-K filed on October 31,
      2005)                                                                   
|10.14   | Unwind Agreement dated October 21, 2005, between Tryx
      Ventures Corp. and Trident Oil & Gas, Inc. (incorporated by reference
      from our Current Report on Form 8-K filed on October 31, 2005)            
|10.15   | Unwind Agreement dated October 21, 2005, between Tryx
      Ventures Corp. and Atlas Energy Corp. (incorporated by reference from our
      Current Report on Form 8-K filed on October 31, 2005)                 
|10.16   | 2006 Stock Option Plan (incorporated by reference from
      our Form 10- KSB filed on April 17, 2006)                                                                                                            
|10.17   | Consulting Agreement dated December 22, 2005, between MGN
      Technologies Inc. and Southgate SEO, LLC. (incorporated by reference from
      our Current Report on Form 8-K filed on February 22, 2006)        
|10.18   | Marketing Agreement dated December 22, 2005, between MGN
      Technologies Inc. and Ownby Mobile Consulting, LLC (incorporated by
      reference from our Current Report on Form 8-K filed on February 22, 2006)
|10.19   | Investor Relations Agreement dated December 21, 2005,
      between MGN Technologies Inc. and Lyons LLC (incorporated by reference
      from our Current Report on Form 8-K filed on February 22, 2006)          
|10.20   | Consulting Agreement dated January 8, 2006, between MGN
      Technologies Inc. and ECON Investor Relations (incorporated by reference
      from our Current Report on Form 8-K filed on March 15, 2006)         
|10.21   | Consulting Agreement dated January 5, 2006, between MGN
      Technologies Inc. and Atlanta Capital Partners, LLC. (incorporated by
      reference from our Current Report on Form 8-K filed on March 15, 2006)  
|10.22   | Agreement dated January 3, 2006, between MGN Technologies
      Inc. and The Money Channel, Inc. (incorporated by reference from our
      Current Report on Form 8-K filed on March 15, 2006)                    
|10.23   | Investor Relations Agreement dated January 6, 2006,
      between MGN Technologies Inc. and First London Finance Ltd (incorporated
      by reference from our Current Report on Form 8-K filed on March 15, 2006)
|10.24   | Loan Agreement dated March 27, 2006 between MGN
      Technologies Inc. and Alliance Capital Ventures, LLC (incorporated by
      reference from our Quarterly Report on Form 10-QSB filed on May 22, 2006)       

---

|Exhibit |                                                                                                                                                                                                                                                
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                                    
|10.25   | First Amendment
        to Loan Agreement dated June 30, 2006 between MGN Technologies, Inc. and
        Alliance Capital Ventures, LLC (incorporated by reference from our Quarterly
        Report on Form 10-QSB filed on August 21, 2006)  
|10.26   | Loan Agreement dated April 27,
        2006 between MGN Technologies, Inc. and Abettor Agencies, Ltd. (incorporated
        by reference from our Quarterly Report on Form 10-QSB filed on August
        21, 2006)                            
|10.27   | Amendment to
        Credit Facility Agreement dated August 31, 2006, between Tryx Ventures
        Corp. and Androgas Property S.A. (incorporated by reference from our Quarterly
        Report on Form 10-QSB filed on November 20, 2006)   
|10.28   | Software License and Content
        Agreement dated April 23, 2007 between MGN Technologies, Inc. and Z7media,
        Inc.(1)                                                                                                                
|10.29   | 2007 Stock Option
        Plan (incorporated by reference from our Form 8-K as filed on June 18,
        2007)                                                                                                                                 
|10.30   | Form of Stock Option Agreement
        (incorporated by reference from our Form 8-K as filed on June 18, 2007)                                                                                                                                 
|10.31   | Form of Debt
        Settlement Agreement (incorporated by reference from our Form 8-K as filed
        on July 20, 2007)                                                                                                                      
|31.1    | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant to Rule
        13a-14(a) of the Exchange Act (1)                                                                                                        
|32.1    | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant to Rule
        13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant
        to Section 906 of the Sarbanes-Oxley Act of 2002(1)

|(1) | FILED AS AN EXHIBIT TO THIS ANNUAL REPORT ON
      FORM 10-KSB.
|--- | ---------------------------------------------------------------

---

SIGNATURES

In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto authorized.

MGN TECHNOLOGIES INC.

|By: | /s/ Mark jensen              | 
|--- | ---------------------------- | 
|    | Mark Jensen, President,      | 
|    | Chief Executive Officer and  | 
|    | Principal Accounting Officer | 

November 19, 2007

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